Australian Evidence Regarding the Value-Relevance of Technical Information

Jenni L. Bettman
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Jenni L. Bettman: School of Finance and Applied Statistics, College of Business and Economics, Australian National University, Canberra, ACT 0200.

Australian Journal of Management, 2007, vol. 32, issue 1, 57-71

Abstract: This paper employs an unconstrained version of Ohlson's (1995) residual income valuation model to evaluate the value-relevance of technical information in Australia. Specifically, we employ the methodology of Bettman, Sault and Welch (2006) to investigate whether models that incorporate both fundamental and technical measures are superior to models that consider either fundamental or technical information in isolation. Preliminary testing confirms the positive dependence of contemporaneous price with the fundamental factors commonly employed in modelling, namely book value per share, earnings per share and consensus earnings forecasts. Supplementation of fundamental models with three technical variables sees all technical factors being significant in explaining contemporaneous share prices, consistent with US evidence provided by Bettman, Sault and Welch (2006). Overall, our results provide further evidence that augmenting fundamental valuation models with technical information yields models with greater explanatory power than those that only consider fundamental or technical information in isolation.

Keywords: EQUITY VALUATION MODELS; FUNDAMENTAL INFORMATION; TECHNICAL INFORMATION (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:32:y:2007:i:1:p:57-71

DOI: 10.1177/031289620703200104

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