Impact of Dividend Announcements on Stock Prices of UK Firms Listed in London Stock Exchange

GIS Business ◽  
2018 ◽  
Vol 13 (4) ◽  
pp. 1-10
Author(s):  
Emeka Henry Alaeto
Keyword(s):  
Event Study ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
London Stock Exchange ◽  
Share Prices ◽  
Dividend Announcements ◽  
Study Methodology ◽  
Dividend Irrelevance ◽  
Event Study Methodology

The aim of this paper is to explore the possible relationship between dividend announcement and stock price reactions upon announcements by the quoted firms in London Stock Exchange (LSE). For the sake of this study, an event-study methodology was employed to calculate any abnormal or excess returns around dividend announcements for 100 firms listed in the LSE over a period of 5 years (2010-2014). The result of the event study indicates that dividend announcements do not convey information to investors (Khan, 2011). The researcher concludes by saying that dividend announcements do not convey any information to share prices, which is in consonance with the M-M Dividend Irrelevance Theory.

scholarly journals STOCK PRICE BEHAVIOR AROUND CUM-DIVIDEND DATE OF INDONESIA BLUE CHIPS STOCKS

2019 ◽  
Vol 2 (1) ◽  
pp. 49-60
Author(s):  
Eka Lavista
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Abnormal Return ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Index Model ◽  
Single Index Model ◽  
Study Methodology ◽  
Return Difference ◽  
Event Study Methodology

This study tests whether there are significant stock prices changes around the cum-dividend date. In particular, it examines the stock price movement of two days before and two days after the cum-dividend date. It uses an event study methodology. The population of this study are all companies in the LQ45 listed at Indonesia stock exchange for the year 2017 and the sample consists of 38 companies. Abnormal return is measured using the single index model. Results show that there are no significant abnormal returns around the cum-dividend date. In addition, there is no significant abnormal return difference between two days before and two days after the cum-dividend date. The implication of the reported findings is that investors may not obtain significant positive abnormal returns using a cum-dividend date as the trading strategy.

scholarly journals The Color of Government Money. Do Investors Differently Value the Investment of Sovereign Wealth Funds?

e-Finanse ◽  
2017 ◽  
Vol 13 (1) ◽  
pp. 25-34
Author(s):  
Dariusz Urban
Keyword(s):  
Event Study ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
London Stock Exchange ◽  
Sovereign Wealth Funds ◽  
Market Reactions ◽  
Cumulative Abnormal Returns ◽  
Study Methodology ◽  
Event Study Methodology

AbstractThe article aims at pointing out the differences in market reactions regarding the announcement of an investment of selected Sovereign Wealth Funds in companies listed on the London Stock Exchange. The research sample consists of 796 market transactions made by four selected Sovereign Wealth Funds. The author employed event study methodology to calculate the average abnormal returns and cumulative abnormal returns for each fund in subsamples. The empirical findings suggest that investors react differently to the information about a fund’s investment. To the best of the author’s knowledge, the literature does not provide any answer as to how the market reacts to information disclosure of individual funds. Therefore, this paper bridges the gap in the literature within this field.

scholarly journals The Effects of the 2010 Chilean Natural Disasters on the Stock Market

2020 ◽  
Vol 21 (1) ◽  
pp. 31 ◽  
Author(s):  
José Luis Ruiz ◽  
Marcelo Barrero
Keyword(s):  
Stock Market ◽  
Natural Disasters ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Insurance Coverage ◽  
Stock Market Volatility ◽  
Study Methodology ◽  
The Impact ◽  
Event Study Methodology

The 2010 Chilean earthquake and tsunami were among the strongest in the world history. The exogeneity of these natural disasters provides the opportunity to test stock price reactions. Using a sample of 42 firms listed in the Santiago Stock Exchange, we develop an event study methodology considering heterogeneity in volatility. Chilean stock market volatility increased by 240% (120%) during the 5 (11) trading days after the earthquake. The results are informative about the behavior of the stock prices: returns are positive in sectors the retail, real estate, and banking sectors and negative in food, steel, and forestry. Insurance coverage decreases the impact on economic growth.

scholarly journals Stock Price Reactions on NASDAQ Stock Exchange for Special Dividend Announcements

2019 ◽  
Vol 3 (6) ◽  
pp. 382-388 ◽  
Author(s):  
Arian Seyedimany
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Market Model ◽  
Signalling Theory ◽  
Dividend Announcements ◽  
Price Reactions ◽  
Stock Price Reactions ◽  
Dividend Irrelevance

Announcing dividend pay-out policy by a company will signals market firm’s future prospects and changes its stock prices according to dividend signalling theory. By analysis the effect of special dividend announcements for 5 companies listed in NASDAQ for the period of 2014-2018, this study investigates the stock price reactions to special dividend announcement for 40 days around the event and challenges dividend signalling theory. The empirical results calculated both in discrete and logarithmic forms. Only few disordered significant abnormal returns and average abnormal returns occurred according to the t-test. The results show that shareholders do not gain value from announcement of special dividend in NASDAQ stock exchange market. That Results indicated from adjusted market model in this research do not support dividend-signalling theory Hence do not confirm that the announcement of dividend has significant effect on price of shares. In general the results consistent with the Miller and Modigliani (1961) dividend irrelevance hypothesis.

