Bonus Share Issues and Announcement Effect: Australian Evidence

Balachandran, Balasingham; Tanner, Sally

doi:10.2139/ssrn.288743

Cited by 6 publications

(12 citation statements)

References 14 publications

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“…For instance, Barnes and Ma (2002) in their study of stock price behaviour to bonus share issue announcement and approvals, the investigation window has been defined to be 20 days before the day of the announcement, the day of the announcement and 20 days after the day of the announcement (that is, an investigation window of 41 days). Consistent with Barnes and Ma (2002), similar studies conducted by Balachandran and Tanner (2001), Mishra (2005) and Akbar and Baig (2010) use the same length of investigation windows.…”

Section: (C) Investigation Windowsupporting

confidence: 65%

“…Accordingly, responses to an event might not be fully on the event day itself so that the period over which the market participants will response to an event is not limited to the event day itself (that is, the day of the bonus issue announcement). Consistent with this view, the empirical studies conducted by Lonie, Abeyratna, Power and Sinclair (1996), Balachandran and Tanner (2001), Barnes and Ma (2002), and many other studies in both developed and emerging stock markets have used an event window consisting of three days, the announcement day of the bonus share issue (t = 0), and one day preceding (t and succeeding the announcement day (t = +1).…”

Section: Event Windowmentioning

confidence: 91%

“…(b), responses to an event might not be fully on the event day itself due to time gaps in communication of the event through different news media. Considering these facts and consisting with the empirical studies conducted by Lonie, Abeyratna, Power and Sinclair (1996), Balachandran and Tanner (2001), Barnes and Ma (2002), and many other studies in both developedand emerging stock markets, a narrow period of three days -announcement day of the bonus share issue (t = 0), and one day preceding (t = -1) and succeeding the announcement day (t = + 1) is specified as the event window.…”

Section: Event Windowmentioning

confidence: 99%

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Empirical Study on Semi-Strong Form Market Efficiency: Evidence from Colombo Stock Exchange

Shantha¹

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CHAPTER ONE-INTRODUCTION 1 1.1. Background of the Study 1 .1.1. Controversial results of the previous empirical studies on Efficient Market Hypothesis 1.1.2. Research Gap! 1.1.3. The controversy in the bonus share issues by Sri Lankan companies 1.1.4. Research Gap II 1.1.5. Methodological bias on test of market efficiency 1.1.6. Research Gap III 1.2. Research Problem 1.3. Objectives of the Study 1.4. About the Sri Lankan Stock Market 1.5. Research Methodology 1.5.1. Data 1.5.2. Research Methodology 1.6. Significance of the Study 11 1.7. Limitations of the Study 12 1.8. Organization of Chapters of the Report 14 1.9. Chapter Summary 14 CHAPTER TWO-REVIEW OF LITERATURE 16 2.1. Theoretical Concepts of Efficient Market Hypothesis 16 2.2. Concept of Informational Efficiency of Capital Markets 17 2.2.1. Definitions for Informational Efficiency 18 2.2.2. Characteristics and conditions of an informationally 20 efficient capital market 2.2.3. Different aspects of informational efficiency 22 2.3. Empirical Evidence on the Informational Efficiency of Capital 24 Markets 2.3.1. Tests of Weak form of Market Efficiency 25 2.3.2. Tests of Semi-strong form of Market Efficiency 28 2.3.2.1. Semi-strong form market efficiency in 28 developed capital markets 2.3.2.2. Semi-strong form market efficiency in 31 emerging capital markets 2.3.2.3. Research Gap I 2.3.3. Tests of Strong form of Market Efficiency 2.3.4. Challenges to Efficient Market Hypothesis 2.3.4.1. Positive/ negative serial correlation in returns 2.3.4.2. Violation of variance bounds 2.3.4.3. Noise trading 2.3.4.4. Market anomalies 2.4. Information Content of Bonus Issue Announcements 2.4.1. Theoretical aspects of bonus share issues 2.4.2. Motives for bonus share issues 2.4.3. Empirical evidence on the nature of the information conveyed by the bonus share issues 2.4.4. Bonus share issues in the Sri Lankan context 49 2.4.4.1. Legal Background 49 2.4.4.2. Current status of bonus share issues 51 2.4.4.3. Research Gap II 52 2.5. Event Study Methodology 53 2.5.1. Defining the event, event window and investigation 54 window 2.5.2. Selection of expected return estimation models 58 2.5.2.1. The Capital Asset Pricing Model (CAPM) 60 Lii 2.5.2.2. The Three-factor Model of Fama and French (1993) 2.5.2.3. The Mean-Adjusted Returns Model 2.5.2.4. The Market-Adjusted Return Model 2.5.2.5. The Market Model 2.5.2.6. Research Gap III 2.5.3. Data and Measurement of Return 2.5.3.1. Statistical issues of daily data and appropriate procedures to minimize the issues 2.5.3.2. Measurement of return 71 2.5,4. Descriptive analysis of daily return 2.6. Chapter Summary CHAPTER THREE-DATA AND METHODOLOGY 75 3.1. Data 75 3.2. Population and Sample of the Study 75 3.3. Measurement of Daily Return 3.4. Event Study Methodology 3.4.1. The event, event window, investigation window and 80 estimation window 3.4.2. Selection of expected return estimation models 81 3.4.3. Estimation of expected return 82 3.4.4. Measurement of abnormal returns 87 3.4.4.1. Average Abnormal Returns (AARs) 87 3.4.4.2. Cumulative Av...

