THE IMPACT OF DIFFERENT CORPORATE EVENT ANNOUNCEMENTS ON SHORT-RUN STOCK RETURNS; EVIDENCE FROM COLOMBO STOCK EXCHANGE
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Sri Lanka Technology Campus
Abstract
Publicly traded markets function as the base of our
economic system. Efficiently valued financial markets power
up national development according to Malkiel (2010). Market
effectiveness shows precise security assessment results. When
information travels rapidly into stock prices in an efficient
market it won't help investors earn more than the market or
find ways to get abnormal returns from what they already
know.
This paper examines the efficiency of the market in relation
to four prominent corporate events: We examine the
information event impact of stock dividend announcements
alongside bonus issues, rights issues, and stock splits under Sri
Lanka's conditions. A sample of 13 stock dividend and 9 bonus
issue releases formed the base data alongside 31 rights issue
and 29 stock split announcements. This research uses market
model event studies to track price reactions through Average
Abnormal Returns and Cumulative Average Abnormal
Returns calculations. The research discoveries question what
current market efficiency stories tell us.
Investors in Sri Lanka currently lack complete data about
stock price reactions to corporate news. Our study examines
market reactions to corporate event announcements in CSE
using 82 unique events across 14 economic zones between 2019
and 2021.
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THE IMPACT OF DIFFERENT CORPORATE EVENT ANNOUNCEMENTS ON SHORT-RUN STOCK RETURNS; EVIDENCE FROM COLOMBO STOCK EXCHANGE Lakshmika Abeyrathna Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka lakshmikamadusanka27@gmail.com Sandali Sudasinghe Faculty of Commerce and Management Studies University of Kelaniya Sri Lanka sandalis@kln.ac.lk