Market Reaction and Investors’ Behaviour to Earnings Announcement: Evidence from Indonesia Stock Exchange

2013 ◽  
pp. 207-215
Author(s):  
Sandy Triady ◽  
Deddy P. Koesrindartoto
Keyword(s):  
Market Reaction ◽  
Stock Exchange ◽  
Earnings Announcement

Studying the Effect of Changing the Managing Director on the Abnormal Returns of Shares of Companies Listed on the Iraqi Stock Exchange

2021 ◽  
Vol 39 (11) ◽  
Author(s):  
Hussein Hasan ◽  
Hudaa Nadhim Khalbas ◽  
Farqad Mohammed Bakr AL Saadi
Keyword(s):  
Stock Returns ◽  
Significant Relationship ◽  
Stock Prices ◽  
Market Reaction ◽  
Stock Exchange ◽  
Hypothesis Test ◽  
Abnormal Returns ◽  
The Other ◽  
Other Hand ◽  
Abnormal Stock Returns

The aim of this research is to study the market reaction to the change of the managing director and how this change affects the abnormal returns of the shares. The research is based on the information published by the companies listed on the Iraq Stock Exchange, and 35 companies were selected for the period from 2015 to 2019. The results of the hypothesis test for this study show that there is a negative and significant relationship between the change of the managing director and abnormal stock returns. On the other hand, investors undervalue stock prices when changing CEOs. As a result, the stock returns are less than expected.

Market reaction to the Karachi stock exchange floor imposition

2015 ◽  
Vol 4 (2) ◽  
pp. 275-291 ◽  
Author(s):  
Saqib Sharif
Keyword(s):  
Financial Markets ◽  
Market Reaction ◽  
Stock Exchange ◽  
Price Volatility ◽  
Price Limits ◽  
Content Type ◽  
Market Intervention ◽  
Price Floor ◽  
Price Freeze ◽  
Regulatory Intervention

Purpose – The purpose of this paper is to investigate the market reaction to the decision made by the management of the Karachi Stock Exchange (KSE) to impose a price floor that resulted in trading curbs in 2008. The paper analyzes if regulatory intervention helped in restoring investor confidence. Design/methodology/approach – The paper examines the effect of enforcement of a price floor and trading curbs by splitting the time period studied into two periods: pre-floor and post-floor period. The parametric t-statistics and non-parametric Mann-Whitney test are used to compare the abnormal returns (ARs), abnormal trading volume, bid-ask spread, Amihud illiquidity ratio, and price volatility between the two periods. Event study was conducted to observe the behavior of market returns surrounding market-wide price floor. Finally, multivariate regression analysis was also applied by controlling for factors that might influence valuation, liquidity, and volatility. The standard errors have been corrected for cross-sectional clustering due to market-wide restrictions. Findings – The study found an adverse impact of price freeze and trading curb in the KSE, following the relaxation of floor (resumption of active trading). First, the price of securities (or ARs) significantly declined following the relaxation of the price freeze. Second, the market liquidity deteriorated following the relaxation of the price floor. Third, the price volatility increased in the post-floor period. It seems that the decision made by the KSE’s board to implement lower cap on prices for an extended period was ineffective. Practical implications – Market intervention by regulators to bring calm in the financial markets have negative consequences across the globe. The results presented in this paper suggest that implementing price floor brought inefficiency in the market and prevented firms from raising capital to finance their future investments. The author believe this study will add to the knowledge base of regulatory intervention and its impact on the performance of financial markets. Originality/value – There is no empirical evidence on the impact of price limits on volatility in emerging markets. The author selected Pakistan as a case study, where we particularly focus upon impact of the enforcement of a price floor around the peak of Global Financial Crisis (or market intervention) in Pakistan. This study also documents the effect of trading curb on liquidity and volatility in an emerging market, given that a majority of research on trading halt/price limits is based on developed markets.

scholarly journals PENGARUH INFORMASI LABA TERHADAP REAKSI PASAR DENGAN MANAJEMEN LABA RIIL DAN MANAJEMEN LABA AKRUAL SEBAGAI VARIABEL MODERASI

2019 ◽  
Vol 13 (1) ◽  
pp. 1-23
Author(s):  
Santi Santi ◽  
Kurniawati Kurniawati
Keyword(s):  
Earnings Management ◽  
Market Reaction ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Manufacturing Companies ◽  
Statistical Tool ◽  
Significance Level ◽  
Moderating Variables ◽  
Earnings Information ◽  
Final Sample

This study aims to investigate the effect of earnings information on market reaction with accrual and real earnings management as the moderating variables. The sample of this study is manufacturing companies listed in the Indonesia Stock Exchange in 2012-2015. Samples are collected by purposive sampling and resulted in 58 companies as the final sample. Data were analyzed using Moderated Regression Analysis (MRA) for testing hypothesis with significance level 5%. The statistical tool used is SPSS 22. The results of this study shown that market reacts positively significant toward earnings management and real earnings management in aggregate weaken the effect of earnings information toward market reaction. Real earnings management through discretionary expenses strengthen the effect of earnings information toward market reaction. Meanwhile, real earnings management through sales manipulation and overproduction, and accrual earnings management do not moderate the effect of earnings information toward market reaction.

