Stock Split Announcements Research Articles

Comparative Analysis Of Stock Prices, Stock Returns, And Stock Liquidity Before And After The Stock Split In Banking Companies Listed On The Idx In 2021-2023

This research seeks to compare stock prices, abnormal returns (as a proxy for stock returns), and trading volume activity (TVA) (as a proxy for liquidity levels) before and after a stock split. Utilizing an event study approach, observations were conducted on the average stock prices, abnormal returns, and TVA for five days before and five days after the stock split. Secondary data were employed with purposive sampling techniques. The data utilized in this study comprise the stock split announcement dates, which are treated as the event date (t+0), the daily closing stock prices of companies undergoing stock splits within the observation period, the daily traded share volume, the total shares outstanding, and the daily Composite Stock Price Index (IHSG). The sample consisted of three banking companies listed on the IDX that carried out stock splits between 2021 and 2023. The results reveal no significant differences in stock prices, abnormal returns, and TVA before and after the stock split.

The Information Content of Stock Splits: In the Context of Stock Splits Concurrently Announced with Earnings

This paper examines the market responses to concurrent earnings and stock split announcements for evidence on the information content of stock splits. The majority of stock split research excludes splits announced with other information events due to confounding issues. However, it is difficult to extract the information content of splits by merely focusing on the standalone split announcement because stock splits are devoid of any information regarding firms’ future cash flows. This study explicitly considers how a stock split is evaluated in conjunction with current earnings. This study shows that the market reacts more positively to earnings news concurrently announced with stock splits, consistent with the idea that splits are favorable news. Furthermore, this study finds that stock returns of concurrent split–earnings announcers exhibit a greater association with future cash flows, suggesting that investors should value stock splits favorably for more persistent earnings ahead.

Analysing the Likelihood of and Market Reaction to Reverse Stock Splits in India

The study analysed the factors that motivated Indian companies to pursue reverse stock splits strategy. The article also aimed at examining the market reaction around the announcement and effective dates of reverse stock splits. Analysing the reverse stock splits pursued by Indian companies during the period 2002–2022, it was found that poor growth opportunities in the past were the main reasons for Indian companies pursuing reverse stock splits. Further, reverse stock splits were chosen by the companies whose stocks were trading as penny stocks, in the pre-split period. Here, the motivation was to improve the image of their stocks amongst the institutional investors. Realizing these value-improving motives on part of the companies adopting reverse stock splits, the market participants reacted positively to the news of reverse stock splits on the announcement as well as the effective date. Thus, the study supported positive signalling theory and image improvement theory as the rationales for Indian companies pursuing reverse stock splits and the resultant positive market reaction.

REAKSI PASAR PADA AKSI KORPORASI STOCK SPLIT EMITEN DI BURSA EFEK INDONESIA

Stock split is one of the corporate activities used to increase stock liquidity. The content of information contained in the company's stock split corporate action still shows that the phenomenon related to the stock split shows inconsistent results. This study aims to obtain empirical evidence by analyzing abnormal returns and stock trading volume before and after the stock split announcement. The research was conducted on companies listed on the Indonesia Stock Exchange in 2021 with a data collection technique using the purposive sampling method and 8 companies were obtained. The data used is secondary data from the official website of the Indonesia Stock Exchange. The research data analysis tool used the Wilcoxon signed rank test with IBM SPSS version 27 through an even study approach with an observation period of 5 days before and 5 days after the stock split event. The results of this study indicate that there is a market reaction as evidenced by a significant difference between abnormal returns and stock trading volume before and after the stock split announcement.
 Keywords: Stock Split; Abnormal Return

PENGARUH STOCK SPLIT TERHADAP KINERJA SAHAM (STUDI PADA PERUSAHAAN YANG TERDAFTAR DI BEI TAHUN 2017 – 2021)

A stock split is an activity of splitting a number of outstanding shares of a company to make stocks more liquid so that they can increase transactions from market. The purpose of this study to determine that is any differences between return and trading volume before and after stock splitting. This study uses secondary data that accorded by Investing.com with a research period of 2017 – 2021. The population in this study are companies that performs stock split in the research year determined, that is 64 companies. The sample selection uses a purposive sampling method, so the sample from this research is 61 companies. The result of this study using the Wilcoxon signed rank test, the results is all sectors did not have an increase in stock returns and trading volume after stock splits because investors prioritized company fundamentals rather than stock split announcements. So for companies that want to do a stock split, should improve the company's fundamentals and pay attention to the economic conditions at that time first. This is because investors have other factors to consider in making transactions, one of which is fundamental factors and economic conditions.

