Event Study: The Influence Of Quarterly / Annual Reports On The Stock Performance Of Listed Real Estate Companies

Listed real estate companies, just like all other listed companies around the world, have to publish quarterly as well as annual reports, informing the public and especially the share and stake holders about the current development of the company. These reports are always awaited with great anticipation. Will there be bad news or good news in the report? And if there is bad news, is it as bad as suspected or better and vise versa are good financial news as good as everybody expected. Depending on this news, changes in the stock price are expected, as well as observed changes in stock price are often explained with an interpretation of the content of the reports. It is commonly expected and believed that bad news have a negative effect on the performance and vise versa with god news. As obvious as it seems, so difficult it is to proof, as god and bad is not an absolute definition but rather a relative one in the eye of the beholder. An interesting question arising from this is, if the publication of financial reports have an general impact, meaning ìalwaysî significantly positive or negative, basically regardless of the content. In order to verify whether the publication of these reports has an effect, an event study shall observe abnormal returns around the time of the publication. Further options are to test if relatively late / early publication has an effect ñ a problem here will be the definition of the ìnormalî time of publication ñ and if the timing within the week or the timing with regard to the period of the year have an influence. // ï The aim of this study is to find out whether a general effect (always positive or always negative) on stock performance can be observed caused by the publication of financial reports, although it is commonly expected to depend upon the content; ï Does it matter whether the reports are published relatively early or relatively late; ï Does timing matter with regard to day of the week or period of the year // On a scientific level, the contribution of this study lies in analyzing whether behavioral effects influence the stock performance of listed real estate companies. From a professional point of view, implications for an optimized investment strategy can be obtained as well as implications for the optimal information strategy of listed real estate companies with regard to their stock performance.