Do RRA Earnings Improve the Usefulness of Reported Earnings in Reflecting the Performance of Oil and Gas Producing Firms?

1992 ◽  
Vol 7 (3) ◽  
pp. 335-356 ◽  
Author(s):  
Dennis T. Kennedy ◽  
Yong-Ha Hyon
Keyword(s):  
Stock Prices ◽  
Oil And Gas ◽  
Abnormal Returns ◽  
Volatile Oil ◽  
Inside Trading ◽  
Factors Affecting ◽  
Trading Model ◽  
Annual Earnings ◽  
Reported Earnings ◽  
Advance Knowledge

This study employs a regression model and an inside-trading model to evaluate whether three component values of the Reserve Recognition Accounting (RRA) Supplemental Earnings Summary improve the extent to which reported earnings reflect factors affecting stock prices. The analysis is conducted for the 1979-1980 period of volatile oil prices, when the events that the RRA Earnings Summary was designed to reflect (exploration and discovery) were more likely to be significant. Results from the regression analysis indicate that RRA earnings variables make a significant incremental contribution to explaining the variance in abnormal returns accumulated over the fiscal years described by the annual earnings values. Results from an inside-trading model indicate that advance knowledge of RRA earnings would be more useful to an investor than advance knowledge of the traditional historical cost earnings. The implication of these results is that data from the RRA Supplemental Earnings Summary improve the usefulness of reported earnings in reflecting the performance of oil and gas producing firms.

scholarly journals THE EFFECTS OF CAR WASH OPERATION ON THE BRAZILIAN CAPITAL MARKET: THE PETROBRAS CASE

2021 ◽  
Vol 22 (2) ◽  
Author(s):  
ELIANA M. M. F. TORGA ◽  
CAROLINA M. S. ROMA ◽  
MIRIAN A. PIRES ◽  
PAULA M. S. ROMA ◽  
BRUNO P. FERREIRA
Keyword(s):  
Capital Market ◽  
Stock Prices ◽  
Stock Price ◽  
Oil And Gas ◽  
Abnormal Returns ◽  
Google Trends ◽  
Volume Index ◽  
Search Volume ◽  
Car Wash ◽  
Oil And Gas Sector

ABSTRACT Purpose: The study aimed to identify the effects of the Car Wash Operation on the Brazilian capital market, focusing on the state-owned company Petróleo Brasileiro S.A. (Petrobras), including in the analysis other publicly traded companies that belong to the oil and gas sector. Originality/value: This research is relevant because it advances in discussing the influence of the Car Wash Operation on the stock price in the Brazilian context. This study contributes to revealing the use of the Google Trends tool to measure market attention and its effects. Design/methodology/approach: This is a quantitative research based on evidence of the volume of research in relation to the movement of the stock prices. The sample consisted of data from Petrobras and other companies belonging to the oil and gas sector in the period from January 2, 2013, to December 28, 2018. The most relevant dates were defined through the search volume index for the terms “Car Wash” and “corruption”, obtained from the Google Trends tool. The GARCH model (1,1) was adopted in the estimates. Findings: The results obtained from the dummies inserted to capture the abnormal returns showed a significant reaction in the behaviors of the assets. The flow of capital seems to have opted for assets of greater confidence than PETR3 and PETR4 in a few weeks of the Operation. This work showed that, in general, the outbreak of the Car Wash Operation influenced and brought some instability to other companies in the sector.

scholarly journals The Wealth Effects of Share Repurchases in Malaysia

2013 ◽  
Author(s):  
Rohaida Abdul Latif ◽  
Kamarun Nisham Taufil Mohd ◽  
Wan Nordin Wan Hussin ◽  
Ku Nor Izah Ku Ismail
Keyword(s):  
Abnormal Return ◽  
Abnormal Returns ◽  
Economic Benefits ◽  
Wealth Effects ◽  
Repurchase Intentions ◽  
Factors Affecting ◽  
Price Performance ◽  
Long Run ◽  
Price Effects ◽  
Reported Earnings

This study aims to assess whether buyback activities in Malaysia are able to provide any economic benefits to shareholders both in the short-term and in the long-run. Specifically this study investigates the price effects on: (a) the announcement surrounding the repurchase intentions and implementation dates, (b) factors affecting the price effects on implementation dates and (c) long-run price effects subsequent to repurchase implementation. Using event study methodologies, this study finds no significant immediate price reactions surrounding repurchase intention dates. However, there is significant evidence of positive abnormal returns in days –5 to +5 surrounding the announcement of repurchase implementation. As for the factors affecting abnormal returns, this study finds that abnormal return responds positively to better prior price performance, dividend yield, directors’ holdings, and fraction of shares repurchased. However, abnormal return responds negatively to the previous amount of cash held, reported earnings per share, and market-to-book value. Using a three year period as a measure of long-run, this study finds that there is no evidence that repurchasing firms experience superior or inferior price performance. This is one of the first studies in Malaysia to examine the long- run wealth effects of share repurchase.   Keywords: Share buybacks, shareholders’ wealth, corporate finance, long-run performance, emerging, Malaysia.

