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Australian Evidence Regarding the Value-Relevance of Technical Information

Author

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  • Jenni L. Bettman

    (School of Finance and Applied Statistics, College of Business and Economics, Australian National University, Canberra, ACT 0200.)

Abstract

This paper employs an unconstrained version of Ohlson's (1995) residual income valuation model to evaluate the value-relevance of technical information in Australia. Specifically, we employ the methodology of Bettman, Sault and Welch (2006) to investigate whether models that incorporate both fundamental and technical measures are superior to models that consider either fundamental or technical information in isolation. Preliminary testing confirms the positive dependence of contemporaneous price with the fundamental factors commonly employed in modelling, namely book value per share, earnings per share and consensus earnings forecasts. Supplementation of fundamental models with three technical variables sees all technical factors being significant in explaining contemporaneous share prices, consistent with US evidence provided by Bettman, Sault and Welch (2006). Overall, our results provide further evidence that augmenting fundamental valuation models with technical information yields models with greater explanatory power than those that only consider fundamental or technical information in isolation.

Suggested Citation

  • Jenni L. Bettman, 2007. "Australian Evidence Regarding the Value-Relevance of Technical Information," Australian Journal of Management, Australian School of Business, vol. 32(1), pages 57-71, June.
    • Handle: RePEc:sae:ausman:v:32:y:2007:i:1:p:57-71
    DOI: 10.1177/031289620703200104
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    References listed on IDEAS

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    2. Kai-Wei (Shaun) Siau & Stephen J. Sault & Geoffrey J. Warren & Henk Berkman, 2015. "Are imputation credits capitalised into stock prices?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 55(1), pages 241-277, March.

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