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Investors' use of corporate reports in Bahrain

Listed author(s):
  • Jasim Al-Ajmi
Registered author(s):

    Purpose - The purpose of this paper is to report the results of an investigation into individual investors' perceptions of the factors affecting buying, holding and selling of stock on the Bahrain stock exchange (BSE). Additionally, the paper investigates the perceptions of individual investors about corporate financial statements as a source of information for individual investors' investment decisions and what specific information such investors would like firms to disclose in these reports. Design/methodology/approach - The research method involved a mail questionnaire sent to 800 individual investors. The response rate was 42.6 percent. This research method was complemented by a series of field interviews conducted with 20 investors and six stockbrokers for the purpose of gaining additional insights into the topic. Findings - The study found that individual investors perceived corporate financial statements as the most important source of information for their investment decisions. The results also show a relatively high degree of agreement within the groups (both large and small) as to the ranking in terms of the importance of the topics. Overall, the study found relatively high levels of consensus between the two user-groups with regards to the majority of questions investigated. The greatest difference between the user-groups regards the perception of the relative importance of the cash-flow statement, the income statement and which information items are needed for investors' decision making. Originality/value - The paper offers rich data on the perceptions and uses of financial and non-financial information by individual investors. This is the first time this type of research has been conducted in Bahrain.

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    Article provided by Emerald Group Publishing in its journal Managerial Auditing Journal.

    Volume (Year): 24 (2009)
    Issue (Month): 3 (March)
    Pages: 266-289

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    Handle: RePEc:eme:majpps:v:24:y:2009:i:3:p:266-289
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    1. Lam, Swee-Sum & Du, Jing, 2004. "Information asymmetry and estimation risk: Preliminary evidence from Chinese equity markets," Pacific-Basin Finance Journal, Elsevier, vol. 12(3), pages 311-331, June.
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    4. Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    5. Myers, Stewart C, 1984. " The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
    6. Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
    7. Al-Abdulqader, K.A. & Hannah, G. & Power, D.M., 2007. "The appraisal of ordinary shares by Saudi investors," Research in International Business and Finance, Elsevier, vol. 21(1), pages 69-86, January.
    8. Fama, Eugene F, 1991. " Efficient Capital Markets: II," Journal of Finance, American Finance Association, vol. 46(5), pages 1575-1617, December.
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