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Social and Behavioral Sciences Commons™
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Efficient Market Hypothesis (EMH); Semi-strong Form Efficiency; Event Study; Announcements of Proposal or Approval; Under-reaction and Overreaction.
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Full-Text Articles in Social and Behavioral Sciences
Market Efficiency Or Not? The Behaviour Of China’S Stock Prices In Response To The Announcement Of Bonus Issues, M. L. Barnes, S. Ma
Market Efficiency Or Not? The Behaviour Of China’S Stock Prices In Response To The Announcement Of Bonus Issues, M. L. Barnes, S. Ma
Faculty of Commerce - Papers (Archive)
Event study analysis is applied to investigate stock price reaction to the announcement of bonus issues for the emerging stock markets of China. Results show that the issues with a high bonus ratio (number of bonus shares in the issue/number of existing shares) usually attract positive returns and the issues with a low bonus ratio are rewarded with negative returns. The A-shares’ and B-shares’ prices exhibit some similarities in their reactions to bonus issues’ approvals. The hypothesis of semi-strong form market efficiency is rejected only partly for China’s stock markets.