Anticipation, Asymmetric Information and the Announcement Effect of Greek Seasoned Equity Offerings

We investigate rights issues on the Athens Stock Exchange. Across 129 issues during 1992-99, we find a significant announcement effect of 2%. Further examination shows that firms were more likely to issue stock after large price run-ups, after recent earnings announcements, to lower uncertainty over their market value, and if they had not issued equity in the two years before the issue; smaller, more highly leveraged firms were also more likely to issue equity. We find no evidence that investors could anticipate issues. Both conditional and unconditional event study methodologies show that valuation uncertainty is the only variable explaining announcement period returns.