IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

A Change Of Focus Stock Market Reclassification In The Uk

Listed author(s):
  • Bryan Mase


Registered author(s):

    This paper examines the impact of a change of focus by a firm, as signified by stock market reclassification. It distinguishes between sector reclassifications that are motivated by information specific to a particular firm, and those that result from sector redefinitions and reorganisations. The direction of the price effects following reclassification depends significantly upon this distinction. Moreover, for firm-specific reclassifications, the negative price effect is greater where the firm has been underperforming its sector, suggesting that investors may be sceptical about the motives underlying a change of focus. Furthermore, a stock’s return comovement with the FTSE All-Share Index may be affected by it being reclassified into a new sector. This change in return comovement is consistent with the allocation of stocks into categories, as discussed by Barberis and Shleifer (2003). Reclassification can induce common factors in the returns to stocks in an index without there being any change in these stocks’ fundamental cash flows.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Economics and Finance Section, School of Social Sciences, Brunel University in its series Public Policy Discussion Papers with number 03-23.

    in new window

    Length: 27 pages
    Date of creation: Nov 2003
    Handle: RePEc:bru:bruppp:03-23
    Contact details of provider: Postal:
    Brunel University, Uxbridge, Middlesex UB8 3PH, UK

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bru:bruppp:03-23. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John.Hunter)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.