Announcement Effects of Seasoned Equity Offerings in China

humera shahid, Xinping Xia, Faiq Mahmood, Muhammad Usman

Abstract


By taking a longer period (1998-2008) this study examines the stock price reaction to the announcement of different equity issues in China. Initially, the study documents the announcement effects of Right issues and Public Offerings (SEOs). Secondly, it adds to the previous literature by keeping in view three successive announcement dates for SEOs as event dates i.e. Board of directors meeting date (BOD), shareholders’ meeting date and announcement date to public. Findings suggest that market react positively to the announcement of right offerings while SEOs convey negative signals to market. Consistent with earlier studies on Right issues announcement effects around different event dates, SEOs price effects are also more significantly negative around BOD date. For shareholders’ meeting date less significant response is observed while around announcement date again more negative significant returns are observed, more than shareholders’ meeting date but less than BOD meeting date.


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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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