Studies On The Influencing Factors Of Listed Bank Valuations In A-share Market

As the weight plates the listed banka in China A-share market is playing an important role in stabilising financial market and allocating resource.With the liberalisation of policy and development of market,more and more joint-stock commercial banks,city commercial banks and rural commercial banks are stepping into the capital market following all the state-owned commercial banks.It is becoming important now for researchers to do valuable studies based on the current China stock market and provide references to selecting an appropriate valuation model for various banks,which are seeking for IPO in the near future.Price-Earnings Ratio(also known as P/E Ratio)reflecting a company's profit earning status,investment risk level and earning growth capability is widely adopted by foreign researchers in studying valuation of listed banks theoretically and empirically.However,it is still at a very early stage in China to adopt P/E Ratio as a valuation methodology in studying listed banks given the fact that there were limited numbers and types of banks in the market earlier.Among the existing P/E Ratio studies in China,most of them are based on the data from state-owned and joint-stock commercial banks while there is also a demanding for the city commercial banks and rural commercial banks.According to the previous studies,the thesis here is to theoretically analyse the influencing factors of P/E Ratio and empirically analyse their relationships especially among various types of listed banks.The regression model in this thesis is based on 13 years data of 25 listed banks.The analysis result shows that the core capital adequacy ratio and the GDP index are significantly and positively correlated with listed banks' P/E Ratio while return on assets ratio is negatively correlated.The non-interest income ratio,the problem loan ratio,the SML migration rate and the total assets demonstrate a significant lag effect on the P/E Ratio.It also shows that the influencing factors have different performances among various types of banks.Return on assets ratio has the most negative influence on P/E Ratio among the city and rural commercial banks;Core capital adequacy ratio and total assets are only significant among city and rural commercial banks while provision coverage ratio are significant among joint-stock commercial banks and GDP among state-owned and joint-stock commercial banks.