Market Reactions to the Hong Kong Trading Suspensions: Mandatory versus Voluntary
Abstract
This paper investigates the market reactions to regulator-initiated (mandatory) suspension and issuer-initiated (voluntary) suspension on the Stock Exchange of Hong Kong. It is found that there is substantial devaluation of the stocks during either suspension, and both the variance and trading volume are higher in the post-suspension period than in the pre-suspension period. However, the changes in value and variance are sensitive to the reason for the suspension. The evidence shows that mandatory suspensions are more effective than voluntary suspensions in disseminating information, although both suspensions may not effectively ease unusual volatility immediately. Copyright Blackwell Publishers Ltd 1998.Download Info
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Bibliographic Info
Article provided by Wiley Blackwell in its journal Journal of Business Finance & Accounting.
Volume (Year): 25 (1998-04)
Issue (Month): 3&4 ()
Pages: 419-437
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Peter-Jan Engelen & Rezaul Kabir, 2006.
"Empirical Evidence on the Role of Trading Suspensions in Disseminating New Information to the Capital Market,"
Journal of Business Finance & Accounting,
Wiley Blackwell, vol. 33(7-8), pages 1142-1167.
- Engelen, P.J. & Kabir, M.R., 2001. "Empirical Evidence on the Role of Trading Suspensions in Disseminating New Information to the Capital Market," Discussion Paper 2001-92, Tilburg University, Center for Economic Research.
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