scholarly journals Investor Sentiment and Cross-Sectional Return after Share Issuance: Evidence from Seasonal Equity Offering in China Market

2020 ◽  
Vol 4 (1) ◽  
pp. 42
Author(s):  
Di Liu
Keyword(s):  
Institutional Investors ◽  
Stock Price ◽  
Abnormal Return ◽  
Investor Sentiment ◽  
Equity Financing ◽  
Cross Sectional ◽  
Controlling Shareholders ◽  
Private Placement ◽  
Positive Abnormal Return ◽  
Timing Hypothesis

Our research on private placement of equity on China capital market reveals that firms prefer to equity financing when their stock price is overvalued and investor sentiment is high, following the market timing hypothesis. However, after private issuance, we document a significant positive abnormal return within three years. We believe firms choose to polish their financial statement before the exit of institutional investors and controlling shareholders. Through manipulation of discretional accruals, firms improve the profitability and market valuation, and help institutional investors and controlling shareholders obtain the abnormal return after private placement of equity. Nevertheless, such manipulation cannot be sustained and will do harm to other investors in the long-term.

scholarly journals The Phenomenon of Dividend Announcement on Stock Abnormal Return (Case in ASEAN Countries)

2021 ◽  
Vol 12 (1) ◽  
pp. 1-18
Author(s):  
Ikka Tiaraintan Hariyanto ◽  
Werner Ria Murhadi
Keyword(s):  
Event Study ◽  
Capital Market ◽  
Policy Implication ◽  
Stock Price ◽  
Abnormal Return ◽  
Dividend Signaling ◽  
Positive Abnormal Return ◽  
Dividend Distribution ◽  
Asean Countries ◽  
Research Period

Research aims: to examine the existence of stock’s abnormal return after dividend announcement activity.Design/methodology/approach: event study with 1.330 samples of dividend announcement in ASEAN countries during 2018. The research period was 21 days around the dividend announcement’s date.Research findings: this analysis's results agreed with the dividend signaling theory hypotheses, where the increase, decrease, or constant dividends could be an informative aspect for investors. Theoritical contribution/originality: it was shown by the presence of a positive abnormal return between an increase and a constant dividend, while a negative abnormal return between decrease dividends.Practitioner/policy implication: in the ASEAN capital market, it could be concluded that the change of dividend nominal would signal the firm’s prospect.Research limitation/implication: this research used the earliest dividend announcement before revision. Suggestions for further research are to pay attention to announcements of changes in dividend distribution dates and nominal revision, whether they contain information for investors, which will affect stock price movements.

The Economic Worth of Product Placement in Prime-time Television Shows

2016 ◽  
Vol 58 (2) ◽  
pp. 253-275
Author(s):  
Genevieve Begy ◽  
Vishal Talwar
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Abnormal Return ◽  
Product Placement ◽  
Prime Time ◽  
Cumulative Abnormal Return ◽  
Cross Sectional ◽  
Television Shows ◽  
Economic Worth ◽  
Sectional Analysis

Product placement is fiercely being courted by firms as a consequence of the declining credibility of traditional broadcast advertising and the ‘30-second spot’. Very little research analysing its economic worth exists outside of the realm of film, however. This paper responds by applying a consistent measure of placement effectiveness to television through use of event analyses. It finds a mean cumulative abnormal return of 0. 79% in a sample of 264 placements from the 2011-12 prime-time season, confirming that product placement in television is positively and significantly associated with movement in firms' stock prices. Placement in a season premiere has significantly higher mean returns than in a non-pivotal episode, irrespective of whether the firm places the product in both episodes. A cross-sectional analysis of placement, episode and show factors suggests that the duration of placement and one-hour show length are positively associated with stock price movement. Placement in a show's debut season is adversely associated to worth.

scholarly journals Corporate Governance and Stock Price informativeness: Evidence from an Emerging Market

2020 ◽  
Vol 6 (2) ◽  
pp. 593-605
Author(s):  
Muhammad Shahid Rasheed ◽  
Shahzad Kouser
Keyword(s):  
Corporate Governance ◽  
Institutional Investors ◽  
Stock Price ◽  
Emerging Market ◽  
Investor Protection ◽  
Cash Flows ◽  
Governance Mechanism ◽  
Price Informativeness ◽  
Controlling Shareholders ◽  
Stock Price Informativeness

