Analysis Of Analyst Forecast Consistency In China

As the Chinese stock market is growing mature, more and more investors focus on the fundamental analysis when making investing decisions. So, nowadays there is a large demand for financial analysts’earning forecasts, and the stock market relies greatly on the analysts’reports.Currently the analysts’related researches in China market commonly use forecast accuracy to asset analysts’performance and show that more accurate analysts have better career outcomes.In this paper we argue that the usefulness of analysts’forecasts should not only be based on forecasts’stated accuracy, but rather on forecasts’informativeness. In particular, should be based on the volatility of forecast error, as consistency in the paper.In paper we show empirically that in China stock market the analysts who show more consistency in forecast have greater ability to affect price and this effect is larger than that of accuracy. We thus lead to three implications:1) Analysts with more consistency tend to be nominated as all-star analysts.2) Analysts tend to make downward biased earning forecast to increase their consistency.3) The benefits of consistency are increasing in institutional investors.