An Empirical Study on Market Reaction around the Bonus Issues Announcements in Bangladesh

Ahsan, Amirul; Chowdhury, Muhammed Ashadur Rahman; Sarkar, Md. Ahasan Habib

doi:10.5539/ijef.v6n1p82

Cited by 5 publications

(7 citation statements)

References 34 publications

(24 reference statements)

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“… Nikkinen et al (2006) , Cai et al (2009) , Gumus et al (2011) , Sorokina et al (2013) , Ghanem and Rosvall (2014) , Belgacem et al (2014), and Seda et al (2018) have studied the impact of macroeconomic news announcements on the stock markets. While Gichema (2007) , Mehndiratta and Gupta (2010) , Miglani (2011) , Rohit et al (2013) , Ogada and Kalunda (2017) , Ahsan et al (2014) , Patel and Prajapati (2014) , and Muthukamu and Rajamohan (2015) have studied the impact of dividend and bonus issue announcements on the share prices; Patro et al (2014) , Pandey and Jaiswal (2017) and Elad (2017) have studied the impact of devaluation, demonetization, and acquisition news on stock prices. Almost all the studies have found significant impacts of the events.…”

Section: Literature Reviewmentioning

confidence: 99%

Event study on the reaction of the developed and emerging stock markets to the 2019-nCoV outbreak

Pandey

Kumari

2021

International Review of Economics & Finance

161

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With a sample of 49 stock market indices of the developed and emerging markets in the world using the standard event methodology, this paper aims to examine the impacts of the 2019-nCoV outbreak on the global stock markets. Previous studies have supported that macroeconomic news and firm-specific news do impact the stock market returns. This study provides evidence for global stock market reactions to epidemics. The study concludes that the 2019-nCoV outbreak has significantly impacted the global stock markets with the Asian stock markets being hit the hardest. Further, the study also analyzed the impacts of lockdowns/restrictions imposed by the economies to contain the 2019-nCoV outbreak. This study evidences that early lockdowns/restrictions imposed by the nations have yielded positive results in containing the spread of the novel coronavirus, thus, rebuilding the investor's confidence and sharp reversal in the stock market returns. The statistical results establish a high and moderate negative correlation between the CARs and the cumulative cases and deaths both country-wise and that of the world indicating that the cross-country variation in the evolution of cases and fatality rates led to such stock market reactions impacting the market sentiments and anticipation for the future.

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Section: Literature Reviewmentioning

confidence: 99%

Event study on the reaction of the developed and emerging stock markets to the 2019-nCoV outbreak

Pandey

Kumari

2021

International Review of Economics & Finance

161

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“…AJAR 7,2 2.2 Impacts of bonus issue announcements Bharath and Shankar (2012) provide Indian evidence for the insignificant impact of bonus issue announcements on stock returns, examining the bonus announcements from 2001 to 2010 for companies in BSE500. Ahsan et al (2013) examined 136 bonus announcements in Bangladesh from 2009 to 2012 to find positive significant abnormal returns around the announcement date. Malhotra et al (2013) examined the volatility around bonus issue announcements and found evidence for increased volatility and persistence after bonus issue announcements.…”

Section: Literature Review and Hypothesis Formulationmentioning

confidence: 99%

“…Recent research also provides for a positive influence of these corporate actions. While Pan et al (2014) find positive impacts of dividend announcements, Ahsan et al (2013) find positive impacts of bonus announcements, Ogada (2014) finds positive impacts of rights issue announcements, Hua and Ramesh (2013) find positive impacts of stock-split announcements and Song and Walkling (2000), Campa and Hernando (2006), Diaw (2011), Chen et al (2020) find evidence for positive impact of mergers and acquisitions announcements on target firms and negative or zero impact on bidding firms.…”

Section: Introductionmentioning

confidence: 99%

“…While Pan et al. (2014) find positive impacts of dividend announcements, Ahsan et al. (2013) find positive impacts of bonus announcements, Ogada (2014) finds positive impacts of rights issue announcements, Hua and Ramesh (2013) find positive impacts of stock-split announcements and Song and Walkling (2000), Campa and Hernando (2006), Diaw (2011), Chen et al.…”

Section: Introductionmentioning

confidence: 99%

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Impacts of corporate announcements on stock returns during the global pandemic: evidence from the Indian stock market

Pandey

Kumari

Tiwari

2022

AJAR

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PurposeThe authors examine the impacts of corporate announcements on stock returns during the pandemic stress.Design/methodology/approachThe authors employ the event study methodology with the market model on a sample of 90 events (announcement and ex-date).FindingsThe authors find that all the corporate announcements do not impact the stock returns in a similar pattern. While the bonus announcement, ex-bonus and ex-split events led to positive significant abnormal returns on the event date, the rights issue and stock-split announcements failed to influence the stock returns. The findings suggest that before making such announcements, the corporates should wait until the market recovers because even the positively impacting events result in negative market responses during pandemic stress.Practical implicationsThis study will guide the policymakers to stimulate share prices during such pandemics with the help of various corporate announcements. The investors will be assisted in understanding the stock market mechanism and making wise decisions before reacting to corporate actions during a pandemic or emergency period. While the policymakers are concerned with influencing the share prices, the investors are concerned with the composition of the risk-return parameters in their portfolio. This study will act as an essential investment tool for both.Originality/valueTo the best of the authors’ knowledge, the authors conduct the first-ever study to examine the impacts of corporate announcements during a pandemic stress period that significantly contributes to the literature. The authors examine the announcement effects in India and accurately anticipate that this study will be a pioneer in this field. This study also paves the way for future researches in this area.

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“…The average abnormal return (AAR) on the event day was assessed to be 2.06%, indicating the semi-efficiency of the Information Technology sector of BSE to the BSA. Ahsan et al (2013) used the Sharpe's (1963) Single Index Model to examine how the Bangladesh stock market responded to the BSA between 2009 and 2012 using 136 sample companies from 6 industries listed on the Dhaka Stock Exchange (DSE). The whole sample's observation of a considerable price increase around the event date supports the signalling theory for the Bangladesh stock market.…”

Section: Literature Review 21 Literatures On Bsamentioning

confidence: 99%

An event study analysis of the impact of bonus share announcements on Nifty 100 and Nifty Midcap 100 companies

Mahato

2022

IJABF

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This study examines how the large-cap and mid-cap firms listed on the National Stock Exchange responded to bonus share announcements between January 1, 2006, to September 30, 2022. The conventional event study approach has been utilized, along with the commonly used market model assessment of predicted returns to analyze 45 pure events during this period consisting of 20 events of large-cap and 25 events of midcap stocks. According to the analysis, stock values significantly changed around the time of occurrence. Announcements of stock dividends typically increase stock prices. The mean of average abnormal return around the event for Nifty Midcap 100 indexed companies (0.2087) is higher than that for Nifty 100 indexed companies (0.1446), although the difference is insignificant. The study also shows that the cumulative average abnormal return for Nifty Midcap 100 indexed companies (6.472) is higher than that for Nifty 100 indexed companies (4.483) during the event period.

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An Empirical Study on Market Reaction around the Bonus Issues Announcements in Bangladesh

Cited by 5 publications

References 34 publications

Event study on the reaction of the developed and emerging stock markets to the 2019-nCoV outbreak

Event study on the reaction of the developed and emerging stock markets to the 2019-nCoV outbreak

Impacts of corporate announcements on stock returns during the global pandemic: evidence from the Indian stock market

An event study analysis of the impact of bonus share announcements on Nifty 100 and Nifty Midcap 100 companies

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