MARKET REACTION TO EARNINGS ANNOUNCEMENTS AT NAIROBI SECURITIES EXCHANGE

Elijah Kihooto Maringa (), Dr. Riro G.k () and Dr. David Kiarie ()

International Journal of Economics, 2018, vol. 3, issue 1, 71 - 89

Abstract: Purpose: The study comprised of earnings announcements and how they influence share prices at NSE. Methodology: Event study methodology was followed over a five year period from 2012 to 2016. A census was carried out where 57 companies qualified to examination over the period through positivism approach. Average abnormal returns were tested for significance at 95% confidence level. Results: The results indicated that NSE was efficient in semi-strong form for year 2012, 2013, 2014 and 2016 except for year 2015 where the market was found to be inefficient with regard to earnings announcements. Unique contribution to theory, practice and policy: Earnings announcements are a statutory requirement. This calls on suggestions on how efficiency can be improved in the market to attract more investors. This can be done through improvement on existing policies to try and improve efficiency.

Keywords: Abnormal returns; efficient market hypothesis; Event study; Semi-strong form (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:bdu:ijecon:v:3:y:2018:i:1:p:71-89:id:703

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