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The announcement effect of bond and equity issues: evidence from Chile

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  • Augusto Castillo

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Abstract

This paper analyzes the impact of security offering announcements on stock prices for a sample of 172 issues of securities in the Chilean financial market, during the 1993-2002 period. We found that the authorization of bond issues given by the SVS (Superintendencia de Valores y Seguros) produced no significant abnormal returns, and that the authorization of equity issues given by the SVS produced a significant and negative abnormal return. We also found that the magnitude of the negative abnormal return was directly related to the relative size of the equity issue.

Suggested Citation

  • Augusto Castillo, 2004. "The announcement effect of bond and equity issues: evidence from Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 31(2 Year 20), pages 177-205, December.
  • Handle: RePEc:udc:esteco:v:31:y:2004:i:2:p:177-205
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    File URL: http://www.econ.uchile.cl/uploads/publicacion/e315f37f-37c5-4dc0-940c-5b5855fd0f82.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rodrigo Saens & Eduardo Sandoval, 2005. "Measuring Security Price Performance Using Chilean Daily Stock Returns: The Event Study Method," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 42(126), pages 307-328.

    More about this item

    Keywords

    Equity and bond issues; event studies.;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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