Capital markets are normally considered to be efficient when prices reflect all the available inf... more Capital markets are normally considered to be efficient when prices reflect all the available information. However, there are instances when this information takes several weeks to be incorporated into share prices. This leads to investors' making uninformed investment strategies on whether to hold or dispose shares thus unable to maximize returns. The study determined stock returns of firms listed in NSE and further determined the level of efficiency of NSE. An empirical evidence of anomalies for the study was obtained from 31 companies listed at the Nairobi Securities Exchange, which traded and announced their earnings in 2007. A data collection sheet was used to collect secondary data on market indices, daily closing share prices and traded volumes for a period of 15 days before and after earnings announcement. Daily market adjusted abnormal and cumulative abnormal returns were computed and a further t-test at 5% level of significance done to determine the effect of earnings ...
Corporations can raise their development capital domestically or through cross-borders listing. L... more Corporations can raise their development capital domestically or through cross-borders listing. Literature reveals that cross-listing of shares enhances firm's visibility and value, and lessens information asymmetry. However, there is scanty empirical evidence on how it affects a firm's financial performance. The objective of this study was to examine whether cross-border listing affects firm's financial performance in Eastern Africa. Financial data spanning three years before and after cross-listing was collected from financial statements of three Kenyan firms which have cross-listed their shares in USE, DSE, and RSE between 2001 and 2011. Using financial ratio analysis, liquidity, profitability, gearing and investor ratios were computed three years before and after cross-listing. The results show a low positive financial performance in terms of liquidity upon cross-listing. Market confidence as measured by P/E ratio also improved. This implied that regional cross-listi...
Capital markets are normally considered to be efficient when prices reflect all the available inf... more Capital markets are normally considered to be efficient when prices reflect all the available information. However, there are instances when this information takes several weeks to be incorporated into share prices. This leads to investors' making uninformed investment strategies on whether to hold or dispose shares thus unable to maximize returns. The study determined stock returns of firms listed in NSE and further determined the level of efficiency of NSE. An empirical evidence of anomalies for the study was obtained from 31 companies listed at the Nairobi Securities Exchange, which traded and announced their earnings in 2007. A data collection sheet was used to collect secondary data on market indices, daily closing share prices and traded volumes for a period of 15 days before and after earnings announcement. Daily market adjusted abnormal and cumulative abnormal returns were computed and a further t-test at 5% level of significance done to determine the effect of earnings ...
Corporations can raise their development capital domestically or through cross-borders listing. L... more Corporations can raise their development capital domestically or through cross-borders listing. Literature reveals that cross-listing of shares enhances firm's visibility and value, and lessens information asymmetry. However, there is scanty empirical evidence on how it affects a firm's financial performance. The objective of this study was to examine whether cross-border listing affects firm's financial performance in Eastern Africa. Financial data spanning three years before and after cross-listing was collected from financial statements of three Kenyan firms which have cross-listed their shares in USE, DSE, and RSE between 2001 and 2011. Using financial ratio analysis, liquidity, profitability, gearing and investor ratios were computed three years before and after cross-listing. The results show a low positive financial performance in terms of liquidity upon cross-listing. Market confidence as measured by P/E ratio also improved. This implied that regional cross-listi...
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