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The Effects of Rights-Offering Announcements on Market Reaction in Saudi Arabia

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  • Heba Gazzaz

Abstract

This study investigates the impact of rights issue announcements on the market reaction in Saudi Arabia when the rationale behind the issuance is an investment opportunity or debt payment. The event study was applied using market and capital asset pricing models (MM and CAPM) to a sample of 65 Saudi-listed companies that made rights issue announcements between January 1, 2013, and December 31, 2023. The findings suggest that a firm's rights issue announcement negatively impacts the market reaction when the rationale is debt payment. The price during the first trading date was notably lower than that during the eligible date. Finally, rights-offering activities occurred during the COVID-19 pandemic to help firms meet their obligations. Â JEL classification numbers: G12, G14, G40.

Suggested Citation

  • Heba Gazzaz, 2025. "The Effects of Rights-Offering Announcements on Market Reaction in Saudi Arabia," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 15(3), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:15:y:2025:i:3:f:15_3_1
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    More about this item

    Keywords

    Right Issue; Investment Opportunity; Debt Payment; CAPM.;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General

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