Emerging markets usually have weaker legal and governance environment. The weaker enforcement of investor protection laws leads to a poor information environment. Using data of all the listed non-financial firms from Pakistan stock exchange (PSX), we document the relationship between corporate governance variables and stock price informativeness. The results from two-stage least squares (2SLS) reveal that controlling shareholders in the form of block holding plays an effective role in improving informativeness. Due to the presence of these block ownership, the institutional investors remain largely short term investors and act passively. This behavior of institutional investors encourages managers to extract more cash flows leading to higher synchronicity. These findings suggest market regulators develop such a corporate governance mechanism that not only ensures investor protection but also advise firms to reduce information asymmetry by better disclosure and transparency. More specifically, in the Pakistani context, traditional corporate governance mechanisms through board room regulations may not improve informativeness, and regulators need to regulate the ownership regulations, including family ownership and controlling shareholders.

Institutional Investment Horizons and the Stock Performance of Private Equity Placements: Evidence from the Taiwanese Listed Firms

2014 ◽  
Vol 17 (02) ◽  
pp. 1450009 ◽  
Author(s):  
Lee-Young Cheng ◽  
Ming-Chang Wang ◽  
Kung-Chi Chen
Keyword(s):  
Institutional Investors ◽  
Stock Price ◽  
Private Equity ◽  
Abnormal Returns ◽  
Investment Horizon ◽  
Institutional Investment ◽  
Stock Performance ◽  
Listed Firms ◽  
Private Placement

This study examines how the investment horizon of the institutional shareholders of a firm affects the stock performance of private equity placements. The results show that firms with long-term institutional investors receive significantly positive abnormal returns around the offering announcement. Post-issue stock price underperformance is especially pronounced in firms held by short-term institutional investors. These findings suggest that private placement firms with long-term institutional investors acquire certification and monitoring-related benefits and thus reduce the information asymmetry and entrenchment costs between managers and external investors.

scholarly journals INVESTIGATING STOCK MARKET REACTION ON JAKARTA ISLAMIC INDEX (JII) ANNOUNCEMENT

2014 ◽  
Vol 4 (1) ◽  
pp. 77
Author(s):  
Nisful Laila ◽  
Mohammad Nasih
Keyword(s):  
Stock Market ◽  
Stock Price ◽  
Abnormal Return ◽  
Market Reaction ◽  
Stock Exchange ◽  
Stock Market Reaction ◽  
Before And After ◽  
Positive Abnormal Return ◽  
Adjusted Model ◽  
Exchange Data

The aim of this research is to investigate the stock market reaction from the event when Jakarta Islamic Index (JII) is announced. The indication of stock market reaction was shown by appearing abnormal return during the date when the emiten are in the list of JII, and also several days before and after the annaouncement day. The method of this research is called event studies. Data collected from daily stock price from Indonesian Stock Exchange data base. By using market adjusted model, it was found that 21 stocks from JII latest list, during 11 days observation shown significant abnormal return, at 5% significant level. The conclusion from this finding is that the information of JII announcement has important content that caused the abnormal return during and around the announcement day. Moreover the information is shown a positive signal for investor, so that caused positive abnormal return

Directors’ trades in UK rights issues: do firms sell overvalued new equity?

2019 ◽  
Vol 18 (1) ◽  
pp. 113-133
Author(s):  
Heba Ahmed Abbas Ali
Keyword(s):  
Insider Trading ◽  
Stock Price ◽  
Abnormal Returns ◽  
Seasoned Equity Offerings ◽  
Sign Test ◽  
Cross Sectional ◽  
Content Type ◽  
Long Run ◽  
Timing Hypothesis ◽  
Rights Issues

