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    Information content impact of stock splits - a case of the Kenyan market

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    Full - text undergraduate research project (2.040Mb)
    Date
    2015-11
    Author
    Ikonya, Brown
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    Abstract
    Stock splits from their definition are seen as purely cosmetic events that is, they should have no effect on the returns of the shares in question. However, studies have found numerous stock market effects associated with this event. This paper examines the effects of this event for the Kenyan Stock market. This research employed the event study methodology by Fama, Fischer et al (1969) and Brown and Warner ( 1980) using the stock split announcements of seven NSE listed companies that occurred during the year 2006 to 2012 and contribute further evidence as to the efficiency characteristics of the Kenyan stock market. The abnormal returns that arise due to this event are calculated using the Market Model and the significance is tested using t-tests. The results oft- tests on the average abnormal return (AAR) indicated that abnormal returns were significantly different from zero which implied that there is an anomaly with regards to stock split announcements regarded as news by NSE investors. The study established that there is a relationship between stock split announcement and performance of share prices of listed companies in the Nairobi Securities Exchange (NSE) in Kenya.
    URI
    http://hdl.handle.net/11071/4432
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    • BBSF Research Projects (2016) [15]

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