Effect of Company Related News and Events on its Stock Prices Research Conducted on Top Six Companies Listed at Karachi Stock Exchange

Abstract

This study examines the impact of company news and events on its stock prices. Prior researches show evidence of news effect on the stock prices of the company, depending upon the kind of news and the prevailing economic atmosphere of the country in which the company operates and is registered in the stock exchange. This study investigates what type of news has a positive, no - effect and negative effect on the stock prices of the selected companies listed at all three stock exchanges of Pakistan. Event window methodology was used to analyze the news and events. ANOVA post - hoc tukey and Multiple Regression statistical techniques were used. Data analysis shows that dividend; profit, new investment decisions, appointment of new company administration, insider trading shows positive effect on company's stock indicies. Other news like further issue of stocks, leverage decisions suggested that investors and analyst tends to perceive these as negative or less effects on further investments decisions rather risky towards earning per share and dividend income loss.

Keywords: News, companies, stock indicies, Pakistan Stock Market

JEL Classification: G1,G14