IDEAS home Printed from https://ideas.repec.org/a/wun/journl/tjev05y2012i17a07.html
   My bibliography  Save this article

Evolution of Shares Market Price During the Company’s Financial Results Announcement. Event Study Approach

Author

Listed:
  • Marianna BOTIKA

    (Department of Finance, The Bucharest Academy of Economic Studies, Romania)

Abstract

The research paper studied the evolution of shares market price during the company’s financial result announcement. The research is based on event study methodology. The author paid careful attention to data selection, correct methodology approach and results’ interpretation. 18 listed companies were taken to be studied. The companies had to respect two of next tree conditions: to have a public trade history for at least the past four years, to be a 1st category company, or to represents at least 1% from BET-C (composite index of the Bucharest Stock Exchange). All 18 companies strictly respected at least two conditions. The case study window was a new challenge. In order to get a correct output the author must ensure that there are no other events which can influence the analyzed data. Optimal window length was established for 21 day: 10 days before, event day, and 10 days after it. The research output was quite predictable: the announcement of financial results does not bring shocking behavior for shares’ market price. Abnormal registered returns have relatively small values. The risk which can be associated with this event is about 1.5%. The overall market behavior may be viewed as semi-strong efficient behavior. The paper was oriented towards testing the operational functionality of the Romanian capital market which is proved to be in very good condition and bring the strong evidence of market semi-strong efficiency. The author contributes with a new research regarding the Romanian market efficiency using the event study approach.

Suggested Citation

  • Marianna BOTIKA, 2012. "Evolution of Shares Market Price During the Company’s Financial Results Announcement. Event Study Approach," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 5(17), pages 96-118.
    • Handle: RePEc:wun:journl:tje:v05:y2012:i17:a07
    as

    Download full text from publisher

    File URL: https://tje.uvt.ro/index.php/tje/article/download/134/pdf
    Download Restriction: no
    File URL: https://tje.uvt.ro/index.php/tje/article/view/134
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    event study; financial report; average return; abnormal return; cumulate abnormal return;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wun:journl:tje:v05:y2012:i17:a07. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Romeo Margea (email available below). General contact details of provider: https://edirc.repec.org/data/feuvtro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.