Market Effect Of Stock Name Change:A Perspective Based On Investor Emotion

In recent years,there have been frequent changes in the name of stocks in A-share market.Before the change of the company's stock name,the reasons have been notified and adopted at the shareholders' meeting.Before the announcement of the change of the company's stock name is issued,all the information has been conveyed to investors.The announcement is only the final confirmation of this.According to the traditional financial theory,the market will not react to this typical "non-event",but through the study of the effect of stock renaming,it is found that the stock market overreacts to the event of stock name change,and these reactions cannot be explained by the traditional financial theory.So this paper is based on the perspective of behavioral finance and takes investor sentiment as the starting point to explain this reaction.This paper takes the "non-event" of pure stock name change without any substantial change from January 1,2015 to December 30,2017 as the sample,combines the event study method with the tendency score matching method,matches the renamed enterprise with the unrenamed enterprise by the tendency score matching method,and then calculates the unrenamed enterprise with the matched unrenamed enterprise by the market adjustment model.The cumulative excess return rate of an enterprise is studied empirically by establishing a model.The study finds that the change of stock names of listed companies produces significant positive cumulative excess returns,and in the short term,investor sentiment has a great impact on the market effect of the change of stock names.The higher the investor sentiment,the higher the cumulative excess returns during the corresponding window period;on the contrary,the lower the excess return.Based on the sub-sample study from the perspective of enterprises,it is found that the market effect of stock name change varies with the size of enterprises and the industry in which they are located.That is to say,the market effect of stock name change is more significant for small-scale enterprises and popular industries.Finally,based on the investor's own point of view,we find that the proportion of institutional ownership will weaken the influence of investor sentiment on the renaming effect.The larger the proportion of institutional ownership,the less significant the influence of investor sentiment on the market effect of the change of stock names.Finally,according to the conclusions,this paper puts forward suggestions to the regulatory authorities and investors,and puts forward the prospects for future study.