An Empirical Analasis of Market reaction Around the Bonus Issues in India
AbstractPast researches have revealed significant abnormal returns for bonus issues even though the bonus issue date is known in advance and the distribution contains no new information. This study examines the stock price reaction to the information content of bonus issues with a view of examining the Indian stock market is semi-strong efficient or not. The period of the study is June 1998 to August 2004. Samples of 46 bonus issues have been used to study the announcement effect by using event study methodology. The results indicate that there are significant positive abnormal returns for a five-day period prior to bonus announcement in line with evidence from developed stock market. On the announcement day the average abnormal return of -0.10% is observed. The results provide stronger evidence of semi-strong market efficiency of the Indian stock market.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 0505025.
Length: 29 pages
Date of creation: 31 May 2005
Date of revision:
Note: Type of Document - pdf; pages: 29
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Bonus Issues; India; stock market; abnormal returns; semi strong efficient; event study; cumulative abnormal return; Cowan Test; Standardized abnormal return;
Other versions of this item:
- Asim Mishra, 2005. "An Empirical Analysis of Market Reaction Around the Bonus Issues in India," Finance 0507003, EconWPA.
- G - Financial Economics
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