주식분할 공시에 대한 장·단기 효과

Purpose - The purpose of this study is to re-examine the disclosure effect of stock splits and long-term performance after stock splits using stock split data over the past 10 years, and infer the motivation (signal or opportunism) of stock splits. In addition, we focus on exploring the determinants of the short- and long-term market response to stock splits.
 Design/methodology/approach - We measure the short-term market response to a stock split and the long-term stock performance after the stock split announcement using the event study method. We analyze whether there is a difference in the long-term and short-term market response to a stock split according to various company characteristics through univariate analysis and regression analysis.
 Findings - In the case of the entire sample, a statistically significant positive excess return is observed on the stock split announcement date, and the excess return during the 24-month holding period after the stock split do not show a difference from zero. In particular, the difference between short-term and long-term returns on stock splits is larger in companies with a large stock split ratio, small companies, large growth potential, and companies with a combination of financial events after a stock split.
 Research implications or Originality - The results of this study suggest that at least the signal hypothesis for a stock split does not hold in the Korean stock market. On the other hand, it suggests that there is a possibility that a stock split can be abused by the manager's opportunistic motive, and that this opportunism can be discriminated depending on the size of the stock split, corporate characteristics, and financing plan.

Reaksi Pasar atas Pengumuman Stock Split Sebelum dan Selama Pandemi COVID-19

The study aims to examine differences in abnormal returns and stock trading volumes before and after stock split announcements in the period before and during the COVID-19 pandemic. The number of samples in this study were 47 companies selected by purposive sampling techniques. Data collection uses nonpartisan observation methods by accessing www.idx.co.id and yahoofinance.com sites. The data was analyzed using the Wilcoxon Signed Rank Test. The results showed that there was no difference abnormal return before and after the stock split announcement in the period before the COVID-19 pandemic, there was no difference in abnormal return before and after the stock split announcement during the COVID-19 pandemic, there was a difference in stock trading volume before and after the stock split announcement in the period before the COVID-19 pandemic, there was a difference in stock trading volume before and after the stock split during the COVID-19 pandemic.
 Keywords: Stock Split; Abnormal Return; TVA; COVID-19 Pandemic

A Return and Trading Volume Activity Analysis on Before and After Stock Split Announcement

A Return and Trading Volume Activity Analysis on Before and After Stock Split Announcement

The Effect of Stock Splits on Liquidity: Evidence from China

Despite many theories that explain the stock split announcement by companies, it has been viewed and aimed differently by corporate managers, regulators and investors. Many studies suggest stock splits are often used to lower the price and bring it to an acceptable trading range. However, few studies focus on emerging economies like China. The present study employs a market model to estimate aberrant volumes. Cumulative abnormal volumes and buy-and-hold abnormal volume estimations were used in accordance with a long-term event study. It was found that after firms have gone for stock splits, their liquidity has increased. Thereby suggesting that there is a significant influence on the post-split liquidity as was found in case of the firm that have gone for stock splits listed on China’s Shanghai Stock Exchange during the select period. Also, a statistically significant upward trend was also observed following the split by the firms. Study findings can be useful to regulators, managers, and investors per their interests. This paper has a limitation of using market model. Future research could also increase the time period and the number of firms that this paper has analyzed.

The Market Reaction to Stock Split Announcement

This study aims to examine the market reaction to the stock split announcement. The market reaction in this research will be proxied with abnormalities that occur around the day of the stock split announcement. This study also examines the relationship between firm size and abnormal returns around the day of the stock split announcement. The population in this study are companies listed on Indonesia Stock Exchange that announced a stock split from 2012-2019. By using purposive sampling, the total sample used in this study was 72 companies. This study's results indicate an abnormal return around the day of the stock split announcement. This study also shows a negative but insignificant relationship between firm size and abnormal returns around the day of the stock split announcement.

