Investor response to public news, sentiment and institutional trading in emerging markets: A review

Abstract

This paper reviews the literature on investor reaction and sentiment with respect to public information arrival in emerging markets and discusses the implications of the findings for the validity of theoretical models emphasizing public information arrival as the main mover of asset prices. We cover three types of public information news: monetary policy announcements, the International Monetary Fund (IMF) related news and other public and political news. In addition, we review the literature on sentiment and institutional trading in emerging markets. We summarize general findings and suggest some directions for further research.

Investors’ sentiment and US Islamic and conventional indexes nexus: A time–frequency analysis

“…Brzeszczyński, Gajdka and Kutan (2015) There is ample empirical evidence that devoted to the investors' sentiment and equity returns nexus without reaching a uniform consensus 4 . The major advantage of the wavelet methodology is that it can distinguish between short-term and long-term co-movement dynamics between sentiment and equity returns.…”

Do Overnight Returns Truly Measure Firm-Specific Investor Sentiment in the KOSPI Market?

“…They also showed that this effect is stronger for difficult-to-arbitrage firms-that is, small, young, highly volatile, or unprofitable firms. Baker, Wurgler, and Yuan (2012) [53] expanded this analysis to a global sample and found similar results, and Brzeszczynski, Gajdka, and Kutan (2015) [54], Chen and Lien (2017) [55], and Seok, Cho, and Ryu (2019a) [22] investigated the relationship between sentiment and news and found that investors react more strongly to good news when sentiment is high.…”

Investors Psychology: Mediator of CSR and Market Capitalization

“…Every research has absolutely limitation, it is the same in this study. It seems that it does not review from political and economic side in reviewing investors psychology, in fact it is known to have close correlation [25], it remembers that study of investors psychlogy is very important relating to company's share value.…”

“…Almost of investors reveal that financial information presented by company becomes the important consideration in investment decision making process [24]. Although investors behaviour of a company has differentiation, it is especially investors behaviour has state differences because of the existence of cultural differences [25]. Like stated by Chang & Lin [4] who emphasizes that "investor behaviour is dominated by national cultural differences, recent literature on national cultural investigations is needed for empirical analysis".…”