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The Effect Of Interest Rate Changes On Bank Stocks, John Vaz, Mohamed Ariff, Robert Brooks
The Effect Of Interest Rate Changes On Bank Stocks, John Vaz, Mohamed Ariff, Robert Brooks
Mohamed Ariff
This study examines the effect of publicly announced changes in official interest rates on the stock returns of the major banks in Australia during the period from 1990 to 2005. Previous studies of such effects have reported inconclusive and mixed results. US evidence suggests that banking stocks are generally negatively (positively) impacted by increases (decreases) in official interest rates. We find, somewhat unexpectedly, that Australian bank stock returns are not negatively impacted by the announced increases in official interest rates. Furthermore, banks apparently experience net-positive abnormal returns when cash rates are increased, which is consistent with dividend valuation theory that …
Corporate Spin-Offs, Their Price Reactions And Determinants In Malaysia, Chung-Sin Yoon, Mohamed Ariff
Corporate Spin-Offs, Their Price Reactions And Determinants In Malaysia, Chung-Sin Yoon, Mohamed Ariff
Mohamed Ariff
Spin-off as a form of financial restructuring has been examined in the US and the UK but not in other markets. This is a first study outside those markets. The evidence from a sample of 85 spin-off cases in Malaysia reveals that both the parent and the spin-off company stocks gain significant positive abnormal returns: parent firms earn smaller value while the spin-off firm gains substantially, much greater than is documented in other markets. Examining the factors correlated with the size of the spin-off effect, we find the abnormal returns are positively correlated with market capitalization and negatively correlated with …