SHARE PRICE REACTION TO CASH DIVIDEND ANNOUNCEMENT: AN EVENT STUDY OF LISTED FIRMS IN KENYA

2019 ◽  
Vol 9 (1) ◽  
pp. 119-127
Author(s):  
George Gikama Muthoni
Keyword(s):  
Event Study ◽  
Descriptive Analysis ◽  
Joint Effect ◽  
Share Price ◽  
Future Research ◽  
Cash Dividend ◽  
Listed Firms ◽  
Price Reaction ◽  
Descriptive Research ◽  
Study Methodology

This study aimed to establish the effect of cash dividend announcement on share price reaction of the firms listed on the Nairobi Securities Exchange (NSE). This study used Event Study methodology with purely secondary drawn data from 24 firms listed on the NSE who meet the study threshold with an event window of eleven (11) days during the year 2008-2013. The study adopted the descriptive research design and sampling de-sign being purposive. STATA version SE12 was used to produce a descriptive analysis. The findings indicate that the share price reaction to dividend announcement is posi-tive for a dividend increase and negative for dividend decrease and constant for the constant dividend. The study therefore recommends that the effect of the dividend on the firm’s share price is very crucial for not only the literature but also for the regula-tion and supervision of the capital market and that further development of accounting standards, increased auditing skills, and advances in investor education will likely make dividends even more important in the future. Following these findings, it would be useful to also consider the following directions for future research on whether there is any joint effect of cash dividend, bonus issues, and right issues on the share price of firms listed on NSE.

scholarly journals What does the market say about say-on-pay? A look at the Canadian bank experience

2012 ◽  
Vol 1 (3) ◽  
pp. 142-155 ◽  
Author(s):  
Kim Trottier
Keyword(s):  
Executive Compensation ◽  
Event Study ◽  
Economic Benefits ◽  
Share Price ◽  
Price Reaction ◽  
Say On Pay ◽  
News Announcement ◽  
Study Methodology ◽  
Event Study Methodology

This paper explores the share price reaction to a recent news announcement that Canadian banks were adopting say-on-pay, a policy that gives shareholders an annual non-binding vote on executive compensation. Using event study methodology, the effect of adopting this new policy is explored and found to be associated with a significant increase in share price. This result suggests that giving shareholders a voice on executive compensation is expected to generate economic benefits, which adds to the paucity of knowledge currently available to shareholders and legislators as they consider the consequences of say-on-pay.

scholarly journals Does national sporting performance affect stock market returns in South Africa?

2013 ◽  
Vol 6 (1) ◽  
pp. 67-82 ◽  
Author(s):  
Ferdi Botha ◽  
Carl De Beer
Keyword(s):  
South Africa ◽  
Stock Returns ◽  
South African ◽  
Descriptive Analysis ◽  
Share Price ◽  
Future Research ◽  
Market Returns ◽  
Stock Market Returns ◽  
Study Methodology ◽  
Sporting Performance

This study explores whether South African national sporting performance can influence investors in such a way that it has the ability to impact on market returns. Using standard event study methodology, this study determines the constant mean return using the daily All-Share price index on the JSE for the period of 1 January 1990 to 31 December 2010. This study focuses on three of South Africa’s most popular sports, namely soccer, cricket and rugby, and examines if these three sports have the ability to influence market returns. Although there is some evidence of a relationship between stock returns and sporting performance in the descriptive analysis, the regression results indicate that sporting performance in South Africa does not significantly explain abnormal market returns on the JSE. The study provides a number of possible reasons for this finding and concludes by suggesting areas for future research.

scholarly journals Impact of Smoking Ban Fatwa on Indonesian Tobacco’s Company

2013 ◽  
Vol 2 (2) ◽  
pp. 76-86
Author(s):  
Gatot Soepriyanto ◽  
Paulina Santoso
Keyword(s):  
Event Study ◽  
Abnormal Returns ◽  
Tobacco Consumption ◽  
Share Price ◽  
Market Model ◽  
Smoking Ban ◽  
Muslim Population ◽  
Stock Market Return ◽  
Study Methodology ◽  
Event Study Methodology

