scholarly journals An Empirical Study on the Announcement of Corporate Quarterly Results in India

2013 ◽  
Vol 1 (1) ◽  
pp. 119
Author(s):  
S. Saravanakumar ◽  
A. Mahadevan
Keyword(s):  
Empirical Study ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Market Place ◽  
Earnings Announcement ◽  
Market Return ◽  
The Impact ◽  
A Company ◽  
Buying Decisions

<p>Announcement of quarterly results is the course of communicating the performance of a company to its<br />owners. Investors’ long-term buying decisions are largely based on the earnings stream of the firm. In<br />order to show the progress of the company, the earnings position is revealed as per the listing<br />agreement at a regular interval. Normally a higher earnings than the previous quarter earnings should<br />be welcomed by the market. This should be associated with greater return after the result is announced.<br />All higher return after the announcement cannot say to be due to the earnings results. To find out the<br />impact of results on returns, the impact of other factors in returns is to be segregated. The impact of<br />other factors in return is taken from the index which is nothing but the market return. The<br />announcement of earnings is unique and specific to a company, to study its impact on the market place,<br />the impact of other factors is removed, that is why the period is limited to 32 days and the return is<br />calculated for 31 days. This study examines abnormal returns of earnings announcement during the<br />pre-announcement and post announcement period. This study is based on samples of 50 Nifty<br />companies listed on National Stock Exchange, exhibited that investors do not gain value from earnings<br />announcement. Indeed shareholders earned little value over a period of 15 days prior to the earnings<br />announcement through to 15 days after the announcement. The lower return may be partially<br />compensated because of the current earnings yield. This study also indicates that announcement of<br />result does not convey any useful information to the investing community, which needs to be further<br />investigated.</p>

scholarly journals Light a lamp and look at the stock market

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Radeef Chundakkadan
Keyword(s):  
Stock Market ◽  
Financial Distress ◽  
Investor Sentiment ◽  
Downside Risk ◽  
Bond Yields ◽  
Risky Assets ◽  
Market Participants ◽  
Market Return ◽  
The Impact

AbstractIn this study, we investigate the impact of the light-a-lamp event that occurred in India during the COVID-19 lockdown. This event happened across the country, and millions of people participated in it. We link this event to the stock market through investor sentiment and misattribution bias. We find a 9% hike in the market return on the post-event day. The effect is heterogeneous in terms of beta, downside risk, volatility, and financial distress. We also find an increase (decrease) in long-term bond yields (price), which together suggests that market participants demanded risky assets in the post-event day.

scholarly journals Environmental Management, Green Innovation, and Social–Open Innovation

2021 ◽  
Vol 7 (1) ◽  
pp. 89
Author(s):  
Pham Thu Huong ◽  
Jacob Cherian ◽  
Nguyen Thi Hien ◽  
Muhammad Safdar Sial ◽  
Sarminah Samad ◽  
...  
Keyword(s):  
Environmental Management ◽  
Stock Exchange ◽  
Advanced Technology ◽  
Green Innovation ◽  
Social Image ◽  
Whole Process ◽  
Corporate Environmental Management ◽  
The Impact ◽  
The Relationship

The present study aims to determine the impact of green innovation (GI) on the overall performance of an organization while keeping the variable of environmental management (EM) as a moderator. We used a dataset consisting of four data years, from 2014 to 2017, of A-share companies listed on the Shanghai Stock Exchange (SSE). The concept of green innovation refers to the use of advancements in technology that enable savings in energy, along with the recycling of waste material. When advanced technology is utilized in the production process, the products are referred to as green products and the whole process of adopting such technologies and product design is referred to as “Corporate Environmental Management”. Such innovations improve the overall financial performance of companies as it enables them to improve their social image by reducing their carbon footprint and ensures their long-term sustainability. The main issue is the limited focus and attention given to the topic, from the perspective of companies. This research focuses on the impact of green innovation and the importance of environmental management for the sustainability of companies. Our findings suggest that the relationship between green innovation and the performance of the company is positive and verifies the existence of moderating effects of environmental management on the relationship between green innovation and firm performance. Implications are given to academia and practitioners.