An Empirical Investigation of Factors Affecting Stock Prices in Vietnam

2014 ◽  
pp. 74-89 ◽  
Author(s):  
Vinh Vo Xuan
Keyword(s):  
Exchange Rates ◽  
Crude Oil ◽  
Foreign Exchange ◽  
Stock Prices ◽  
Global Financial Crisis ◽  
Oil Prices ◽  
Foreign Exchange Rates ◽  
Factors Affecting ◽  
Crude Oil Prices ◽  
Before And After

This paper investigates factors affecting Vietnam’s stock prices including US stock prices, foreign exchange rates, gold prices and crude oil prices. Using the daily data from 2005 to 2012, the results indicate that Vietnam’s stock prices are influenced by crude oil prices. In addition, Vietnam’s stock prices are also affected significantly by US stock prices, and foreign exchange rates over the period before the 2008 Global Financial Crisis. There is evidence that Vietnam’s stock prices are highly correlated with US stock prices, foreign exchange rates and gold prices for the same period. Furthermore, Vietnam’s stock prices were cointegrated with US stock prices both before and after the crisis, and with foreign exchange rates, gold prices and crude oil prices only during and after the crisis.

An Empirical Study on Efficient Market Hypothesis with reference to FMCG Sector

GIS Business ◽  
2020 ◽  
Vol 15 (1) ◽  
pp. 109-126
Author(s):  
Nitin Tanted ◽  
Prashant Mistry
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Weak Form ◽  
Efficient Market Hypothesis ◽  
Controversial Issues ◽  
Efficient Market ◽  
Price Movements ◽  
Run Test ◽  
Stock Price Movements

One of the highly controversial issues in the area of finance is “Efficient Market Hypothesis”. Efficient Market Hypothesis states that, “In an efficient market, all available price information is reflected in the stock prices and it is not possible to generate abnormal returns compared to other investors.” A lot of studies conducted previouslyto test the Efficient Market Hypothesis, confirmed the theory until recent years, when some academicians found it to be non-applicable in financial markets. According to them, it is possible to forecast the stock price movements using Technical Analysis. The results of various studies have been inconclusive and indefinite about the issue. This study attempted to test the efficiency of FMCG Sector stocks in India in its weak form. For the study, closing prices of top 10 stocks from Nifty FMCG index has been taken for the 5-year period ranging from 1st October 2014 to 30th September 2019. Wald-Wolfowitz Run test has been used to test the haphazard movements in the stock price movements. The results indicated that FMCG sector stocks does support the Efficient Market Hypothesis and exhibit efficiency in its weak form. Hence, it is not possible to accurately predict the price movements of these stocks.

Retroactive Tax Legislation, Reported Earnings, and Investors' Responses to Earnings “Surprises”: Evidence from R&D Credit Extensions

2016 ◽  
Vol 38 (2) ◽  
pp. 87-109 ◽  
Author(s):  
Brian Bratten ◽  
David S. Hulse
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Unintended Consequences ◽  
Data Availability ◽  
Substantial Part ◽  
Tax Rates ◽  
Financial Reporting Standards ◽  
Average Decrease ◽  
Tax Legislation ◽  
Reported Earnings

ABSTRACT When Congress retroactively extends a temporary tax rule, the effect on earnings is complex because financial reporting standards require firms to apply the integral method using enacted tax law to determine quarterly income tax expense. We model this effect and examine earnings announcements following retroactive extensions of the federal R&D tax credit to test how investors incorporate the effect into stock prices. We find that investors respond when earnings are announced, even though the effect could have been determined several weeks earlier. We also show that in recent years, the effects of retroactive extensions of the credit are a substantial part of the average decrease in effective tax rates (ETRs) from the third to fourth quarter for calendar-year firms. Our results have implications for investors and researchers examining earnings and ETRs around retroactive extensions of temporary tax rules and suggest that congressional delays and GAAP interact to produce unintended consequences. JEL Classifications: M41; M48; G14; H25. Data Availability: Data used in this study are available from the sources identified in the text.

scholarly journals The Impact of COVID-19 on the Stock Price of Socially Responsible Enterprises: An Empirical Study in Taiwan Stock Market

2021 ◽  
Vol 18 (4) ◽  
pp. 1398
Author(s):  
Kuo-Jung Lee ◽  
Su-Lien Lu
Keyword(s):  
Stock Market ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Recovery Phase ◽  
Socially Responsible ◽  
Cumulative Impact ◽  
Study Approach ◽  
Price Performance ◽  
The Impact

This study examines the impact of the COVID-19 outbreak on the Taiwan stock market and investigates whether companies with a commitment to corporate social responsibility (CSR) were less affected. This study uses a selection of companies provided by CommonWealth magazine to classify the listed companies in Taiwan as CSR and non-CSR companies. The event study approach is applied to examine the change in the stock prices of CSR companies after the first COVID-19 outbreak in Taiwan. The empirical results indicate that the stock prices of all companies generated significantly negative abnormal returns and negative cumulative abnormal returns after the outbreak. Compared with all companies and with non-CSR companies, CSR companies were less affected by the outbreak; their stock prices were relatively resistant to the fall and they recovered faster. In addition, the cumulative impact of the COVID-19 on the stock prices of CSR companies is smaller than that of non-CSR companies on both short- and long-term bases. However, the stock price performance of non-CSR companies was not weaker than that of CSR companies during times when the impact of the pandemic was lower or during the price recovery phase.

