The study investigates the reaction of investors to annual earnings releases as reflected in the volume and price movements of common stocks during a recession. We provide an apparent example where investors did not react to firm-specific positive earnings announcements. Event methodology is employed, and the returns in an event window, defined conventionally as the day before to two days after a firm-specific public earnings announcement, are not abnormal. The volume of trade in the event window is not atypical either. The psychological impact on the investors was such that fear could not be alleviated by the good news and good financial results.

Abstract:Convenience sample survey was fi elded to the Macedonian individual stock market investors to fi nd out whether their investment behavior can be explained by some underlying factors grounded in the behavioral approach to the study of fi nancial markets. Descriptive statistics technique has been used to analyze the investors' attitude about the market's effi ciency and to test different theories of behavioral fi nance. The results have indicated that investors are not completely rational individuals as supposed by theories of traditional fi nance. Also in the theoretical framework of behavioral fi nance Macedonian investors use heuristics, or rules of thumb, when judging information and forming beliefs, but Macedonian investors do not behave as suggested within prospect theory and regret aversion.

The objective of the research is to investigate the impact of political events-name issue‖ on the Macedonian Stock Exchange (MSE). Structural changes in volatility of Macedonian capital market seems to be more a consequence of political changes, especially from the perspective of international politics and the association of the country into NATO and the European Union. The research analyzes the response of capital markets to political events. Such an event is the summit in Bucharest as the day D (03/04/2008) which certainly had an impact because of prolonged unresolved problem of the name imposed by Greece. Visa liberalization and the day of solving the status of candidate country for accession to the European Union will be discussed too. An event methodology is employed, and the results suggest that the market respond to all political events connected-name issue‖. The results also indicate that there is no difference between the means of abnormal returns before and after the event. Sensitivity of the Macedonian investor related to any information connected to the word "name" is enormous. The Macedonian investor belief is that if-name‖ issue would be solved, regardless of possible negative real economic flows stock exchange will increase. The paper provides information regarding the effects of solving this name issue on Macedonian investor, and his expectation on this issue. But even if it is solved, the global economic crises and difficult economic situation in Macedonia especially this situation will be temporary and due to low liquidity, foreigners may use local optimism to sell their shares.

The aim of this study is the empirical investigation of the long-run relations

No abstract