Performance Evaluation of Analyst Recommendations in Chinese Stock Market

Using the samples from every Monday‘s column ‘the Most Promising Stocks Recommended by Analysts This Week‘ on Shanghai Securities News during the period from Sep.2000 to Dec.2003, this paper analyzes the performance of the stocks recommended by analysts during the following week. Firstly, the analysts are inclined to recommend the stocks with better performance in the latest week. Secondly, the portfolios formed by the analyst recommendations have remarkably positive abnormal returns on Monday, while they do not outperform the market from Tuesday to Friday, even have remarkably negative abnormal returns.