Is there profit from bonus share announcements in Nairobi Securities Exchange?

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dc.creatorMboya, Josphat Kiweu
dc.creatorNdegwa, James N.
dc.date08/12/2013
dc.dateMon, 12 Aug 2013
dc.dateMon, 12 Aug 2013 11:48:52
dc.dateMonth: 7 Day: 25 Year: 2013
dc.dateMon, 12 Aug 2013 11:48:52
dc.date.accessioned2015-03-18T11:29:05Z
dc.date.available2015-03-18T11:29:05Z
dc.descriptionPublished on Research Journal of Finance and Accounting
dc.descriptionThe question of whether the announcement of issuance of bonus shares by quoted companies is news to stock market participants or it is anticipated by the market has been the subject of research. If the announcement is anticipated, then stock prices should not change drastically during the days surrounding the announcement date.This research employed the event study methodology by using the bonus announcements of eighteen NSE listed companies that occurred during the year 2005 to 2010. The t-test statistic was employed to test the significance of the average abnormal returns and cumulative average abnormal returns from zero. It is possible to profit from bonus share announcement when the abnormal or abnormal returns are significant from zero. The results of ttestson the average abnormal return (AAR) and the cumulative average abnormal return (CAAR) indicated that abnormal returns were significantly different from zero which implied that implied that there is an anomaly in the semi-strong form efficiency of the NSE with regards to bonus announcements as it is possible to profit from such announcements which is regarded as news by NSE investors.
dc.description.abstractThe question of whether the announcement of issuance of bonus shares by quoted companies is news to stock market participants or it is anticipated by the market has been the subject of research. If the announcement is anticipated, then stock prices should not change drastically during the days surrounding the announcement date.This research employed the event study methodology by using the bonus announcements of eighteen NSE listed companies that occurred during the year 2005 to 2010. The t-test statistic was employed to test the significance of the average abnormal returns and cumulative average abnormal returns from zero. It is possible to profit from bonus share announcement when the abnormal or abnormal returns are significant from zero. The results of ttestson the average abnormal return (AAR) and the cumulative average abnormal return (CAAR) indicated that abnormal returns were significantly different from zero which implied that implied that there is an anomaly in the semi-strong form efficiency of the NSE with regards to bonus announcements as it is possible to profit from such announcements which is regarded as news by NSE investors.
dc.formatNumber of Pages:10 p
dc.formatVolume Number:Vol.4,
dc.formatIssue No.:No.8, 2013
dc.identifier2222-1697
dc.identifier
dc.identifier.urihttp://hdl.handle.net/11071/3675
dc.languageeng
dc.publisherInternational Institute for Science, Technology and Education
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dc.subjectNSE listed companies
dc.subjectttests
dc.subjectNairobi Securities Exchange
dc.titleIs there profit from bonus share announcements in Nairobi Securities Exchange?
dc.typeArticle
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