The Impact Of Leading Securities' Negative Reports On Listed Companies' Stock Prices

A-shares is a typical "bullish" market.There are so few negative research reports in A-shares caused by some reasons,on the one hand,yet the short selling mechanism in China's capital market is relatively backward,the lack of the short results the market cannot adjust the price in time when negative information appears,on the other hand,due to the conflict of interest,the seller's analysts often keep silent instead of issuing negative reports.Even if the securities company issued a negative report,its content is often full of beautiful words,and its effectiveness doubts me.Therefore,this article takes the analyst's negative report as the entry point,and conducts an empirical analysis of the changes in the cumulative return on the stock price between before and after the release of the negative report issued between 2013 and the first quarter of 2019.The information of the research report is respectively represented by the effective information value constructed by the text mining and analysis and the rating of the research report.The report information,the size of listed companies,the reputation of the analyst,and the reputation of the brokerage firm are used for the study on the relationship between the cumulative return change between before and after the research report releases.The empirical conclusions are as follows:(1)the negative impact of negative reports on stocks is not significant,due to the insufficient information quality of the research report itself,the stock price has reflected the negative information during the time between the occurrence of the event and the release of the research report,and the weakening impact of government policies on negative effects between negative report and stock price according to this article;(2)Investors pay more attention to analyst reputation in the short term,but the higher the analyst reputation,the more likely they are to be affected by conflicts of interest,and in the long term investors pay more attention to the reputation of securities;(3)From the perspective of company size,market needs more time to absorb the negative information of the larger corporates,and in the long-term after the report is released,there is a significant negative correlation between cumulative returns and corporate size,indicating that larger companies can be affected more significantly by negative information shocks.Finally,the related policy recommendations are as follows:(1)The construction of analyst teams should be strengthened,in order to improve the research capabilities of analysts and the information quality of research reports.In the meantime,it is necessary to enhance the management level and governance capabilities of securities dealers,and build a mechanism to prevent conflicts of interest so that analysts can provide an objective and impartial view for the market;(2)China's capital market system should be strengthened.Speeding up the construction of China's short-selling mechanism so that promote the market to rationally accept negative information.Strengthening investor education to guide the market to develop rationally.(3)Large companies should strengthen their corporate governance.At the same time,it is necessary to complete the information disclosure system to enhance market transparency so that information can be more effectively transmitted in the market.