The Market Response to Exploration, Resource and Reserve Announcements by Mining Companies: Australian Data
AbstractThis paper is the first to conduct an event study on the market response to exploration, resource and reserve announcements made by mining firms. Results from an event study using a matched firm approach that suggest that markets react positively to both the exploration and the resource announcements at the time of their release but find information value in the reserve announcements possibly because all of the information in these announcements have been anticipated by the market. In fact, there is evidence to suggest a high level of anticipation of all three types of announcements which should be a matter of concern for the regulators. The other major surprising finding in the study is that in every instance the market seems to have been overly enthusiastic about the announcements, as share prices turns down almost immediately afterwards and trends downward for an extended time. This leaves open the question as to why does the market get them so horribly wrong.
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Bibliographic InfoPaper provided by The Paul Woolley Centre for Capital Market Dysfunctionality, University of Technology, Sydney in its series Working Paper Series with number 7.
Date of creation: 01 Apr 2010
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Other versions of this item:
- Ron Bird & Matthew Grosse & Danny Yeung, 2013. "The market response to exploration, resource and reserve announcements by mining companies: Australian data," Australian Journal of Management, Australian School of Business, vol. 38(2), pages 311-331, August.
- NEP-ALL-2010-05-08 (All new papers)
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- Kiran Thapa, 2013. "Stock Message Board Recommendations and Share Trading Activity," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 10, June.
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