Stock Price Behavior Associated with Post-1974–75 LIFO Adoptions Announced at Alternative Disclosure Times

1996 ◽  
Vol 11 (4) ◽  
pp. 535-564 ◽  
Author(s):  
Morton Pincus ◽  
Charles E. Wasley
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Earnings Announcements ◽  
Market Response ◽  
Price Behavior ◽  
Positive Information ◽  
Earnings Announcement ◽  
Earnings Growth ◽  
Adoption Decision ◽  
Annual Earnings

We examine the behavior of stock prices at the time of post-1974–75 LIFO adoption announcements. We exploit recent theoretical and empirical developments in the LIFO adoption literature in an attempt to resolve some of the mixed findings in Hand (1993). We study LIFO adoptions announced prior to as well as at the time of annual earnings announcements. Previous research has mostly centered on 1974–75 adoptions made at the time of annual earnings announcements. Our study of LIFO adoptions announced prior to annual earnings announcement dates enables us to provide evidence on whether the early announcement of a LIFO adoption is used by firms to signal positive information about earnings growth. Collectively, our results suggest that in explaining the market response to LIFO adoption announcements, extant models of the LIFO adoption decision do not fully capture the richness of differing inflationary environments or of alternative disclosure times.

Strengthening Low Carbon Steels for Oil and Gas Spiral Welded Pipes

2006 ◽  
Author(s):  
I. Yu. Pyshmintsev ◽  
D. A. Pumpyanskyi ◽  
Yu. O. Kamenskih ◽  
I. N. Poznyakovsky ◽  
I. L. Permyakov
Keyword(s):  
Oil And Gas ◽  
Controlled Rolling ◽  
Carbon Steels ◽  
Low Carbon ◽  
Line Pipe ◽  
Low Carbon Steels ◽  
Factors Affecting ◽  
Steel Processing ◽  
Line Pipe Steel ◽  
Strain Hardening Behavior

Strengthening mechanisms applied for modern line pipe steel design were studied. Low carbon steels alloyed with Mn, Mo, V, Nb processed by the way of controlled rolling were developed for spiral welded X65-X80 line pipes up to 1420 mm diameter. Formation of the microstructure during steel processing was studied. The effects of typical microstructure for the steels on mechanical properties, strain hardening behavior and Bauschinger effect were studied. Main metallurgical factors affecting on strength measured in plates and pipes were revealed using physical and computer simulations.

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.

Determination of Bubble-Point and Dew-Point Pressure Without a Visual Cell

2014 ◽  
Author(s):  
R.. Hosein ◽  
R.. Mayrhoo ◽  
W. D. McCain
Keyword(s):  
Oil And Gas ◽  
Saturation Pressure ◽  
Volatile Oil ◽  
Phase Region ◽  
Gas Condensate ◽  
Dew Point ◽  
Bubble Point ◽  
Point Pressure ◽  
Dew Point Pressure

Abstract Bubble-point and dew-point pressures of oil and gas condensate reservoir fluids are used for planning the production profile of these reservoirs. Usually the best method for determination of these saturation pressures is by visual observation when a Constant Mass Expansion (CME) test is performed on a sample in a high pressure cell fitted with a glass window. In this test the cell pressure is reduced in steps and the pressure at which the first sign of gas bubbles is observed is recorded as bubble-point pressure for the oil samples and the first sign of liquid droplets is recorded as the dew-point pressure for the gas condensate samples. The experimental determination of saturation pressure especially for volatile oil and gas condensate require many small pressure reduction steps which make the observation method tedious, time consuming and expensive. In this study we have extended the Y-function which is often used to smooth out CME data for black oils below the bubble-point to determine saturation pressure of reservoir fluids. We started from the initial measured pressure and volume and by plotting log of the extended Y function which we call the YEXT function, with the corresponding pressure, two straight lines were obtained; one in the single phase region and the other in the two phase region. The point at which these two lines intersect is the saturation pressure. The differences between the saturation pressures determined by our proposed YEXT function method and the observation method was less than ± 4.0 % for the gas condensate, black oil and volatile oil samples studied. This extension of the Y function to determine dew-point and bubble-point pressures was not found elsewhere in the open literature. With this graphical method the determination of saturation pressures is less tedious and time consuming and expensive windowed cells are not required.

Sign in / Sign up

Export Citation Format

Share Document