Loss sensitive investors and positively biased analysts in Hong Kong stock market

The Hong Kong stock market is known to be highly volatile. Professional investors have a strong demand for timely information because of the infrequent nature of Hong Kong analysts’ interim reports (Cheng et al., 2003). Our paper provides a comprehensive study of investor reactions to analysts’ reco...

Full description

Saved in:
Bibliographic Details
Published in:Review of quantitative finance and accounting 2021-11, Vol.57 (4), p.1345-1371
Main Authors: Choudhry, Taufiq, Dissanaike, Gishan, Jayasekera, Ranadeva, Kang, Woo-Young, Nnadi, Matthias
Format: Article
Language:English
Subjects:
Accounting/Auditing
Analysts
Corporate Finance
Econometrics
Economics and Finance
Finance
Investors
Operations Research/Decision Theory
Original Research
Securities markets
Volatility
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The Hong Kong stock market is known to be highly volatile. Professional investors have a strong demand for timely information because of the infrequent nature of Hong Kong analysts’ interim reports (Cheng et al., 2003). Our paper provides a comprehensive study of investor reactions to analysts’ recommendations in the Hong Kong stock market from 2009 to 2014 under different sentiment scenarios. We find that analysts’ recommendation upgrades and downgrades deliver significant information to the Hong Kong stock market. However, analysts’ initiation coverages convey little information and bring about limited impact to the stock market. In addition, analysts’ upgrades and downgrades result in significant differential price impacts in bullish and the bearish phases.
ISSN:0924-865X
1573-7179
DOI:10.1007/s11156-021-00980-7