Announcement Effect

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Announcement Effect

A change in security prices or volatility as a result of some announcement. For example, if the Federal Reserve raises interest rates, stock prices are liable to fall. Likewise, if a company announces an acquisition, its stock may rise. The announcement effect may cause drastic price changes; as a result, companies and governments often selectively leak or hint at announcements before they occur to minimize surprises. The announcement effect is also called the signal effect. See also: Price out the News.

References in periodicals archive ?

In model (1), we find that the average announcement effect for government director appointments is, on average, 1.0% lower than that for nongovernment director appointments.

Do Outside Directors with Government Experience Create Value?

Using a sample of private placements made on the Korean Securities Dealers Automated Quotations (KOSDAQ) from January 2000 to December 2010 and limiting it to only include first Secondary Equity Offerings (SEOs), this study examines the relationship between the announcement effects of equity private placements and lock-up and/or discount signals sent by distressed firms as well as healthy ones.

Is signaling by lock-up and discount rates in private equity offerings costly? Evidence from Korea

Keywords : Corporate governance, Event Study, Announcement effects, Stock price, Agency theory

Corporate governance and agency behaviour: methodological analysis of the 'announcement effect of corporate governance failures' on Nigerian stock market prices

Empirical results show that both natural gas and heating oil's announcement day is significantly positive, suggesting that a storage report announcement effect exists, which is consistent with the literature.

Effect of temperature shock and inventory surprises on natural gas and heating oil futures returns

The level of interest-rate increase from the announcement effect could be largely reversed, according to Youngblood.

Yellen's challenge

Gupta (2007) provided evidence that there is no announcement effect associated with stock splits in India though there does exist a pronounced ex- day effect.

A study on investors' opinion on motives behind stock splits by companies in India

Conservatives demand fiscal austerity, the announcement effect of which will somehow attract global capital.

The death of economics

If there is significant announcement effect of the stock prices, the null hypothesis of equal mean is rejected in favour of alternative hypothesis of equal mean.

Buy back of shares-a financial analysis

This pattern would not be anticipated if the announcement effect were purely due to price pressure.3

Stock price effects of mandatory exchangeable debt

The solution proposed by Van Rompuy by changing Protocol 12 could have "an announcement effect knowing full well that this appeal might be deemed inadmissible by the Court.

EUROPEAN COUNCIL : VAN ROMPUY'S 'TRUMP CARD'

Recently, CLR have presented evidence from a six-factor term structure model that indicates that the announcement effect of the TAF had a very large effect on the LIBOR rate.

The effectiveness of unconventional monetary policy: the term auction facility

(The G-7) rather aimed to have an announcement effect,'' he said, referring to the possible impact on markets, which could discourage investors from betting on the yen one-sidedly.