Market reactions to the inclusion of people with disabilities

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Claudia Araceli Hernández González
Keyword(s):  
Event Study ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
People With Disabilities ◽  
Market Reactions ◽  
Content Type ◽  
Study Methodology ◽  
Research Advance ◽  
The Impact

PurposeThis study aims to provide evidence of market reactions to organizations' inclusion of people with disabilities. Cases from financial journals in 1989–2014 were used to analyze the impact of actions taken by organizations to include or discriminate people with disabilities in terms of the companies' stock prices.Design/methodology/approachThis research is conducted as an event study where the disclosure of information on an organization's actions toward people with disabilities is expected to impact the organization's stock price. The window of the event was set as (−1, +1) days. Stock prices were analyzed to detect abnormal returns during this period.FindingsResults support the hypotheses that investors value inclusion and reject discrimination. Furthermore, the impact of negative actions is immediate, whereas the impact of positive actions requires at least an additional day to influence the firm's stock price. Some differences among the categories were found; for instance, employment and customer events were significantly more important to a firm's stock price than philanthropic actions. It was observed that philanthropic events produce negative abnormal returns on average.Originality/valueThe event study methodology provides a different perspective to practices in organizations regarding people with disabilities. Moreover, the findings in this research advance the literature by highlighting that organizations should consider policies and practices that include people with disabilities.

Information Content of Dividends: Evidence from Istanbul

2010 ◽  
Vol 3 (3) ◽  
pp. 126 ◽  
Author(s):  
Ayse Altiok-Yilmaz ◽  
Elif Akben Selcuk
Keyword(s):  
Information Content ◽  
Event Study ◽  
Stock Exchange ◽  
Information Leakage ◽  
Istanbul Stock Exchange ◽  
Event Information ◽  
Study Methodology ◽  
Dividend Increases ◽  
Signaling Hypothesis ◽  
Event Study Methodology

This study investigates the market reaction to dividend change announcements at the Istanbul Stock Exchange. A sample of 184 announcements made by 46 companies during the period 2005 to 2008 is analyzed by using the event study methodology. The results suggest that the market reacts positively to dividend increases, negatively to dividend decreases and does not react when dividends are not changed, consistent with the signaling hypothesis. Also, the results show pre-event information leakage for the decreasing dividends sample.

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 Is the market swayed by press releases on corporate governance? Event study on the Eurostoxx banks

2018 ◽  
Vol 15 (3) ◽  
pp. 23-31 ◽  
Author(s):  
Marina Brogi ◽  
Valentina Lagasio
Keyword(s):  
Corporate Governance ◽  
Event Study ◽  
Stock Prices ◽  
Investment Decisions ◽  
Press Releases ◽  
European Banks ◽  
Study Methodology ◽  
The Impact ◽  
Governance Disclosure ◽  
Event Study Methodology

Are press releases on Corporate Governance price sensitive? What is the impact of Corporate Governance information on stock prices of banks? This paper addresses these questions by applying an event study methodology on 70 press releases published by the Euro area banks listed on the Eurostoxx banks Index, from 2007 to 2016. Systemic shocks are explored as well idiosyncratic ones. Our results show that investment decisions are significantly but negatively influenced by the disclosure of a press release on corporate governance as if this kind of news leads investors to perceive the banks’ prospects negatively. The best of our knowledge this is the first paper that investigates European banks press releases on corporate governance. Findings are relevant for banks’ management and their disclosure policy. Nonetheless, further research is needed to investigate differences and similarities between an area of governance disclosure and another.

scholarly journals Pengaruh NPM, ROA, ROE terhadap Harga Saham pada Perusahaan LQ45

2020 ◽  
Vol 30 (5) ◽  
pp. 1258
Author(s):  
Kannia Aulia Sahari ◽  
I Wayan Suartana
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Sampling Technique ◽  
Multiple Linear Regression Analysis ◽  
Fundamental Analysis ◽  
Share Prices ◽  
Research Population ◽  
Profitability Ratios

The purpose of this study is to determine the movement of stock prices, namely fundamental analysis where profitability ratios are often used in fundamental analysis, namely NPM, ROA and ROE This research was conducted on companies incorporated in the 2014-2018 LQ45 index on the Indonesia Stock Exchange. The research population is 68 companies. Samples were selected using a purposive sampling technique so that the number of samples obtained was 26 companies and the number of observations over 5 years was 130 observations. Data analysis techniques using multiple linear regression analysis. Based on the results of this analysis show that NPM and ROA have no effect on stock prices so that they are unable to increase share prices in companies incorporated in the LQ45 index, while ROE affects stock prices so the higher the ROE level the higher the stock prices at companies incorporated in the LQ45 index. Keywords: NPM; ROA; ROE; Stock Price.

scholarly journals South–South Cooperation in South and East Asia: An Event Study of the China–Pakistan Economic Corridor

2019 ◽  
Vol 21 (1) ◽  
pp. 54-67
Author(s):  
Wing Him Yeung ◽  
Yilisha Pang ◽  
Asad Aman
Keyword(s):  
Stock Market ◽  
East Asia ◽  
Event Study ◽  
Stock Exchange ◽  
Global South ◽  
Short Term ◽  
Empirical Results ◽  
Study Methodology ◽  
The Impact ◽  
Event Study Methodology

South–South cooperation has been on the rise in recent years. One of the latest examples is the China–Pakistan Economic Corridor (CPEC) proposed by the Chinese and Pakistani governments in 2013. Using event study methodology, this article examines the impact of events and announcements associated with CPEC on the Pakistan Stock Exchange in Pakistan and the Shanghai Stock Exchange in China. The first key finding of this article is that the initial announcement associated with CPEC had stronger and positive short-term impact on the Pakistan Stock Exchange in comparison with the impact of subsequent CPEC events on the stock market. The second key finding is that the short-term impact of the CPEC initial announcement was stronger on the Pakistan Stock Exchange than on the Shanghai Stock Exchange, possibly due to the substantial difference in the size of the two economies. The empirical results of this article have important implications for investors, corporations and regulators to the Global South.

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