Stock market reactions to financial information

Abstract

Purpose – The purpose of this study is to examine the response of stock prices to financial announcements.Design/methodology/approach – The method used is a computer‐based content analysis of qualitative data. The data is from a Swedish real estate firm during the period 1991‐1996. The information collected and analysed comes from the company's press releases, quarterly statements and articles in the six largest business magazines in Sweden. Annual statements were excluded from the study due to the fact that the publication of these statements occurred at a point of time when the information was already reflected in the share prices.Findings – A positive correlation was found between the stock prices and the following information categories: net asset value, occupancy rates, cash flow and overall capitalisation rate. These results are compared to other studies investigating the influence of information on stock prices. The results from this study confirm previous results.Research limitation/implications –...