The valuation effects of hotel mergers

This study aims to evaluate the merger effect of hotel mergers between 1981 and 2019 and assess which theoretical framework mergers in the lodging industry would conform. Previously, no work has been done about the nature of hotel mergers using the combined return, while this lack of thoroughness in assessing the motivation of those mergers has triggered different interpretations. The design of this study follows the traditional framework of an event study by assessing various types of cumulative abnormal returns around the announcement date. The key finding of this study suggests that the nature of hotel mergers strongly supports the synergy hypothesis. In order to explore the causal inferences of this result by bidder and target, an additional analysis was conducted by regressing the cumulative abnormal returns on accounting measures as well as merger- and hotel industry–specific variables. This panel data analysis showed that in a merger where both the bidder and target are affected, the amount of total debt, being engaged in the casino business, and whether the merger was involving a stock swap sent out positive signals to the market, whereby longer duration and higher deal value lifted the undervalued target. JEL Classifications: G34 (Mergers; Restructuring; Corporate Governance)

Rest in Peace Post-Earnings Announcement Drift

This paper revisits price formation following earnings announcements. In modern financial markets, stock prices fully reflect earnings surprises on the announcement date, leading to the disappearance of post-earnings announcement drifts (PEAD). For large stocks, PEAD have been non-existent since 2006 but has only disappeared recently for microcap stocks. PEAD remain a prevalent area of study in finance and accounting despite having largely disappeared. This paper concludes with a set of recommendations for researchers who conduct such studies to better assess the existence of PEAD and suggests future research avenues to examine price formation following earnings news.

Reaksi Pasar Atas Pengumuman Anugerah Program Penilaian Peringkat Kinerja Perusahaan dalam Pengelolaan Lingkungan Hidup

This study aims to examine the market's reaction to information regarding the announcement of a company performance rating assessment program award in environmental management. Market reaction is measured by abnormal return around the announcement date of the environmental management program. This research is conducted at the Indonesia Stock Exchange. The population in this study are all publicly listed companies receiving PROPER awards listed on the IDX in 2018 for a total of 51 companies. Samples that met the purposive sampling criteria are 50 companies. The analysis technique used is one sample t-test and independent samples t-test. The results of this study indicate that there is a market reaction around the PROPER rating announcement date, and there is no different market reaction between companies with good ratings and companies with bad ratings. Keywords: Event Study; Abnormal Return; PROPER.

Do stock splits matter for returns, volatility, and liquidity?

The purpose of this study is to investigate the impact of stock splits on the return, riskiness, and liquidity of stocks. Utilizing a sample of 94 stock splits taken place between 2010 and 2019 at Borsa Istanbul, the study analyzes the daily abnormal returns, change in volatility, and changes in volume around the stock split announcement and execution dates. The results display significant positive abnormal returns around the announcement date but not significant abnormal returns around the execution. The volatility and liquidity of stocks increase significantly around both announcement and execution dates. The findings are in line with the positive signaling, and liquidity hypotheses of stock split and with most of the observations reported in the empirical literature. The new evidence provided points out the lack of semi-strong form of market efficiency at Borsa Istanbul as far as the stock splits are considered.

Value Creation of Real Estate Company Spin-off Property Service Company Listing

The paper took 12 groups of parent companies and subsidiaries as the samples, in which the property service companies, spun from the real estate companies, have successfully on the capital market. The research showed that the average abnormal return (AAR) of real estate companies’ stocks was positive on the first announcement date of possible spin-off listing, while the cumulative average abnormal return (CAAR) remained positive for 21 days during the (–11, 9) days around the first announcement of possible spin-off and listing. Further, the changes in operating performance of real estate companies and property service companies were analysed after the successful spin-off for 3 consecutive years, compared with the year before the spin-off and listing. The results showed that after the spin-off and listing, real estate companies and property service companies have greatly improved their performance. Therefore, the fact that real estate companies spun off property service companies created positive values for shareholders.