scholarly journals MARKET REACTION ON THE ANNOUNCEMENT OF SRI KEHATI INDEX IN INDONESIAN STOCK EXCHANGE

2019 ◽  
Author(s):  
Anggita Langgeng Wijaya ◽  
Mia Noviyanti ◽  
Probo Mahayu
Keyword(s):  
Trading Volume ◽  
Market Reaction ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Rank Test ◽  
Stock Trading ◽  
Population Sampling ◽  
Signed Rank ◽  
Before And After ◽  
Signed Rank Test

The purpose of this study was to test the market reaction to the announcement of the Sri Kehati Index on the Indonesia Stock Exchange. The population in this study is all companies included in the Sri Kehati Index from 2013 to 2016. The selection of samples was taken by the population sampling method. Hypothesis testing is done by paired t test and Wilcoxon Signed Rank Test. The findings of this research are: 1) there is no difference in abnormal returns before and after the announcement of the Sri Kehati Index on the Indonesia Stock Exchange. 2) There is a difference in the activity of stock trading volume before and after the announcement of the Sri Kehati index in the 5th and 6th periods, but there is no difference in the activity of stock trading volume in other periods. The Indonesia Stock Exchange did not react consistently to the announcement of the Sri Kehati Index.

scholarly journals Financial Ratios, Economic Value Added and Market Reaction: A Quantitative Study on Indonesia Stock Exchange

2020 ◽  
Vol 7 (2) ◽  
pp. 82-91
Author(s):  
Indrawan Azis ◽  
Dara Ayu Nianty ◽  
Andi Marlinah
Keyword(s):  
Market Reaction ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Secondary Data ◽  
Partial Least Square ◽  
Least Square ◽  
Economic Value Added ◽  
Manufacturing Companies ◽  
Market Reactions

Reflecting on the phenomenon of stock market movements on the Indonesia Stock Exchange, this study was appointed to examine the effect of the effect of liquidity, solvency, and Economic Value Added (EVA) on market reactions in manufacturing companies listed on the IDX. The research method uses a quantitative approach, and types are categorized in explanatory research. The population in this study is manufacturing companies listed on the Indonesia Stock Exchange in the period 2017-2019. Determination of the sample to be tested in this study using a purposive sampling method and obtained 36 companies. Secondary data were obtained from the Capital Market Information Center (PIPM) the Indonesia Stock Exchange (IDX). The analytical method is Partial Least Square (PLS) with the assistant of SmartPLS 3.0 software. The results of the study showed that all exogenous variables positively and significantly influenced endogenous variable (EVA and Market Reaction). Research findings enrich previous studies on understanding market reactions and their impact on the development of corporate financial strategies in Indonesia.

“Stiff Business Headwinds and Uncharted Economic Waters”: The Use of Euphemisms in Earnings Conference Calls

2021 ◽  
Author(s):  
Kate Suslava
Keyword(s):  
Market Reaction ◽  
Abnormal Returns ◽  
Bad News ◽  
Conference Calls ◽  
Investor Attention ◽  
Earnings Announcement ◽  
Negatively Associated ◽  
The Impact

This paper studies whether euphemisms obfuscate the content of earnings conference calls and cause investors to underreact. I argue that managers’ use of euphemisms can alleviate the impact of bad news and delay the market reaction to adverse information. Using a dictionary of corporate euphemisms, I find that their use by managers—but not by analysts—is negatively associated with both immediate and future abnormal returns, and their frequency moderates the negative market reaction to bad earnings news. Finally, stock underreaction is more pronounced on busy earnings announcement dates, when investor attention is distracted. This paper was accepted by Brian Bushee, accounting.

Mandatory Preliminary Performance Reports: Evidence from China

2015 ◽  
Vol 15 (1) ◽  
pp. 67-88
Author(s):  
Yunling Song ◽  
Ling Zhou
Keyword(s):  
Market Reaction ◽  
Stock Exchange ◽  
Annual Reports ◽  
Mandatory Disclosure ◽  
Negative Consequences ◽  
High Quality ◽  
Disclosure Requirements ◽  
Small And Medium Enterprise ◽  
Medium Enterprise ◽  
Performance Reports

