Rights Offering Announcements and the Efficiency of the Kuwaiti Market

Bader Alhashel ()
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Bader Alhashel: Kuwait University

No 2203849, Proceedings of Economics and Finance Conferences from International Institute of Social and Economic Sciences

Abstract: This study tested the semi-strong form of the Efficient Market Hypothesis in the Kuwait Stock Exchange (KSE). Previous studies examining the KSE have found conflicting evidence on whether it is weakly efficient. This test is conducted by examining the behavior of stock prices around the date of rights offering announcements to determine how long prices take to reflect the new information. Based on a sample of 69 rights offerings over the period 2004-2013 and using event study methodology, we find that prices incorporate new information within an average of 4 days. We take this observation as evidence that the Kuwaiti market is semi-strong efficient.

Keywords: Efficient Market Hypothesis; Semi-strong; Rights issues; Event study; Emerging market (search for similar items in EconPapers)
JEL-codes: G12 G14 G32 (search for similar items in EconPapers)
Pages: 1 page
Date: 2015-09
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Published in Proceedings of the Proceedings of the 4th Economics & Finance Conference, London, Sep 2015, pages 4-4

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iefpro:2203849

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