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

Loss sensitive investors and positively biased analysts in Hong Kong stock market
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’ 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.
0924-865X
1345–1371
Choudhry, Taufiq
6fc3ceb8-8103-4017-b3b5-2d38efa57728
Kang, Woo-Young
ed39e823-6eed-4a66-9aa0-bcc6d66ffa92
Nnadi, Matthias
12367bad-6bee-4820-a1cf-3efa4efa5076
Dissanaike, Gishan
6e508770-bb2c-4c79-b8e8-a4394995755d
Jayasekera, Ranadeva
954425c6-cdc9-4ca9-9a6f-b6abac82bd4c
Choudhry, Taufiq
6fc3ceb8-8103-4017-b3b5-2d38efa57728
Kang, Woo-Young
ed39e823-6eed-4a66-9aa0-bcc6d66ffa92
Nnadi, Matthias
12367bad-6bee-4820-a1cf-3efa4efa5076
Dissanaike, Gishan
6e508770-bb2c-4c79-b8e8-a4394995755d
Jayasekera, Ranadeva
954425c6-cdc9-4ca9-9a6f-b6abac82bd4c

Choudhry, Taufiq, Kang, Woo-Young, Nnadi, Matthias, Dissanaike, Gishan and Jayasekera, Ranadeva (2021) Loss sensitive investors and positively biased analysts in Hong Kong stock market. Review of Quantitative Finance and Accounting, 1345–1371. (doi:10.1007/s11156-021-00980-7).

Record type: Article

Abstract

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.

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Accepted/In Press date: 4 February 2021
e-pub ahead of print date: 10 April 2021
Published date: 1 November 2021

Identifiers

Local EPrints ID: 448115
URI: http://eprints.soton.ac.uk/id/eprint/448115
ISSN: 0924-865X
PURE UUID: 29cb07fd-9a75-4524-b448-5c5b7081edd5
ORCID for Taufiq Choudhry: ORCID iD orcid.org/0000-0002-0463-0662

Catalogue record

Date deposited: 01 Apr 2021 15:59
Last modified: 13 May 2022 04:01

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Contributors

Author: Taufiq Choudhry ORCID iD
Author: Woo-Young Kang
Author: Matthias Nnadi
Author: Gishan Dissanaike
Author: Ranadeva Jayasekera

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