Institutional Investors And Stock Prices

Although China's securities market started late,its development speed is very rapid.Compared with foreign capital markets,China's stock market is still not mature,and the skyrocketing and speculative behaviors have occurred.In order to make the market fully play its self-regulating function,reduce government intervention,and vigorously develop institutional investors is its inevitable choice.As an indispensable participant in the capital market,“institutionalization” has become a prominent feature in the stock market in recent years.The academic community has also focused more on institutional investors.Many experts and scholars have begun to focus on research on the impact of their trading behavior on stock prices.The empirical research part of this paper selects the stock data of Shanghai and Shenzhen A shares in 2011-2017 from the Billboard Stocks List as a sample,because only the Billboard Stocks List contains daily trading data of institutional investors,and builds indicators to measure the trading behavior of institutional investors.In the past,the indirect measure of institutional investors' shareholding ratio used by scholars.The combination of event research method and multiple linear regression is used to study the relationship between institutional investors and stock prices.In order to make the research more in-depth,this paper divides the stock price into two parts: stock price volatility and stock return,and explores in turn.Firstly,this paper sorts out the existing domestic and foreign literatures,and summarizes the relationship between institutional investors and stock price volatility and stock returns.Secondly,it uses the relevant results of traditional finance and behavioral finance to provide theoretical support for empirical research.In addition,the regression model is constructed to conduct empirical research on institutional investors and stock price volatility and stock returns.On this basis,the paper also selects two typical listed events and stocks by dividing the bull and bear market.The relationship between the institutional investors and stock returns is studied.Through empirical analysis,the results of this paper show that institutional investors' net buying has a positive impact on stock price volatility.This shows that the trading behavior of institutional investors in China has aggravated the volatility of the stock market to a certain extent,and it is even unable to achieve the effect of stabilizing the market.This is contrary to the vision of regulators to develop institutional investors to stabilize the stock market.The institutional investor's buying ratio is positively correlated with the stock return.The selling ratio is negatively correlated with the stock return.When the institutional investor makes more buying transactions,the stock will continue to show excess positive income in the later stage;The more the sale transaction is made,the opposite is that institutional investors have good predictive power.According to the conclusions of this paper,for individual investors,their ability to master market information is insufficient,and they cannot interpret and analyze market conditions well.However,they can observe and refer to the trading behavior of institutional investors to make their own investment decisions.