The reaction of investors to earnings announcements on the Johannesburg Stock Exchange
Date
2016
Authors
Onsongo, Anne Kwamboka
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The efficient market hypothesis (EMH) has been a subject of interest since the 1950s
and 1960s. The EMH is centred on information efficiency, that is all public and private
information is immediately reflected in the market prices.
In the African context, it is argued that some of the stock exchanges are weak form
efficient because of impairment in information flow. This research analyses the
information efficiency of the Johannesburg Stock Exchange by investigating the
impact of earnings surprise on investors. The research further examines the presence
of post-earnings announcement drift. Earnings announcements for firms ranked as
being in top 500 in their sector and industry are included in the study. Using event
studies, the empirical results illustrate that earnings surprise have an impact on
investors; however, these are influenced by external factors.
Description
MBA
Keywords
Johannesburg Stock Exchange. Stocks -- Prices -- South Africa. Efficient market theory.