Research On The Influence On The Future Earnings Response Coefficient From Institutional Investors And Analysts

In the capital markets,the efficiency of resource allocation largely response tothe ability of market pricing,that is,whether capital market have efficient pricediscovery mechanism.The efficient price discovery mechanism depends upon theexistence of well-developed information intermediaries and the relatively matureinvestor class.Institutional investors have the distinct advantage in terms of scale,information and knowledge,is the market average investors"weathervane".The profitforecast information and investment advice released by securities analyst are ordinaryinvestors’ the most important information source.However,some discontented andalarming problems revealed from the development of institutional investors andsecurities analysts,caused great controversy among the people,and they are alsoquestioned whether institutional investors and securities analysts to guide ordinaryinvestors for investment.This paper from the perspective of information transmission,analysis the impactof institutional investors and securities analysts on market pricing efficiency by usingfuture earnings response coefficients.The Results show that,Institutional investors andsecurities analysts can more accurately grasp the company’s future earnings capacity,and transmitted the information of effecting intrinsic value of stocks tomarket,causing the share price reaction,significantly improve the future earningsresponse coefficient,by having obvious advantages of information collecting andinformation processing as well as professional analysts.This paper test the efficiency of China’s capital market pricing by the futureearnings response coefficient, and focus on analysis the effect of institutionalinvestors and securities analysts on market pricing efficiency. This helps ordinaryinvestors have further understanding of the behavior of instituti onal investors andsecurities analysts, for the relevant regulatory authorities to regulate and guide theinvestment behavior of China’s capital market,and enhance the capital marketsefficiency have some reference value.