Research On The Influence Of Insurance Institutional Investors' Shareholdings On The Stock Price Of Listed Companies

In recent years,the balance of available investment funds of insurance institutions in China has continued to increase,reaching 14.9 trillion yuan by the end of 2017.As the regulatory authorities gradually relax the investment environment of insurance institutions,more and more insurance funds are stationed in the secondary market to participate in stock investment.This has had a major impact on the stock price of listed companies.From a macro perspective,China's A-share market has many retail investors,and the stock exchange turnover rate is high.The market's speculative sentiment is strong.The investment of insurance institutions will cause other investors' "short-sight behavior" and "herd effect",which will lead to significant fluctuations in the stock prices of related listed companies.From the micro level,since 2015,the insurance capital has become a hot spot in the market,and the stock price of the target company has undergone major changes.For example,from November 17 to28,2016,Qianhai Life Insurance purchased Gree Electric Appliances on a large scale.The Gree Electric's share price rose by a total of 27% before and after,and the turnover rate reached 32%.As an important institutional investor,insurance companies have the responsibility to provide support for the long-term healthy and stable development of the stock market and the bond market.Therefore,this paper takes insurance institutional investors as the research object,based on the previous academic research,combining theory with empirical evidence,in order to explore its specific impact on the share price of listed companies.The theoretical part starts with the characteristics and types of insurance institutional investors,explores the theoretical foundation by which the shareholding of insurance institutions can influence the stock price.In the empirical research,it uses Pearson and Spearman methods to test the correlation between earnings per share,return on net assets and stock price.In order to eliminate endogenous effects between variables,the paper adopts the method of propensity score matching.The sample period is from January 2014 to June 2018.In the correlation test and propensity score matching stage,3136 and 3360 CSI A-share listed companies with no data missing are respectively selected as initial samples(excluding oil,ST and ST* type and financial listed companies).The two-category study initially finds that the monthly turnover rate and volatility of listed companies held by insurance institutions were significantly lower than other listed companies.The holdings of insurance institutions does not bring significant fluctuations to the stock prices of listed companies,and evendecrease the stock trading frequency and volume,and weakens the volatility of the stock price.Further research through three classifications finds that the short-term holdings of insurance institutions increase the share price,but they will not significantly reduce the volatility of stock prices,while long-term holdings will help the market to develop “effectively”,which can greatly reduce the trading frequency and stock price fluctuations.The study also finds that after the initial improvement of the governance structure of listed companies with long-term shareholdings,the continued holding of insurance institutions will not continue to improve the company's performance,but make the operating performance and stock prices of these listed companies gradually return to the normal level of the market,indicating that insurance institutions are rational investors,so we should give full play to the role of long-term funds to help China's stock market to develop steadily and healthily.