Stock Market Reaction on Green-Bond Issue: Evidence from Indian Green-Bond Issuers

2021 ◽  
pp. 097226292110225
Author(s):  
Rakesh Kumar Verma ◽  
Rohit Bansal
Keyword(s):  
Stock Returns ◽  
Financial Institutions ◽  
Stock Price ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Developed Countries ◽  
Low Carbon ◽  
Bond Issue ◽  
The Government ◽  
The Impact

Purpose: A green bond is a financial instrument issued by governments, financial institutions and corporations to fund green projects, such as those involving renewable energy, green buildings, low carbon transport, etc. This study analyses the effect of green-bond issue announcement on the issuer’s stock price movement. It shows the reaction of the stock price after the issue of green bonds. Methodology: This study is based on secondary data. Green-bond issue dates have been collected from newspaper articles from different online sources, such as Business Standard, The Economic Times, Moneycontrol, etc. The closing prices of stocks have been taken from the NSE (National Stock Exchange of India Limited) website. An event window of 21 days has been fixed for the study, including the 10 days before and after the issue date. Data analysis is carried out through the event study method using the R software. Calculation of abnormal returns is done using three models: mean-adjusted returns model, market-adjusted returns model and risk-adjusted returns model. Findings: The results show that the issue of green bonds has a significant positive effect on the stock price. Returns increase after the green-bond issue announcement. Although the announcement day shows a negative return for all the samples taken for the study, the 10-day cumulative abnormal return (CAR) is positive. Thus, green-bond issues lead to positive sentiments among investors. Research implications: This research article will help the government issue more green bonds so that the proceeds can be utilized for green projects. The government should motivate corporations and financial institutions to issue more green bonds to help the economy grow. In India, very few organizations have issued a green bond. It will be beneficial if these players issue green bonds, as it will increase the firms’ value and boost returns to the investors. Originality/value: The effect of green-bond issue on stock returns has been analysed in some studies in developed countries. This is the first study to examine the impact of green-bond issue on stock returns in the Indian context, to the best of our knowledge.

Towards a more ethical market: the impact of ESG rating on corporate financial performance

2019 ◽  
Vol 15 (1) ◽  
pp. 11-27 ◽  
Author(s):  
Giovanni Landi ◽  
Mauro Sciarelli
Keyword(s):  
Data Analysis ◽  
Corporate Social Performance ◽  
Stock Exchange ◽  
Social Performance ◽  
Panel Data Analysis ◽  
Abnormal Returns ◽  
Socially Responsible ◽  
Content Type ◽  
Corporate Social ◽  
The Impact

Purpose This paper fits in a research field dealing with the impact of Corporate Ethics Assessment on Financial Performance. The authors argue how environmental, social and governance (ESG) paradigm, meant to measure corporate social performance by rating issuance, can impact on abnormal returns of Italian firms listed on Financial Times Stock Exchange Milano Indice di Borsa (FTSE MIB) Index, developing a panel data analysis which runs from 2007 to 2015. Design/methodology/approach This study aims at exploring whether socially responsible investors outperform an excess market return on Italian Stock Exchange because of their investment behavior, testing statistically the relationship between the yearly ESG assessment issued by Standard Ethics Agency on FTSE MIB’s companies and their abnormal returns. To verify the impact of an ESG Rating on a company’s abnormal return, the authors developed a panel data analysis through a Fixed Effects Model. They measured abnormal returns via Fama–French approach, running a yearly Jensen’s Performance Index for each company under investigation. Findings The empirical results denote in Italy both a growing interest to corporate social responsibility (CSR) and sustainability by managers over the past decade, as well as an improving quality in ESG assessments because of a reliable corporate disclosure. Thus, despite investors have been applying ESG criteria in their stock – picking operations, the authors found a not positive and statistically significant impact in terms of market premium, when they have been undertaking a socially responsible investment (SRI). Practical implications The findings described above show that ethics is not yet a reliable fundraising tool for Italian-listed companies, despite SRIs having a positive growth rate over past decade. Investors seem to be not pricing CSR on Stock Exchange Market; therefore, listed companies cannot be rewarded with a premium price because of their highly stakeholder oriented behavior. Originality/value This paper explores, for the first time in Italy, when market extra-returns (if any) are related to corporate social performance and how managers leverage ethics to build capital added value.

scholarly journals Impacto dos Ratings de crédito nas ações de empresas de capital aberto no Brasil

