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Financial Magazines impact on the Swedish Stock Market: An event study
Linnaeus University, School of Business and Economics, Department of Management Accounting and Logistics.
2019 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The purpose of this study is to investigate the effect of a stock recommendation from the

leading financial magazines in Sweden. The study aims to measure the impact a

recommendation illustrates in true value. The measurements are mean abnormal returns

(AR), mean cumulative abnormal returns (CAR) and mean abnormal volume (AV).

Conducting an event study to monitor, not only the date of announcement, but to also validate

or invalidate the recommendation as a fundamental changer in the stock case. Where the

calculations are made before, on and after the event occurs. With the aim to test if the market

is efficient and in line with the rational theories, or if there are other explanatory theories, like

the behavioral financial approach, that can explain the results. The sample consists of 571

recommendations that have been announced 2017 and 2018, divided into categories of buy

and sell. The sample of buy and sell are also tested in subcategories of small and large

companies, to measure the impact due to size of the firm, as a dependent variable. The

empirical results shows that there are AR and AV existing due to recommendations. Small

companies have the highest measured AR, with sell recommendations having the largest

effects. The sell recommendations changes the value and the fundamentals of the stocks,

while buy recommendations react positive to the recommendations on the day of

announcement, then reverses back to the same price in the end of the event window.

Suggesting that the market act both efficient and rational, but also irrational and ineffective,

depending on what type of recommendation that is being released and how large and well

monitored the company, that gets the recommendation is.

Place, publisher, year, edition, pages
2019. , p. 51
Keywords [en]
Recommendation, event study, efficient market, overreaction, behaviour finance
National Category
Business Administration
Identifiers
URN: urn:nbn:se:lnu:diva-85638OAI: oai:DiVA.org:lnu-85638DiVA, id: diva2:1327581
Subject / course
Business Administration - Other
Educational program
Business Administration and Economics Programme, 240 credits
Supervisors
Examiners
Available from: 2019-06-26 Created: 2019-06-19 Last updated: 2019-06-26Bibliographically approved

Open Access in DiVA

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf