The Impact of Underwriting Business on Analysts’ Forecasts

• Main Authors: Yun-jui Huang, 黃韻睿
• Other Authors: Huei-ling Chen
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/68041243270179142121

碩士 === 國立中央大學 === 財務金融研究所 === 97 === This study aims to examine whether underwriting business in China would have influence on analysts’ earning forecasts before their investment banks win the underwriting mandate. This study also examines whether analysts may strategically issue optimistic biased forecasts before a company decides the underwriters before 60 days. Furthermore, we examine whether different investors could understand analysts’ biased forecasts and make adjustments in the optimistic earning forecasts. The empirical results reveal that there is no significant evidence to prove that affiliated analysts would issue more accurate earning forecasts than unaffiliated analysts before the company decides the underwriter. However, we find that affiliated analysts seem not to issue optimistic-biased forecasts strategically 60 days and 90 days prior to the date of deciding underwriter. In addition, optimistic-biased forecasts have larger impact on those stocks with higher institutional investors holding than those with lower institutional investors holding.