PurposeThis paper aims to examine the behavioral timing hypothesis in the context of UK rights issues by seeking to establish and investigate inter-relationships between directors’ trading around rights issues as a proxy for stock mis-valuation and post-issue stock price performance.Design/methodology/approachThe cumulative average abnormal returns, the buy and hold abnormal returns, the standardized residual cross-sectionalt-test and the generalized sign test techniques.FindingsThe directors do possess short-term timing ability as they can identify profitable trading situations by buying more often before stock outperformance and by selling more often before stock underperformance. In addition, directors trading prior to the rights offering is found to exert an influence on the long-run abnormal returns of the rights-issuing firm, which supports the story that mis-valuation and behavioral timing are empirical.Research limitations/implicationsOther types of seasoned equity offerings rather than rights issues should be included.Practical implicationsThe research provides a direct testing for the strong form of market efficiency hypothesis, which enables policymakers to take into account market reaction to directors’ trades and how it is affected by corporate events (e.g. rights issues) when addressing insider trading regulations.Originality/valueThis study extends available literature in the context of both developed and emerging equity markets to testing the behavioral timing hypothesis by testing the inter-relationships between directors’ trading around rights issues and post-issue short- and long-run performance. To the best of the author’s knowledge, this is the first study that examines these inter-relationships in the UK context.

The Effects of Share Repurchase Announcements on Returns in the Malaysia Stock Market

2018 ◽  
Vol 1 (1) ◽  
pp. 1 ◽  
Author(s):  
Tze San Ong ◽  
Pei San Ng
Keyword(s):  
Stock Market ◽  
Abnormal Return ◽  
Small Firms ◽  
Abnormal Returns ◽  
Share Repurchase ◽  
Before And After ◽  
Positive Abnormal Return ◽  
Repurchase Announcements ◽  
Signaling Hypothesis ◽  
Firm Characteristic

This paper examines the market response surrounding the share repurchase announcements of Malaysia Listed Companies from years 2012 to 2016. One sample T-test was carried out to identify the abnormal return in the range before and after 20 days from share repurchase announcements. The result shows a significant positive abnormal return in the day of repurchase announcements and continuously until day 1 after the announcements. Multiple regression analysis was performed in order to identify the firm characteristic of share repurchase. The finding is supported with information asymmetric, which shows that stock market reacts more favorably through the repurchase announcements by small firms than large firms. This study is consistent with the signaling hypothesis that shows share repurchase announcement can be an effective tool in stabilizing the stock market in Malaysia. The finding of this study acts as a useful tool for managers and investors to improve their decisions on share repurchase announcements in Malaysia. Company’s managers can conduct share repurchase announcements that are able to make the stock market react positively in order to generate positive abnormal returns.

PENGARUH MANAJEMEN LABA TERHADAP ABNORMAL RETURN

2009 ◽  
Author(s):  
Zirman Zirman ◽  
Lily Lily
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Significant Influence ◽  
Stock Price ◽  
Abnormal Return ◽  
Real Earnings Management ◽  
Financial Statement ◽  
Discretionary Accrual ◽  
Stock Price Reaction ◽  
Flow Components

This research investigates the consequence of earnings management by analyzing stock price reaction to the full set financial statement in 2008 which can be used by investors to detect earnings management by the firms. This research investigated two forms of earnings management (accrual and real earnings management). The samples is drawn from firms in IDX Statistic 2008 which categorized as active in frequency, value or volume. The method of analysis of this research used multi regression. The results show (1) discretionary accrual had negative significant influence to abnormal return, (2) abnormal cash flow from operation had negative significant influence to abnormal return. The results implicate that the investors are aware of the accrual earnings management (discretionary accrual) and real earnings management (abnormal cash flow) components in the earnings reported by the firms and they react negative to this components.

Stock Price Jumps and Cross-Sectional Return Predictability

2013 ◽  
Vol 48 (5) ◽  
pp. 1519-1544 ◽  
Author(s):  
George J. Jiang ◽  
Tong Yao
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Stock Return ◽  
Return Predictability ◽  
Value Premium ◽  
The Other ◽  
Stock Return Predictability ◽  
Cross Sectional ◽  
Return Dynamics

AbstractWe identify large discontinuous changes, known as jumps, in daily stock prices and explore the role of jumps in cross-sectional stock return predictability. Our results show that small and illiquid stocks have higher jump returns to the extent that cross-sectional differences in jumps fully account for the size and illiquidity effects. Based on value-weighted portfolios, jumps also account for the value premium. On the other hand, jumps are not the cause of momentum or net share issue effects. The findings of our study shed new light on stock return dynamics and present challenges to conventional explanations of stock return predictability.

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