Exploiting the dividend month premium: evidence from Germany

Dividend payments are firm events on a recurring and predictable basis. High returns in the period between announcement-date and ex-dividend date are the main driver for the so-called dividend month premium, which are positive abnormal returns in months in which corporations are predicted to issue dividend payments. In our empirical analysis of the German stock market, we find a robust dividend month premium, which is particularly high for stocks with positive dividend surprise. Knowing the dates of dividend announcements and payments enable portfolio managers to exploit the dividend month premium. Also taking into account tracking error and transaction costs, we show that simple portfolio-enhancing strategies lead to highly significant abnormal returns.

Releasing Earnings when the Audit is Less Complete: Implications for Audit Quality and the Auditor/Client Relationship

This study examines the effect of audit completeness at the annual earnings announcement date on audit quality and auditor/client retention decisions. The vast majority of companies now release earnings before the year-end audit is complete while, historically, companies would release earnings on or after the date of audit completion. Management's decision to release earnings when the audit is less complete can adversely impact audit quality and has negative implications for the overall auditor/client dynamic. We find that audits that are less complete at the earnings announcement date are associated with a higher likelihood of financial statement misstatements in audit areas that are typically performed towards the end of audit fieldwork. We also find a higher likelihood of auditor turnover during the following year. Taken together, the results suggest lower financial reporting/audit quality and higher auditor turnover for companies that release earnings when the audit is less complete.

Analysts’ forecasts between last consensus and earning announcement date

Purpose Thomson financial database reports a monthly consensus measure of analysts’ forecasts in the third week of every month, and firms’ earnings announcement dates are usually different from the last consensus calculation date. Thus, there is a gap between the last consensus calculation date and the earnings announcement date of firms. This study aims to address the question: “Do analysts issue forecasts that are slightly higher than the consensus number to increase the accuracy of their forecasts?” Design/methodology/approach This study is based on a sample of 91,172 quarterly earnings forecasts of various firms from 1990 to 2007 made between the last consensus calculation date and quarterly earnings announcement date. Descriptive statistics and statistical tests were used to analyze the data. Findings The findings propose that contrary to expectation, analysts’ forecasts between the last consensus calculation date and earnings announcement date are smaller than the consensus number. Also, the forecasts made between the last consensus and earnings announcement date is not as informative as forecasts made at other times as they could merely reflect the analysts’ herding behavior resulting from their career concerns. Originality/value This study provides a link between the literature that studies firms’ meet or beat analysts’ earnings phenomenon and analysts’ forecast decision-making context. This study also provides useful implications for the literature on the information content of analysts’ forecasts.

Social media as the platform for political mobilization: case study of Kazakhstan

This paper focuses on the role of social media in the rise of the protest movements and political mobilization in Kazakhstan. The country has been seeing an increase in the social networks based civil activists since recently. I argue that the emergence of the Democratic Choice of Kazakhstan that operates only within the realm of social media platforms promoted political activism and civil protests in the country. Most importantly, I argue that in contrast to the conclusions of the Kazakhstani court’s decision in March 2018, the movement leader’s Facebook blog reveals no violence either towards the government or some specific political elite. Using text mining methods, I analyzed the texts of his Facebook posts from the announcement date in 2017 till the end of 2019: the rhetoric of the position of the Democratic Choice is informational, first, and protest calling, second. Also, the analysis of seven most popular political Youtube bloggers shows that the people’s discontent with injustices and undemocratic polity manifested in the poignant interest towards the creator of this system, Mr. Nazarbayev and his closest circle. The SMM software allowed to find out the areas of Kazakhstani politics that are of most interest to the audience of Kazakhstani political activists.

Is Indonesia Stock Exchange Semi-Strong Form Efficiency?

This study aims to analyze the effect of the announcement of warrant listing on the stock price movement on the Indonesia Stock Exchange (IDX). The data used in this study is secondary data on companies that warrant listing from 2011 to 2018. The number of samples used is 10 with a purposive sampling technique. The analysis technique used in this study is the study of events, by using ten windows before and after the warrant listing. To prove the hypothesis proposed by conducting a t-statistic test. Based on the results of the analysis it was found that there were significant differences an abnormal returns and cumulative abnormal returns before and after the announcement date of the warrant listing on the Indonesia Stock Exchange, and it could be indicated that the Indonesia Stock Exchange was called the semi-strong form efficiency.