2017 ◽  
Vol 16 (2) ◽  
pp. 573-602
Author(s):  
Rafaela Augusta Cunha Silveira ◽  
Renata Turola Takamatsu ◽  
Bruna Camargos Avelino
Keyword(s):  
Stock Prices ◽  
Credit Rating ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Final Analysis ◽  
Share Prices ◽  
New Information ◽  
Agency Issues ◽  
Study Methodology ◽  
The Impact

Resumo O rating de crédito expressa uma opinião, por intermédio de escalas, sobre a qualidade do crédito de empresas, utilizado-a como medida de avaliação de risco no mercado. Agências de classificação de risco de crédito, como a Moody’s, divulgam os ratings que atribuem às empresas. Primeiramente, essas agências emitem o new rating, que representa o primeiro rating da companhia, e, posteriormente, essa emissão pode apresentar variações, denominadas upgrades e downgrades, relativas a boas e más notícias, respectivamente. Além disso, os ratings podem ser colocados em uma Watchlist quando, em breve, pode haver uma mudança do rating para downgrade ou para upgrade. O objetivo com este estudo consistiu, diante do que foi tratado, em abordar o impacto do rating de crédito sobre os preços das ações de empresas listadas na bolsa de valores brasileira. Para alcançar o objetivo proposto, foi analisada uma amostra de 44 empresas comercializadas na BM&FBovespa e 65 ratings nacionais de longo prazo emitidos pela Moody’s entre 2000 e 2015. Utilizou-se a metodologia de estudo de eventos, com os retornos normais calculados pelo modelo de retornos ajustados ao risco e ao mercado, e o Teste-F e o Teste-T para verificar a significância dos resultados. As análises finais evidenciaram que os preços das ações não são afetados de forma significativa pelas divulgações dos new ratings, downgrades, upgrades, on watch – possible downgrades e on watch – possible upgrades em nenhuma janela do evento, indicando que os ratings, para a amostra analisada, não trazem novas informações ao mercado.Palavras-chave: Ações. Rating. Estudo de eventos. Retornos anormais. Abstract Credit ratings are used as a mean to investors get new information on the companies by reducing the information asymmetry in the market. Thus, the rating is an important mean of business information with investors, enabling share prices relating to companies react to it. Branches of credit rating as Moody's, disclose the ratings they assign to companies. First, the agency issues the new rating, which represents the company's first rating, then this issue may vary, upgrades and downgrades calls relating to good and bad news respectively. In addition, the ratings could be placed in a Watchlist when, soon there may be a change to the rating downgrade or upgrade. The purpose of this study was to discuss the impact that the credit rating has on stock prices of companies listed on the Brazilian stock exchange. For a sample of 44 companies traded on BM&FBovespa and 65 long-term national ratings issued by Moody's between 2000 and 2015, we used the event study methodology, with normal returns calculated by the model of returns adjusted for risk and market the F-Test and T-Test to test the significance of the results. The final analysis showed that stock prices are not significantly affected by the disclosures of new ratings, downgrades, upgrades, on watch – possible downgrades and on watch – possible upgrades in any event window, indicating that the ratings do not bring new information to the market.Keywords: Stocks. Rating. Event studies. Abnormal returns.

scholarly journals Personal Liability Of Director Of A Company In Insolvency & Investor Frauds Cases

2021 ◽  
Vol 12 (5) ◽  
pp. 1531-1537
Author(s):  
Dr. Hina Kausar
Keyword(s):  
Criminal Law ◽  
Stock Exchange ◽  
White Collar ◽  
Business Environment ◽  
Small Scale ◽  
Internal Mechanism ◽  
The Impact ◽  
A Company ◽  
Personal Liability ◽  
Responsible Person

The present paper contributes to the understanding of impact of corporate scams and scandals and understanding the reason how these frauds and white-collar crimes impact the investors trust and business environment as a whole. When these scams occur the trust of investors break with each and every turnout. The impact of such corporate scams is not limited to the company where it took place but to each and every business, be it big corporate units or it be some small-scale businesses by directly impacting the stock exchange where the shares are listed. The authors have also tried to focus upon the issues and problems faced by the investors of the company while the company got involved in corporate scams and to figure out the responsible person of the company who will be held accountable in such kind of cases. The present study is limited to the extent of personal liability of a Director and too specifically in the cases of fraud and insolvency. White collar crimes are everywhere these days and that need to be treated as a growing branch of the Criminal law in India. With increase in the Globalization companies are growing and along with it the stakeholders of the company are also growing, any scam done will step back the investors to invest again and more in the company. Thereby with increase in the market share of a company the director of the Company has to establish an internal mechanism to tackle various white -collar crimes nurtured and how these are dealt in the court of law.