The objective of this study is to assess the share price reactions to smoking ban fatwa on Indonesia tobacco’s company. We expect that the smoking ban fatwa in the world’s largest Muslim population will hit the tobaccos industry revenues, lower tobacco’s company profit and eventually affect the share price of those firms. We use event study methodology and standard market model to calculate abnormal returns of the tobacco’s firms related to the news of smoking ban fatwa. Our study failed to find a statistically significant effect of smoking ban fatwa on tobacco’s firm stock market return. It suggests that the investors do not see the fatwa as a factor that may control the tobacco consumption in Indonesia – thus it may not affect the tobacco’s firm revenues and profit in the future

Stock market reaction to cash dividends: evidence from the Nigerian stock market

2019 ◽  
Vol 45 (3) ◽  
pp. 366-380
Author(s):  
Friday Kennedy Ozo ◽  
Thankom Gopinath Arun
Keyword(s):  
Stock Market ◽  
Event Study ◽  
Stock Price ◽  
Abnormal Returns ◽  
Cash Dividend ◽  
Content Type ◽  
Price Reaction ◽  
Stock Market Reaction ◽  
Dividend Announcements ◽  
Stock Price Reaction

PurposeVery little is known about the effect of dividend announcements on stock prices in Nigeria, despite the country’s unique institutional environment. The purpose of this paper is, therefore, to provide empirical evidence on this issue by investigating the stock price reaction to cash dividends by companies listed on the Nigerian Stock Exchange.Design/methodology/approachStandard event study methodology, using the market model, is employed to determine the abnormal returns surrounding the cash dividend announcement date. Abnormal returns are also calculated employing the market-adjusted return model as a robustness check and to test the sensitivity of the results toβestimation. The authors also examine the interaction between cash dividends and earnings by estimating a regression model where announcement abnormal returns are a function of both dividend changes and earnings changes relative to stock price.FindingsThe study find support for the signaling hypothesis: dividend increases are associated with positive stock price reaction, while dividend decreases are associated with negative stock price reaction. Companies that do not change their dividends experience insignificant positive abnormal returns. The results also suggest that both dividends and earnings are informative, but dividends contain information beyond that contained in earnings.Research limitations/implicationsThe sample for the study includes only cash dividend announcements occurring without other corporate events (such as interim dividends, stock splits, stock dividends, and mergers and acquisitions) during the event study period. The small firm-year observations may limit the validity of generalizations from these conclusions.Practical implicationsThe findings are useful to researchers, practitioners and investors interested in companies listed on the Nigerian stock market for their proper strategic decision making. In particular, the results can be used to encourage transparency and good governance practices in the Nigerian stock market.Originality/valueThis paper adds to the very limited research on the stock market reaction to cash dividend announcements in Nigeria; it is the first of its kind employing a unique cash dividends data.

scholarly journals The impact of new, renewal and termination sponsorship announcements on share price returns

2014 ◽  
Vol 15 (4) ◽  
pp. 10-25 ◽  
Author(s):  
Thomas S Kruger ◽  
Michael Goldman ◽  
Mike Ward
Keyword(s):  
Competitive Advantage ◽  
Event Study ◽  
Share Price ◽  
Sports Sponsorship ◽  
Study Methodology ◽  
The Impact ◽  
Event Study Methodology

What impact do sports sponsorship announcements have on the share price returns of sponsoring firms? This research examines the impact of new, renewal and termination sponsorship announcements on returns, employing event study methodology to analyse 118 announcements made by 19 firms over more than 11 years. The mixed findings across all three announcement types indicate the lack of consideration given to sponsorship investment by investors. The findings suggest that, although firms may position their sponsorships so that they contribute towards a competitive advantage, announcements of sports sponsorships are not always taken into account by the market.

Event study methodology in business research: a bibliometric analysis

2020 ◽  
Vol 120 (10) ◽  
pp. 1863-1900
Author(s):  
Qian Wang ◽  
Eric W.T. Ngai
Keyword(s):  
Bibliometric Analysis ◽  
Event Study ◽  
Intellectual Development ◽  
Future Research ◽  
Extensive Literature ◽  
Business Research ◽  
Primary Analysis ◽  
Content Type ◽  
Study Methodology ◽  
Event Study Methodology

PurposeThis study aims to provide an objective analysis of the state-of-the-art and intellectual development of publications related to event study methodology in business research.Design/methodology/approachThe sample includes 1,219 papers related to event study methodology, covering all business disciplines and spanning 34 years from 1983 to 2016.FindingsThrough three stages of primary analysis, namely, initial sample, citation and co-citation analyses, the authors identified the publication trends, supplementary techniques, influential publications and intellectual clusters in the area of event study methodology in business.Research limitations/implicationsThe findings serve as a benchmark for the extensive literature related to event study methodology in business and may facilitate the transference of the amassed useful techniques among disciplines and the identification of future research directions.Originality/valueThe current study represents as a pioneering effort to review event study-related publications using bibliometric analysis.