EFFECT OF RIGHTS ISSUE, BONUS ISSUE AND STOCK SPLIT ANNOUNCEMENTS ON SHARE RETURNS OF FIRMS LISTED IN NAIROBI SECURITIES EXCHANGE

Purpose: The objective was to find out the effect of rights issue, bonus issue and stock split announcements on share returns of firms listed in Nairobi Securities Exchange.
 Materials and Methods: Event study research design was used in the study. Target population comprised all companies in the Nairobi Securities Exchange register that announced bonus issue, rights, and stock split from 2014 to 2020. There were 6 companies which announced rights issue, 17 companies which announced bonus issue and 2 companies which announced stock splits. The study employed event study methodology whereby collection of secondary data was done for 30 days before and after respectively for each bonus issue, rights issue and stock split announcement. Statistical bias was eliminated by using normality and autocorrelation tests there after the Mean Adjusted Return Model was used in determining expected returns and abnormal returns.
 Results: In all the companies there were abnormal returns which prove that the announcements had an effect on share returns, Sixteen companies witnessed increase in abnormal returns while nine firms witnessed decline in abnormal returns following the announcements. To whether the effects were significant null hypothesis postulating that the announcements had significant effect on share returns of firms listed in Nairobi Securities Exchange was accepted for twenty four firms and rejected for one firm. The conclusion was that right issue, bonus issue and stock splits announcements have a significant effect on Share returns.
 Unique contribution to theory, practice and policy: The study recommendations include that; the Nairobi Securities exchange should support research by providing data free of charge for interested researchers. The Capital Markets Authority and NSE should educate investors on the investment opportunities available and this will increase local investors in the bourse, currently most investors are foreigners. NSE and CMA should beef up surveillance in the market so as to curb insider trading especially when companies are about to make any form of corporate announcements.

Peran Trading Volume Activity Pada Pengaruh Pengumuman Stock Split dan Volatilitas Saham Terhadap Actual Return

The goal of this study is to discover how stock split announcements and stock volatility affect actual stock returns when trading volume activity (TVA) is used as an intermediary variable. All registered firms on the Indonesia Stock Exchange that implemented a stock split policy in the period of 2015 to 2020 were included in the experiment's population. The 33 samples of companies were obtained as samples in the study using the purposive sampling method. To evaluate the intervening factors, the hypothesis was examined using multiple linear regression models and path analysis. Stock splits and TVA had no effect on actual stock returns, but stock volatility did. Stock splits have a large beneficial effect on TVA, whereas stock volatility has little effect. The TVA cannot be used as a moderator in the relationship between stock split and volatility on actual return. Other variables, such as stock volatility and TVA, are purposed to be included by future researchers in order to better clarify the stock return variable as a whole.

Impact of Stock Split on Stock Prices in India

An efficient market is a market in which prices fully reflect all information. Efficiency ofthe market can be judged operationally and informational. The present study is focused on the informational efficiency of the Indian capital market. A capital market is said to be efficient with respect to corporate event announcement (stock split, buyback, bonus issue, right issue, merger and acquisition and dividend etc) contain information and its disseminations. How quickly and correctly the security prices reflect these event contained information shows the efficiency of the stock market. The present study is investigating the impact of stock split on share price in India. Essence of stock split announcement presented in the literature is that the announcement has a positive impact on the returns before and after the event. To examine the impact on stock prices, event study model has been used.