ABSTRACT Companies listed on China's Shenzhen Stock Exchange Small and Medium Enterprise Board are required to release preliminary performance reports before the end of February if they cannot file annual reports by that time. Although this mandate might improve the timeliness of information, we find that such preliminary releases are inaccurate and optimistic, potentially misleading investors. Sixteen percent of preliminary reports contain significant inaccuracies (i.e., when actual numbers deviate from preliminary ones by at least 10 percent). Firms in earlier stages of the auditing process, as well as those with low-quality preliminary reports in prior years, poorer performance, greater accounting complexity, and fewer resources, are more likely to issue low-quality preliminary performance reports. Market reaction tests indicate that investors consider preliminary releases to be informative and generally cannot differentiate between high-quality and low-quality preliminary releases. Moreover, when annual reports are filed, investors are surprised by the differences between the annual reports and the preliminary reports. Thus, our paper demonstrates that mandatory disclosure requirements may have unintended negative consequences.

scholarly journals Reaksi Pasar Atas Pengumuman Corporate Governance Perception Index

2019 ◽  
pp. 2432 ◽  
Author(s):  
I Gede Krisna Dharma Putra ◽  
I Gusti Ayu Eka Damayanthi
Keyword(s):  
Corporate Governance ◽  
Capital Market ◽  
Abnormal Return ◽  
Sampling Method ◽  
Market Reaction ◽  
Stock Exchange ◽  
Stock Trading ◽  
Announcement Date ◽  
Analysis Technique ◽  
The One

CGPI is the result of research from the Indonesian Institute for Corporate Governance (IICG) in collaboration with SWA magazine. This study aims to determine the reaction of the capital market on the CGPI announcement. The research was conducted at the company surveyed by CGPI for the period 2013-2016 by accessing the Indonesia Stock Exchange, IICG, Yahoo finance and SWA magazines. The population in this study were the companies surveyed by the Corporate Governance Perception Index (CGPI) for the period 2013-2016. The number of samples taken was 61 using the purposive sampling method. The data analysis technique used is the one sample t-test. Based on the results of the analysis, it was found that during the seven days of stock trading around the announcement of the Corporate Governance Perception Index (CGPI) without involving the comfounding effect (other announcements) there was no market reaction around the CGPI announcement date. Keywords: Corporate Governance Perception Index (CGPI), abnormal return, market reaction

scholarly journals PENGUJIAN REAKSI PASAR TERHADAP PERISTIWA MERGER DAN AKUISISI DI BURSA EFEK INDONESIA (BEI)

2017 ◽  
pp. 3325
Author(s):  
Rintohan Malau ◽  
Luh Putu Wiagustini ◽  
Luh Gede Sri Artini
Keyword(s):  
Linear Regression ◽  
Mergers And Acquisitions ◽  
Multiple Linear Regression ◽  
Market Reaction ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Market Model ◽  
Expected Returns ◽  
Sample Material ◽  
A Company

This study aimed to see whether there abnormal returns around the period of mergers and acquisitions, using a market model and the expected returns of 100 days, as well as using the event period is seven days before and seven days after the announcement of mergers and acquisitions. The sample was a company for mergers and acquisitions in Indonesia Stock Exchange during the years 2013-2015, sampling in this study did not consider the corporate Action others besides mergers and acquisitions alone, so it acquired 30 companies as the sample material, the analysis tools used in this research is multiple linear regression with Level of Singnificance by 5%. The results showed that there were no abnormal returns around the period of the study, so it can be said that there is no market reaction around the announcement of mergers and acquisitions as evidenced by a greater significance than 0.05%. Most likely this is because there is no leakage of information during the period of the study.

Market Reaction To Changes In Dividend Payments Policy In Jordan

2012 ◽  
Vol 28 (6) ◽  
pp. 1193
Author(s):  
Wasim K. Al-Shattarat ◽  
Jamal A. Al-Khasawneh ◽  
Husni K. Al-Shattarat
Keyword(s):  
Market Reaction ◽  
Value Relevance ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Market Model ◽  
Expected Returns ◽  
Dividend Payments ◽  
Adjusted Model ◽  
Model Market ◽  
Non Parametric

The purpose of this paper is to examine empirically the signalling theory for a sample of firms listed at Amman Stock Exchange (ASE) during the period 2001 to 2006. The sample consists of 215 observations. The Event Study Methodology (ESM) is employed to examine the market reaction to dividend change announcements. The nave model is used to classify the sample under four sub samples; Dividend Increase, Dividend Decrease, Dividend No Change and No Dividend No Change. The market model, mean adjusted model, market adjusted model, market model adjusted with Scholes and Williams and market model adjusted with Fowler and Rorke models are used to generate the expected returns. Also, the t-test, ZD test and Corrados non-parametric test are used to examine the significance of the mean and cumulative abnormal returns. Overall, the results show that the market reacts positively to dividend increase, dividend decrease and dividend no change announcements. In addition, the results indicate that there is no significant market reaction to dividend no change sample with zero distributions. This result indicated that there is little value-relevance to dividend change announcements. The interpretation of the positive market reaction is related to dividend release announcements rather than dividend changes. Therefore, there is some support to the signalling hypothesis to dividend release. Furthermore, applying thin trading models and non-parametric tests leads to the same conclusion.

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