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|Title:||FINANCING DECISIONS AND STOCK PRICES OF PROPERTY COMPANIES||Authors:||LOH SIEW YI||Issue Date:||2003||Citation:||LOH SIEW YI (2003). FINANCING DECISIONS AND STOCK PRICES OF PROPERTY COMPANIES. ScholarBank@NUS Repository.||Abstract:||This study attempts to determine if financial announcements regarding the financial decisions made by property companies have an impact on the abnormal returns received by the companies. A total of 14 companies are used in the sample for this study and the study spans over the period of 15 years, from 1987 to 2002. It aims to provide property stock investors with an understanding of how financial announcements may create an impact on the company's abnormal performance. Knowledge in this aspect will help investors to make prudent decisions as to when to sell and buy property stocks. External funding plays an important role in the capital structure of property companies more than any other type of company types. The study notice a trend that property companies time their financing decisions according to the market condition and risk adjusted performance of property companies were badly affected by the 1991 Gulf War, and has been in the recline since the 1996 anti-speculation measures, the 1997 Asian economic crisis and was dealt with another heavy blow by the 1999 September 11 ^ incident, which caused a global recession. This study finds that financial leverage to be negatively related to abnormal returns. This implies that as financial leverage increases, the higher expected return is insufficient to compensate the high risk that many property companies faced and as such, resulting in lower performance on a risk-adjusted basis. The study also finds that capital structure changes bring about a significant increase in abnormal returns although the abnormal returns are not driven partly by the financial announcements. An abnormality is observed in the study, that is, equity issues bring about abnormal returns , which do not prove to be significant but this is an interesting aspect that should be explored.||URI:||https://scholarbank.nus.edu.sg/handle/10635/213186|
|Appears in Collections:||Bachelor's Theses|
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