Empirical Study On The Relevance Between Corporate Performance Of Listed Banks And The Stock Price

In the past few years, profit of listed banks was growing, while stock price had a downward trend. So someone began to doubt stock price deviating the performance of listed banks. The main purpose of this paper is to study the relationship between performance of listed banks and stock price, and indirectly reflect the effectiveness of China’s capital market.Based on this, we choose listed banks on shanghai and shenzhen stock as the sample, choosing data of three years(2011-2013) to conduct empirical research. Firstly, we select twelve indexes from four inspects of profitability 、 safety 、 liquidity and growth to establish performance evaluation system. Then, we extract four performance dimensions from the 12 performance indicators and compute the comprehensive performance score of listed banks( F value) by using the method of factor analysis. Further, we analyze the correlation between comprehensive performance of the listed banks、the dimensions of the performance and the stock price. Lastly, we construct two multiple linear regression models to analyze in depth above correlation. Through the empirical research, we draw the following conclusions: firstly, correlation between the comprehensive performance、growth factor 、safety factor and stock price of listed banks is significant positive. Secondly, correlation between earnings factor and the stock price is unusual, which is negative and do not pass the significance test. Thirdly,flow factor does not have asignificant impact on the stock price.After the empirical analysis, we put forward some management implication: try to increase sales and obtain initiative of stock price’s volatility. Specifically, try to improve the ability of growth and profit; try to induce non-performing loans and improve the safety level; try to maintain the liquidity in a reasonable range. The correlation between performance of listed banks and the stock price is weak, and the stock price can not effectively reflect the performance information. In view of this present situation, we analyze the cause and countermeasure from the following possible aspects: the capital market、factors affecting the stock price 、 investors’ confidence 、 the indexes system and information disclosure. We expect to be able to improve the correlation between the performance of listed banks and the stock price, enhancing the effectiveness of capital market.