Do the Securities Analysts Play the Role of Information Competition or Information Supplement? Empirical Analysis Based on Investor Sentiment (ID: SO-20-2446.R3)

The purpose of this article is to investigate the role of securities analysts in Chinese stock market. Taking the earnings announcements of listed companies, analysts’ earnings forecast and analysts’ recommendations in Chinese stock markets from 2014 to 2018 as the samples, this paper explores the influence mechanism of investor sentiment on the market reaction to announcements, and investigates the influence mechanism of investor sentiment on the role of securities analysts under the framework of behavioral finance theory. On the basis of theoretical analysis, this paper empirically tests the relationship between the information content of analysts’ reports and the information content of the earnings announcements from the perspective of behavioral finance, and discusses the role of securities analysts in the stock market. The results show that during the periods of high investor sentiment, securities analysts do not demonstrate the role of information competition or information supplement. On the other hand, during the periods of low investor sentiment, securities analysts play the role of information competition or information supplement. Furthermore, after excluding the investor sentiment component of the market reaction to announcements, securities analysts do not demonstrate the role of information competition, but play the role of information supplement. The findings of this study offer new insights into the role securities analysts play in Chinese stock market, which is conducive to improving the quality of analysts’ reports, thus enhancing the efficiency of the securities market.

Stock Market Liberalization and Corporate Green Innovation: Evidence from China

Corporate green innovation is an effective way to achieve energy conservation and emission reduction. Enterprises’ willingness to pursue green innovation is increasingly affected by external factors. By using a quasi-natural experiment of China’s Stock Connect program, we investigate the impact of stock market liberalization on corporate green innovation. We find that stock market liberalization increases enterprises’ green innovation, especially for state-owned enterprises. We also find that stock market liberalization plays a stronger role in promoting the green invention patents of enterprises whose managers have overseas experience and enterprises in areas with a higher degree of openness. Our mechanism analysis suggests that stock market liberalization attracts the attention of securities analysts and increases managers’ focus on environmental protection, thereby promoting corporate green innovation. Our findings show that stock market liberalization plays an important role in the governance of firms’ non-financial behavior, which has important theoretical and practical implications.

Incorporating textual network improves Chinese stock market analysis

This study adopts the textual network to describe the coordination among the interplay of words, where nodes represent words and nodes are connected if the corresponding words have co-occurrence pattern across documents. To study stock movements, we further proposed the sparse laplacian shrinkage logistic model (SLS_L) which can properly take into account the network connectivity structure. By using this approach, we investigated the relationship between Shenwan index and analysts' research reports. The securities analysts’ research reports are crawled by a famous financial website in China: EastMoney, and are then parsed into time-series textual data. The empirical results show that the proposed SLS_L model outperforms alternatives including Lasso-Logistics (L_L) and MCP-Logistic (MCP_L) models by having better prediction performance. Besides, we search published literature and find the identified keywords with more lucid interpretations. Our study unveils some interesting findings that the efficient use of textual network is important to improve the predictive power as well as the semantic interpretability in stock market analysis.

Asymmetric Information: Tinjauan Berdasarkan Rekomendasi Analis Sekuritas dan Revisi Earning Forecast

Trading in the stock market occur due to differences in opinion on the expected value of the securities. In the other side, asymmetric information between investors and companies caused the stock price does not reflect the real price. So, asymmetric information should be reduced. Information by securities analysts is an information that is expected to reduce that. This study investigates the performance of securities analysts through its role in reducing asymmetric information. This is motivated by some previous studies that stated that the Indonesian capital market is inefficient, because high levels of asymmetric information. Analysts is considered as inform market participant who can reduce the asymmetric information so as to make capital market to be efficient. The role of securities analysts is seen through the product. There are stock recommendation and earnings forecast revision. Testing the consistency of the analyst's stock recommendations and earnings forecast revision before testing their impact on asymmetric information. The results showed that output in the form of stock securities analysts and earnings forecast recommendation are consistent but has not been able to reduce the asymmetry of information that occurs between investors and companies.

Form the Optimal Investment Portfolio Applied Study in the Jordanian Banking Sector (2013-2017)

The study aimed to form the optimal investment portfolio in the Jordanian banking sector. The research covered a period (2013-2017) and the sample of the study was selected from its community of Jordanian banks listed on the Amman Stock Exchange, consisting of (15) working banks for which the necessary data are available to study. The importance of the research lies in the formation of a thought and methodology that can be applied and utilized by investors and securities analysts in the management of their investment portfolio. The study shows that the effective rate of return is higher than the required rate of return in the Jordanian commercial banks. This indicates that the commercial banks have succeeded in their estimates of the required or actual rate of return for the optimal investment portfolio banks. the correlation matrix between returns on each bank in the investment portfolio is mostly low, which confirms that the investment portfolio of Jordanian banks is efficient, as Markowitz stressed on his focus on the correlation coefficient between returns and its impact on the return and risk of the optimal investment portfolio that achieve the highest return at a certain level of risk.