| There are many serious problem which go against efficient allocation of resource and the stabilization of market such as sharp fluctuations and serious speculation in our stock market. At the beginning of the establishment of stock market, it is considered as the dominant factor lead to sharp fluctuations in stock market that the investor of our stock market is mainly of individual investor whose trading is not rational enough. So our regulator put forward a policy decision aimed at striving to develop institutional investor in2001, as institutional investor is considered to be rational investor who could promote the stabilization of market. Twelve years later of today, whether in quantity or in scale institutional investor have get a great development. However, if the stock market is more stability with the development of institutional investor? When more and more negative information about were burst such as "Fund Shady"," Rat Trading", people begin to doubt if it is sure that institutional investor could bring stabilization to stock market. If no which factor cause institutional investor loss the function. If it is sure, then how to maintain the function. The purpose of this paper is to solve those questions.This paper adopt following step to analyze those question:Firstly, based on the research of previous articles in those problems, the paper analyze the basic characteristics about institutional investor on the whole. From the basic characteristics institutional investor is different with individual investor in funds scale, management ability, ability of information acquisition, market power and some others. And on the investment behavior, comparing with individual investor there are some difference with institutional investor too, for example institutional investor present cautious investment motives, portfolio investment strategy, high price stock preference, and liquidity preference. Because of those difference, institutional investor bring different impaction to market who play two role in the affection of market stability both promoting and restraining.Secondly, have a classification analysis about institutional investor on investment strategy, economic effect to stock market. And put forward research assumes.to each class institutional investor based on the classification analysis. From theoretical analysis assumes that:Closed-end funds is the lack of effective supervision, serious speculative atmosphere make their investment behavior exacerbate market volatility; Open-end fund to promote stability, but may not significant because of short-sighted behavior of fund managers; Social Security Fund is assumed that it is conducive to the stability of the market, as its consider for the safety of funds, but it may not significant due to the amount of investment fund in the stock market is restricted; Insurance companies, his investment funds, like the Social Security fund, is equivalent to a deferred payments, he is also risk averse, although profit-driven stronger than the Social Security Fund, but the prudent investment properties allowed him appear to promote market stability; Securities companies manipulate the market in the past, which not only failed to make a profit, but many are hollowed, then securities companies changing investment philosophy, the current situation has change to sunshine investment, therefore assumed him to promote market stability; Trust Company investment across the industry, currency and stock market, diversification investment and decentralized strategy is favor to configuration of resources in multiple markets, coupled with its role as a bridge to play three market, so assume that trust companies promote market stability; QFII has advanced investment philosophy and his investment strategy focuses on the analysis of the company’s fundamentals and long-term investment, thus assumed favor to stable market, but the QFII investment is limited by the amount of investment, a small proportion of the A-share market, so its affect maybe not significant.Thirdly, establish empirical model analysis the different impact of various types of institutional investors to the market, and compare with the study assumes, explaining in addition. Stata10for15quarterly panel data regression testing, the results of the model output:The proportion of closed-end fund and social security fund positions are positively correlated with stock volatility and significant conclusion; QFII’s holding owned also positively correlated with the fluctuations in stock prices, but the conclusion is not significant; The stake of the open-end funds, insurance companies, securities companies, trust companies is negatively correlated with stock volatility and significant conclusions. That means: Closed-end funds and social security funds are the culprit who exacerbate volatility in securities markets; The QFII investment also adversely affect the stability of the securities market, but the conclusions are not significant; While open-end funds, insurance companies, securities companies, trust companies, has a promoting role in securities market stability. The regression results of social security fund and QFII contrary to the previous theoretical analysis. The article attempts to bear a reasonable explanation though statistical analysis of the collected data and the analysis from China’s specific national conditions. The data show that the social security fund and QFII investment not have medium-and long-term nature of the investment. Departure from China’s specific national conditions, this paper points out that China’s social security fund does not have independence, which investment subject to the local administrative intervention and serve the administrative performance of local officials, often be used for investment in public utilities, infrastructure investment, and even be used to invest in real estate of their jurisdictions in order to enhance estate prices. Thus making China’s social security fund lost stabilize the market turn into exacerbate market volatility. QFII, cannot fully grasp the conditions of our country, disadvantage in the acquisition and processing of information makes its investment strategy mistakes. And another side in our securities market the quality of listed companies generally worrying, everywhere filled with speculative atmosphere, QFII speculate the market too, and its speculative strategy any better, more private, less likely to be aware, the final result of market manipulation, showed significant fluctuations in share price, and disrupt the stability of the stock market.Finally, according to the conclusions, the paper proposes policy recommendations. First of all, due to the different categories of institutional investors and different influence to market stability, regulators should be classified management according to the different characteristics of the various types of institutional investors. Secondly, it should be from another aspect, grabbed from the source of risk reducing the impact of the factors that is not conducive to the stable development of the securities market. That should grasp the quality of listed companies, and to create a favorable investment environment for our investors. |
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