scholarly journals The Impact Of Forced Financial Restatements On The Share Prices Of JSE Listed Firms

2012 ◽  
Vol 11 (12) ◽  
pp. 1383
Author(s):  
Shaun Watson ◽  
Johan Coetzee
Keyword(s):  
Stock Exchange ◽  
Abnormal Returns ◽  
Share Price ◽  
Share Prices ◽  
Listed Firms ◽  
Price Reaction ◽  
Johannesburg Stock Exchange ◽  
Financial Restatements ◽  
Panel Review ◽  
The Impact

This study investigates the effect of forced financial restatements on the share prices listed on the Johannesburg Stock Exchange (JSE). An event study methodology is used to examine the share price reaction of 34 firms that forcefully restated their results following a GAAP Monitoring Panel review. The results indicate that the equity of 79.1 per cent of the firms decreased as a result of the restatement. The average standardised abnormal returns for 55.9 per cent of these firms were also found to be negative. The study further finds that the volume of shares traded directly following the announcement increased substantially, especially five days following the announcement. The study makes a contribution to the existing literature in that is the first of its kind to focus on the share price reaction of forced financial restatements on share prices in the South African context.

The Debtor’s Behavior in Microfinance Industry: An Exploratory Study of Measurement Scales

2020 ◽  
Vol 18 (2) ◽  
pp. 123-135
Author(s):  
Joko Susanto ◽  
Bayu Sindhu Raharja
Keyword(s):  
Risk Taking ◽  
Descriptive Analysis ◽  
Research Result ◽  
Future Research ◽  
Specific Information ◽  
Validity And Reliability ◽  
Measurement Scales ◽  
Practical Advantage ◽  
Descriptive Research ◽  
Insight Into

This study is an exploratory descriptive research that attempts to explore the measurement indicators of debtors’ behavior in microfinance industry. It employs as much of previous studies showed little attention in the relation of debtor's behaviour and non-performing loans. On the contrary, they spotlight more on the banking-specific information and macroeconomics factors. Therefore, this research tries to discover the debtor's behaviour which is assumed to have an impact on non-performing loans. The behaviours which employed and proposed are impulsiveness, risk-taking behaviour, and trustworthiness. This study aims to inquiry the measurement scales of proposed behaviours as well as test the validity and reliability of those indicators by employing exploratory factor analysis (EFA). The result shows that there are three indicators accepted being a measuring instrument of impulsiveness, two for risk-taking behaviour, and four signs for trustworthiness. It also examines in the descriptive analysis of the debtor's behaviour based on their socio-demographic criteria such as gender, age, marriage status, and wage. The research result would give an insight into both empirical and practical advantage in terms of microfinancing management. Theoretically, this paper serves a valid and reliable of debtors’ behavior measurement scales that would contribute for future research in testing the relation of such behavior variables to non-performing loans.

scholarly journals The Effectiveness of Trade for Trade Segment as a Surveillance Effort to Prevent Price Manipulation: Evidence from India

2016 ◽  
Vol 6 (1) ◽  
pp. 9
Author(s):  
Kanaiyalal Shantilal Parmar ◽  
Chakrapani Chaturvedula
Keyword(s):  
Stock Returns ◽  
Event Study ◽  
Abnormal Returns ◽  
Stock Exchanges ◽  
Price Reaction ◽  
Price Manipulation ◽  
Surveillance Activity ◽  
Study Methodology ◽  
The Impact ◽  
Event Study Methodology

Indian Stock Exchanges use trade for trade segment as part of surveillance activity to restrict the unwanted growth in prices to safeguard the interest of the investors. This paper studies the impact of the announcement to shift securities to trade for trade segment on stock returns and volatility of the stock returns using event study methodology. It was found that the securities have generated exorbitant positive average abnormal returns during 30 days in the pre event period, which led the exchanges to shift these stocks to trade for trade segment. The event is found to be significantly impacting average abnormal returns during 30 days in the post event period showing the negative price reaction. Also volatility of the stocks returns is found to be increasing post the announcement.

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