The impact of qualified audit opinion on stock returns: an empirical study at Amman stock exchange

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rana Bayo Flees ◽  
Sulaiman Mouselli
Keyword(s):  
Stock Returns ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Market Model ◽  
Content Type ◽  
Going Concern ◽  
Study Approach ◽  
Audit Opinions ◽  
The Impact ◽  
First Time

Purpose This paper aims to investigate the impact of qualified audit opinions on the returns of stocks listed at Amman Stock Exchange (ASE) after the introduction of the recent amendments by the International Auditing and Assurance Standard Board (IAASB) on audits reporting and conclusions. It further investigates if results differ between first time qualified and sequenced qualifications, and between plain qualified opinion and qualifications with going concern. Design/methodology/approach Audit opinions’ announcements and stock returns data are collected from companies’ annual reports for the fiscal years 2016 to 2019 while stock returns are computed from stock closing prices published at ASE website. The authors apply the event study approach and use the market model to calculate normal returns. Cumulative abnormal returns (CARs) and average abnormal returns (AARs) are computed for all qualified audit opinions’ announcements. Findings The empirical evidence suggests that investors at ASE do not react to qualified audit opinions announcements. That is, the authors find an insignificant impact of qualified audit opinion announcements on stock returns using both CAR and AAR estimates. The results are robust to first time and sequenced qualifications, and for qualifications with going concern. Results are also robust to the use of risk adjusted market model. Research limitations/implications The insignificant impact of qualified audit opinions on stock returns have two potential conflicting research implications. First, the new amendments introduced to auditors’ report made them more informative and reduce the negative signals contained in the qualified opinions. That is, investors are now aware of the real causes of qualifications and not overreacting to the qualified opinion. Second, the documented insignificant impact confirms that ASE is not a semi-strong form efficient. Practical implications The apparent excessive use of qualifications should ring the bell on whether auditors misuse their power or companies are really in trouble. Hence, the Jordanian regulatory bodies need to warn auditors against the excessive use of qualifications on the one hand, and to raise the awareness of investors on the implications of auditors’ opinions on the other hand. Originality/value This study is innovative in twofold. First, it explores the impact of qualified audit opinions on stock returns after the introduction of new amendments by IAASB at ASE. In addition, it uses event study approach and distinguishes between first time qualified and sequenced qualifications, and between plain qualified opinion and qualifications with going concern. The results are consistent with efficient market theory and behavioral finance explanations.

“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.

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.

scholarly journals Long-Term Effects of Expiration of Derivatives on Indian Spot Volatility

2013 ◽  
Vol 2013 ◽  
pp. 1-6 ◽  
Author(s):  
Sunita Narang ◽  
Madhu Vij
Keyword(s):  
Stock Exchange ◽  
Volume Effect ◽  
Indian Market ◽  
Long Term Effects ◽  
Daily Data ◽  
Asymmetric Garch ◽  
Regression Techniques ◽  
The Impact ◽  
Spot Volatility

This paper examines the impact of expiration of derivatives on spot volatility of Indian capital market. The review of the literature shows that the previous Indian studies have covered a period of only 4–6 years after the introduction of derivative trading in India in 2000. They are unanimous about volume effect but not about return and volatility effect. This paper uses regression techniques and one symmetric and three asymmetric GARCH models, namely, TGARCH, EGARCH, and PGARCH, to evaluate the impact. It uses daily data on popular index S&P CNX Nifty of National Stock Exchange of India, during a period of more than a decade from June 12, 2000 to January 10, 2012. Findings of the study show that spot returns, volume, and volatility are high on expiration day and they build up further on the day after expiry which shows that the Indian market is weakly efficient. The expiration effect is mainly due to concentration of volumes in near-month contracts and absence of physical settlement.

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