Impacts of corporate announcements on stock returns during the global pandemic: evidence from the Indian stock market

PurposeThe authors examine the impacts of corporate announcements on stock returns during the pandemic stress.Design/methodology/approachThe authors employ the event study methodology with the market model on a sample of 90 events (announcement and ex-date).FindingsThe authors find that all the corporate announcements do not impact the stock returns in a similar pattern. While the bonus announcement, ex-bonus and ex-split events led to positive significant abnormal returns on the event date, the rights issue and stock-split announcements failed to influence the stock returns. The findings suggest that before making such announcements, the corporates should wait until the market recovers because even the positively impacting events result in negative market responses during pandemic stress.Practical implicationsThis study will guide the policymakers to stimulate share prices during such pandemics with the help of various corporate announcements. The investors will be assisted in understanding the stock market mechanism and making wise decisions before reacting to corporate actions during a pandemic or emergency period. While the policymakers are concerned with influencing the share prices, the investors are concerned with the composition of the risk-return parameters in their portfolio. This study will act as an essential investment tool for both.Originality/valueTo the best of the authors’ knowledge, the authors conduct the first-ever study to examine the impacts of corporate announcements during a pandemic stress period that significantly contributes to the literature. The authors examine the announcement effects in India and accurately anticipate that this study will be a pioneer in this field. This study also paves the way for future researches in this area.

An Analysis of Stock Splits Trading Volume for BSE 500 Index Companies

With a sample of 65 businesses listed on the Bombay Stock Exchange from 2008 to 2021, the focus of this research is to examine any notable changes in trading volume activity before and after a company's stock split announcements. An event window of 61 days is used to calculate the number of stocks traded on daily basis. According to the findings of the individual company level investigation, trading volume increased for 37 companies, while it decreased for the other 28. However, the results of just 21 of the companies are statistically significant. Trade volume has increased in eight sectors while declining in three others, according to a sectoral analysis of the trading volume. Stock splits enhance post-split liquidity for the vast majority of sample businesses in the month after the split, according to the study's empirical findings, as assessed by daily trading volume and number of shares traded.

Effect of Stock Split and Dividend Announcement on Trading Volume in Companies Listed on the Indonesia Stock Exchange

This study aims to determine whether stock spills and dividend announcements affect the trading volume of companies listed on the Indonesia Stock Exchange for the 2017-2019 period with a total of 14 companies. This study uses a quantitative approach. By using secondary data where data collection is at the IDX, Faculty of Economics and Business, Muhammadiyah University of Sidoarjo or from the IDX official website. Data collection is done by tracing financial statements, annual reports and audit reports, trading volume reports and previous journals. The results of this study state that partially the Stock split variable has no significant effect on Trading Volume, while the Dividend Announcement variable has a significant effect on Trading Volume.

AN ANALYSIS OF ABNORMAL RETURNS ASSOCIATED WITH STOCK SPLIT

A stock split is when a company’s outstanding shares are divided into multiple shares by issuing more shares to current shareholders without eroding their stake’s value. The company typically takes these actions to increase liquidity and marketability, lower stock prices, attract new investors and so on. The purpose of this study is to examine the impact of stock splits on the stock returns during the study period. Companies listed on the Bombay Stock Exchange (BSE) and those included in the S&P BSE 500 Index are included in the stock split data. The study period covers 14 years, between 2008 and 2021. Market model event study methodology is being employed to analyze the average abnormal returns (AARs), cumulative abnormal returns (CARs) and cumulative AAR (CAARs) using an event window period consisting of 31 days ([Formula: see text]). The study is largely based on secondary information from the CMIE Prowess IQ Database and the official BSE website. The [Formula: see text]-test, mean and standard deviation were used to investigate the influence of stock split announcements on share prices and the performance of stock splits before and after the announcement. The study found that on ([Formula: see text]), ([Formula: see text]), ([Formula: see text]) and ([Formula: see text]) and on the day of the announcement ([Formula: see text]), the market reacted favorably with significant positive abnormal returns. On ([Formula: see text]) and ([Formula: see text]) days, however, there were significant negative abnormal returns. The null hypothesis is accepted as the CAR for the whole 31-day event window, which is 0.0221, with a [Formula: see text]-statistic of 1.692, which is insignificant.

