The impact of interim earnings announcements on the permanent price effects of trades on the Helsinki stock exchange

Vieru, Markku

doi:10.1016/s1042-444x(01)00025-1

Cited by 10 publications

(8 citation statements)

References 19 publications

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“…Therefore, earnings announcement phenomenon is present irrespective of their size. Moreover, CARs for the three categories conform to the results of earlier studies that small companies yield higher abnormal returns due to higher informational asymmetry [14,15]. Table 4 and Figure 3 show the abnormal price behavior pattern of the three categories.…”

Section: Small Medium and Largesupporting

confidence: 83%

“…However, there is a significant impact of firm size over this specific behavior where the stocks of relatively small firms show large, positive abnormal returns around earnings announcement dates due to information asymmetry, and large firms do not show significant impact in returns around these dates [13]. This clearly suggests more information asymmetry during preannouncement period as compared to postannouncement period, which is associated more with small firms exposed to lesser market monitoring and most of the information about them is revealed through their official disclosures [14,15].…”

Section: Literature Reviewmentioning

confidence: 99%

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Stock Prices’ Variability around Earnings Announcement Dates at Karachi Stock Exchange

Qureshi

Abdullah

Imdadullah

2012

Economics Research International

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The purpose of this study is to investigate how earnings announcement event affects stock returns at Karachi Stock Exchange (KSE). For this purpose we use the KSE-100 Index as our sample. We use the CAR Analysis to analyze the impact of earnings announcement over the stock returns around announcement dates. Our results suggest that KSE experiences abnormal stock returns around earnings announcement dates for the overall market and for different categories which indicate that efficient market hypothesis does not hold in Pakistani market and point out the presence of informational dissemination inefficiencies in the market.

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Section: Small Medium and Largesupporting

confidence: 83%

Section: Literature Reviewmentioning

confidence: 99%

Stock Prices’ Variability around Earnings Announcement Dates at Karachi Stock Exchange

Qureshi

Abdullah

Imdadullah

2012

Economics Research International

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“…No evidence of a decline in the information content around quarterly earnings announcements is found as measured by both abnormal trading volume and return volatility (Landsman and Maydew, 2002), and price reaction to earnings announcements has increased over time (Buchheit and Kohlbeck, 2002). Price adjustments to information content concerning security valuations are present in “highly favorable” quarterly earnings reports (Joy et al , 1977) and information content of interim earnings announcements differ between small and large investors and that small trader regard earnings announcements as more informative than large traders (Vieru, 2002). Market reactions to earnings announcements have increased over the period, and the informativeness of earnings announcements is not battered by analyst reports (Ball and Shivakumar, 2008; Francis et al , 2002).…”

Section: Literature Review and Theoretical Frameworkmentioning

confidence: 99%

Earnings announcements, stock price reaction and market efficiency – the case of Saudi Arabia

Syed

Bajwa

2018

IMEFM

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Purpose-This study aims to find the response by stock market against the announcements of quarterly earnings is empirically tested by exploiting event study methodology. Efficient market hypothesis (EMH) on Saudi stock exchange is also tried on. Design/methodology/approach-The market model is applied to help gauge the expected returns and to illustrate abnormal returns around the event date. Findings-The results established that Saudi Stock Market does not bear semi-strong form of EMH. How efficient is the Saudi market is also reflected through evidence of significant abnormal returns and postearnings announcement drift around earning announcements dates. Research limitations/implications-The authors have not used analysts' forecast as the expected earnings which are the limitation. As mentioned earlier, the authors used the quarterly earnings of the previous year as a proxy and that proxy could have been replaced by analysts' forecast. Another limitation is that the trading volume in the event window is not considered. Practical implications-The behavior of Saudi capital market is of much concern, and the study of this with a perspective of EMH is the significance of this paper. Social implications-All stakeholders closely watch earnings announcements and its share price movement around the announcement date. Recently, Saudi Arabia has opened its doors to foreign investors, and big foreign investors are going to enter into Saudi capital market, and after their entry, the behavior of market could be different. In the authors' opinion, this is the right time to study the efficiency of Saudi market before the entry of foreign investors. Originality/value-This study is based on the gap created by EMH of Saudi market using event methodology, observed in the existing literature, and it will be a contribution to literature.

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“…Nofsinger (2001) shows that institutions buy and sell on both good and bad news, while individual investors only trade on good news. On the other hand, in Finland, Booth, Kallunki and Martikainen (1997) and Vieru (2002) find that small traders increase their sell orders after negative earnings news. Vieru (2002) shows that on the HSE individual large trades (especially uptick trades) produce greater permanent price effects before an announcement than after it.…”

Section: Investors’ Information Usage Trading and Hypothesesmentioning

confidence: 99%

“…On the other hand, in Finland, Booth, Kallunki and Martikainen (1997) and Vieru (2002) find that small traders increase their sell orders after negative earnings news. Vieru (2002) shows that on the HSE individual large trades (especially uptick trades) produce greater permanent price effects before an announcement than after it. The finding is in line with that of Daley, Hughes and Rayburn (1995) in the US market.…”

Section: Investors’ Information Usage Trading and Hypothesesmentioning

confidence: 99%

How Investors Trade Around Interim Earnings Announcements

Vieru¹,

Perttunen²,

Schadewitz

2006

Business Fin & Account

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This study focuses on non-institutional trading behaviour around interim earnings announcements in the emerging market. We separate the stock trading activity of Finnish households into five trading classes and compare the results to institutional trading. Data covering the years 1996-2000 shows that earnings news triggers trading in every trading class. We also find some evidence that actively trading individuals especially (compared to passively trading ones) show increased buying and selling activity before the event compared to the non-event period. After the event we find that Finnish households in the most active investor class tend to follow a contrarian strategy, especially selling after good news. This adds to previous evidence by Grinblatt and Keloharju (2000b) . Furthermore, the performance of the active investor classes is superior to that of passive ones. Finally, the institutional trading class is clearly less affected by the announcement than the active investor classes, suggesting that institutions utilize a broader information set than individual investors. Copyright Blackwell Publishers Ltd, 2006.

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The impact of interim earnings announcements on the permanent price effects of trades on the Helsinki stock exchange

Cited by 10 publications

References 19 publications

Stock Prices’ Variability around Earnings Announcement Dates at Karachi Stock Exchange

Stock Prices’ Variability around Earnings Announcement Dates at Karachi Stock Exchange

Earnings announcements, stock price reaction and market efficiency – the case of Saudi Arabia

How Investors Trade Around Interim Earnings Announcements

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