The Study On Analysts’ Earnings Forecasts And Independence

In the1990s, Stock Analysts and Banker are the capital market’s blue-eyedboys,what they said and did have a direct impact on stock price. In recent years, asChina’s capital market gradually into mature, the value investment become themainstream of the investment of investors, securities analysts are also under the wideattention of market participants,who have apparently be the capital strength ofdiscovering value and guiding the flow of capital. Securities analysts are gatheringand evaluating the company information, which including public information andprivate information, in order to deeply analyze company’s development prospects,forecast the level of accounting earnings, and based on this, make their decisions totrade, increase or reduce stocks.These analysts spread out information and ideas,especially their surplus prediction has become one of the most important reference tomajority investors.Therefore, analysts’ company earnings forecast become investorsand other professionals’ universal concern, and also the focus of academiccircles.However, in recent years, with the development of the industry of securitiesanalysts, securities analysts are placed in a variety of interests, for example, what’sthe earnings forecast securities analysts will release for their largest benefits, in orderto maintain and enhance the personal reputation; If analysts at brokeragesunderwriting a certain shares, what earning forest the analysts make for the listedcompany.As China is a typical relational society, whether analysts can give an independentand objective studies in the complicated interest relations,will be an importantsymbol to judge analysts industry is mature and health or not, and also the focus ofthis paper. This paper comprehensively analyzed a variety of interests relations whichthe securities analysts faced influence the quality of its published research report byusing analysts benefit maximization model, and collected2044securities analysts’209532earnings forecast and stock rating from2007to2010. As the sample to studythe research hypothesis empirically, multiple regression results show that securitiesanalysts tend to release partial optimistic surplus prediction and stock rating,in orderto maintain institutional investors who have higher shareholding ratios, as well as therelationship between the internal investment banking business department; A higherreputation analysts (for example the new fortune "best analysts) also cannot maintain its research objectivity in an interests vortex, although they are cautiously optimisticabout their surplus predict to maintain the market competitiveness of its reputation,in order to maintain friendly relations with institutional investors, compared withordinary analysts they tend to release partial optimistic stock rating. These resultsreveal that the securities analysts in our country seriously lack of independence andobjectivity. Surplus prediction is one of the important reference basis for investorsto understand the companies’ future operating situation, Market participants needsuch an important channel of information reliability. This paper provides an importanttheoretical basis and empirical basis for the supervision department to standardize anddevelop securities analysts industry.