Announcements Effect of Corporate Bond Issuance on Stock Returns: Evidence from Chile

This study measures the announcement effect of corporate bond issuance on stock returns for companies listed on the Santiago de Chile Stock Exchange (BCS). The sample is made up of 29 firms and 87 corporate bond issuance announcements during the 2010-2017 period. The announcement effect of corporate bond issuance on stock return is measured by an event study. This methodology allows to calculate abnormal returns for the days of the event period. The results show that the average abnormal return on the day of the announcement is negative (between -0.09% and -0.03%), but it is not statistically significant. However, the average abnormal return on the day after the announcement is positive (between 0.27% and 0.32%) and has statistical significance. The significant and positive average abnormal return on the day after the announcement suggests a late market reaction. The study shows that there is a significant signaling effect of bond issuance announcements on stock returns.

Implicit Interpretation of Indonesian Export Bans on LME Nickel Prices: Evidence from the Announcement Effect

Forecasting of LME (London Metal Exchange) nickel prices remains an interesting topic but lacks consensus. This study aims to fill knowledge gaps by demonstrating the announcement effect of export bans by the Indonesian government. This article focuses on Indonesia because Indonesia produces more than 60% of global nickel ore. We identified the sequence of two episodes in which Indonesian export bans of nickel ore appeared to increase LME nickel prices through the Romer and Romer (1989) approach. The impact of the Indonesian export ban in 2014 is somewhat larger than that of 2019. The shock on the LME nickel market in 2014 was sustained for a while after the ban was implemented. We believe that this is the first export ban that has had unexpected effects within the market.

Discount, transparency and announcements effects of equity rights offerings: international evidence

Equity rights offerings and their respective announcement effects have been studied extensively in the literature. Our study expands upon these studies and focuses on those announcement effects and the relation between the discount of an equity rights offering and the announcement effect. Previous theoretical and empirical analyses show that firms can signal their quality via the discount in an equity rights offering and demonstrate a negative relation between the discount and the announcement effect. We argue that this link is only relevant in environments where signalling is possible and necessary. These are financial markets with a particularly low level of capital market transparency, i.e. high information asymmetry. We calculate announcement effects for an international sample of equity rights offerings and show that the negative effect of the discount on announcement effects can only be observed in environments with a low capital market transparency. Hence, our study estimates announcement effects across several different countries and is thus among the first to analyse signalling considerations for equity rights offerings in different transparency environments.

Research on the announcement effect of second equity offerings?——An quantitative analysis of Chinese infrastructure companies

Many issues have emerged currently regarding refinancing as a main financing source of Chinese listed companies. This study aims to identify key factors that influence the announcement effect of second equity offerings (SEOs) with 110 infrastructure companies listed on A-share stock market. By building a multivariate regression model, this study analyzed the influence factors from the perspective of the company’s fundamentals and the characteristics of refinancing, and found that the company’s fundamentals have same impact on the announcement effect. Return on equity, net profit margin and debt-to-equity ratio are all positively related to the accumulated abnormal return. The market pays more attention to the profitability when talking about SEOs. As to the characteristics of refinancing, the dilute ratio and the relative issuing scale have little impact on the announcement effect but the market does concern about the purpose of fund-raising.