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Section: (C) Investigation Windowsupporting

confidence: 65%

Section: Event Windowmentioning

confidence: 91%

Section: Event Windowmentioning

confidence: 99%

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Empirical Study on Semi-Strong Form Market Efficiency: Evidence from Colombo Stock Exchange

Shantha¹

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“…Kebijakan saham bonus erat kaitannya dengan teori keagenan karena ketika terjadinya suatu hubungan agency, akan cenderung menyebabkan timbulnya biaya agency. Biaya agency adalah biaya yang dikeluarkan emiten sebagai upaya untuk mempertahankan keefektifan hubungan agency (Balachandran et al, 2001). Salah satu dari upaya tersebut adalah menawarkan bonus kepada investor dalam bentuk saham dan bonus kepada manajer dalam bentuk insentif untuk meningkatkan kinerja perusahaan.…”

Section: Pendahuluanunclassified

Pengaruh Return On Equity dan Leverage Pada Saham Bonus di Perusaaan yang Terdaftar di Bursa Efek Indonesia

Dana

Krisnadewi

2017

InFestasi

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<em>This study aimed to determine the effect of return on equity (ROE) and leverage of the bonus shares in companies listed on the Stock Exchange in 2000-2015. The total samples that used ware 33 observations based on saturated samples method. The analysis technique used multiple linear regression analysis. The results showed ROE does not had an effect on bonus shares that means the company's decision to publish bonus shares does not depend on the size of ROE, leverage had a positive effect on bonus shares that shows if the company’s risk increased, so the possibility of the company to publish bonus shares will higher than cash dividends in the future.</em>

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“…Similar observations were also made by Rao (1994). Balachandran and Tanner (2001) examined share price reaction to announcement of bonus share issues of Australian companies, using daily return for the period from January 1992 to December 2000. Price reaction to bonus issue announcements from the day of the announcements to the day after the announcements (day 0 to day 1) is statistically significant and shows positive average of 2.37% for uncontaminated events and 2.11% for contaminated events employing the market model.…”

Section: Bonus Sharesmentioning

confidence: 99%

Market Reaction to Bonus Announcements:Empirical Evidence from Bombay Stock Exchange

Rohit¹,

Pinto²,

Bolar³

2013

ajmr

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Bonus Share Issues and Announcement Effect: Australian Evidence

Cited by 6 publications

References 14 publications

Empirical Study on Semi-Strong Form Market Efficiency: Evidence from Colombo Stock Exchange

Empirical Study on Semi-Strong Form Market Efficiency: Evidence from Colombo Stock Exchange

Pengaruh Return On Equity dan Leverage Pada Saham Bonus di Perusaaan yang Terdaftar di Bursa Efek Indonesia

Market Reaction to Bonus Announcements:Empirical Evidence from Bombay Stock Exchange

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