| Since the 1980s,institutional investors have risen in international financial markets.The investment in international financial markets has gradually changed from individual investors to institutional investors.Since then,in Europe and other developed countries,institutional investors enjoyed rapidly growing.There is no doubt that institutional investors are changing the structure and behavior of financial markets.In China,institutional investors have also been leaps and bounds.Nowadays,China has become the world’s second largest economy,and the role of the securities market has been more important.Correspondingly,the study of institutional investors is also mushrooming.One of the most important research areas is to study the volatility influenced by institutional investors.Almost every type of institutional investors has been researched on their influence to the share market in last few years.However,there is one kind of the institutional invertios has never been studied before,that is the institutions which are held and approved by the garvement.The CSF,which is short for China securities finance corporation limited,is one of the representatives.They played such an important role in the stock market crash that no other companies can instead.Therefore,the purpose of this study is to explore the relationship between this kind of institutional investors and stock volatility.In this paper,we try to use event study method and multiple linear regression method to solve the problem listed above.The empirical study shows that this type of institutional investors did play a positive role during the stock crisis,and from the long term,not only will not increase the irrational fluctuations in stock prices,but also promote the company’s share price return to its real price.This is related to CSF’s rational choice of investment portfolio,focusing on long-term benefits rather than short-term gains.However,we need notice that,CSF also choiced some poor performance companies in order to save the crash stock market.And this will finally harm these companies’ stock price cause they will fall into irrational fluctuations.Such as a much higer price when stock market growing up and lower when it going down.Finally,this paper recommends:1.To stabilize the stock market,the CSF should not sell the stock too fast;2.Even in the time to resure the stock market,the CSF shouldn’t choice its portfolio without thinking about target company’s performance.3.Our gorverment should adjust the market investor structure,to further increase the proportion of institutional investors,and make stock market more effective. |