Stock Price Reaction to the Stock Splits Announcement of Listed Companies in the Colombo Stock Exchange

A stock split is a corporate event that directly impacts the number of a company’s shares and indirectly on stock prices. This study tests the effect of the stock splits on the share price of companies listed in the Colombo Stock Exchange during the periods of pre and post stock split announcement in accordance with the Efficient Market Hypothesis. The main objective of this paper is to identify the overall impact of a stock split announcement on stock prices. This study analyses 88 annual stock splits during the ten (10) year period from 2009 to 2019 by taking the listed companies in the Colombo Stock Exchange into consideration. It uses the event study methodology to test the market efficiency of the Colombo Stock Exchange, and the market model is run with the aid of abnormal returns, which are calculated based on daily closing stock prices and the All-Share Price Index. For analysing the results, the graphical analysis and t statistics have been utilized. According to the event day average abnormal return, the majority of stock splits were more negative than positive with a significant t value at 5% by indicating that investors were taking the stock split announcement as bad news just after the split announcement was released. Each day with a significant Average Abnormal Return shows more positives than negatives. Graphical results have shown both Average Abnormal Return, and Cumulative Average Abnormal Return has remained continuously negative up to 18 and 25 days, respectively, by implicating that stock splits have made a deleterious impact on stock return. This study finally concludes that the information regarding the stock splits has not been absorbed efficiently by the market because the market reactions before and after the date of the split announcement were significant at 5%, although the Average Abnormal Return got a quick reaction to the announcement. Furthermore, results had not provided evidence for Semi-Strong Form efficiency of the Colombo Stock Exchange since the significant stock price adjustments before and after the event day was noticed. By this study, the policymakers and investors are convinced that all information has not been incorporated into stock prices in making their decisions.

Corporate Announcements and Market Efficiency: A Case on Indian Capital Market

Capital markets being the backbone of the economy, are expected to be functioning efficiently. Efficiently-priced financial markets are considered a catalyst for the economic growth of the nations (Malkiel, 2010). Efficient markets are the reflection of security valuations. In an informationally efficient market, no one can beat the market and make abnormal returns based on the information because the information is instantaneously observed in the stock prices. The current paper analyses the market efficiency of three of the most popular corporate events, i.e., announcement of cash dividends, bonus issues, and stock split in the Indian context. The sample is 2253 pure cash dividend announcements (627 large-caps, 552 mid-caps, and 1074 small-caps), 152 bonus issue announcements (49 large-caps, 33 mid-caps, and 70 small-caps), and 181 stock split announcements (35 large-caps, 34 mid-caps, and 112 small-caps) were used for this study. Event methodology market model used to calculate Average Abnormal Returns (AAR) and Cumulative Average Abnormal Returns (CAAR).
 
 The results of the study have few findings which are contradictory to the existing literature on market efficiency. The cash dividend announcements have shown evidence for market efficiency, and results are contrary to Gupta et al. (2012), but the results are similar to Mishra (2005). Bonus issue announcements also have shown evidence for a semi-strong form of efficiency, test results identical to Dhar and Chhaochharia (2008), Kumar and Mittal (2015). Stock split announcements have not shown market efficiency, and the effect is similar to the study of Lakshmi and Roy (2012) and contrary to Chavali and Zahid (2011). Our results also support the premise that the emerging countries depict evidence of market efficiency (Bechev, 2003). Finally, we conclude that market efficiency results differ based on corporate announcements and market capitalization.

DAMPAK KERUSUHAN MAKO BRIMOB MEI 2018 TERHADAP ABNORMAL RETURN INDEKS LQ45 YANG TERDAFTAR DI BEI

This research is an event study that aims to determine the differencein the average Abnormal return (AR) before, during, and after the MakoBrimob riot. The subject of this study is the LQ45 index company that hasfulfilled the criteria. The company does not conduct corporate actions suchas the announcement of stock split, right issue, merger & acquisition, anddividend in the observation period, which is five days before the riot, oneday during the riot (May 9, 2018) and five days after the riot. The results ofthe data normality test found that the data in this study were normallydistributed. P-value shows the number 0.412. The results of the differenttests using independent Sample T-Test (H1) showed no difference in theaverage abnormal return before, and during the Mako Brimob riots (ρ =0.050). The results of different tests using independent Sample T-Test (H2)were no difference in the average abnormal return during and after the incidentof the Mako Brimob riots (ρ = 0.117). The results of different testsusing Paired Sample T-Test (H3) were no difference in the average abnormalreturn before and after the incident of the Mako Brimob riots (ρ = 0.77).