A Stock Market Reaction Following Convertible Bond Issuance PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download A Stock Market Reaction Following Convertible Bond Issuance PDF full book. Access full book title A Stock Market Reaction Following Convertible Bond Issuance.
| Author | : Wei Cheng |
| Publisher | : |
| Total Pages | : 18 |
| Release | : 2005 |
| Genre | : |
| ISBN | : |
Download A Stock Market Reaction Following Convertible Bond Issuance Book in PDF, ePub and Kindle
This paper examines the stock price reaction to the announcement of convertible bonds (CBs) issuance during the period 1996 through 2002 in Japan. We discover a significantly negative stock price reaction to the announcement of CBs. This result conforms to the negative stock reaction in the U.S. market but is inconsistent with the previous study in Japan. Firm size is evidenced increasing the negative cross-sectional variation of abnormal stock return, while the growth options have positive relationship. There is no evidence of the association between the leverage and the abnormal return. In addition, the long-term performance of the stock prices after the CBs issuance firms are found under-performing the market index and what they should have done given their levels of systematic risks. Coupling with the negative stock price reaction around the issuance announcement period, the Japanese issuance firms under-react to the CBs issuance, consistent with the under-reaction hypothesis that has been explained by the U.S. empirical results.
| Author | : Hyeong Joon Kim |
| Publisher | : |
| Total Pages | : 46 |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Download Convertible Bond Issue Announcement Effect Book in PDF, ePub and Kindle
This study examines the announcement effect of convertible bond issue in Korea where the issuance of convertible bonds is increasing rapidly. We find that abnormal stock returns are positive for the firms with unusual high trading volume using a sample of listed firms in Korea Stock Exchange during 2000-2015. Moreover, we show that unusual high volume around convertibles issue announcement has positive correlation with capital expenditure when firm has valuable investment opportunities. Therefore, more favorable announcement returns are driven by capital expenditure decisions and the quality of investment opportunities. In the same sense, the impact of cash flow also depends on the issuer's quality of investment opportunities. Additionally, we confirm that issuing convertibles has negative signaling effect that stock of issuer is overvalued, and the issuer's volatility has negative impact around announcement date.
| Author | : Ling Tai Hu |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2020 |
| Genre | : |
| ISBN | : |
Download The Market Reaction to Convertible Bond Issues and the Determinants of Bookrunner Selection Book in PDF, ePub and Kindle
This thesis examines three major aspects of international convertible bond offerings, particularly the market reaction and its determinants, the determinants of bookrunner selection in underwriting market and the outcomes of bookrunner selection. These issues are important for a corporate firm to design the best features of convertible bond underwriting contracts to enhance shareholders' wealth and mitigate asymmetric information. These are relevant to the underwriters to understand whether informational advantage gained via reputation and geographic proximity could equip them if more competitive advantage in delivering better underwriting services. Furthermore, financial regulators are benefited from this study to better understand the underwriting market in convertible bond offerings. My research focuses on an overall sample size of 11,350 convertible bond offerings worldwide issued between 1984 and 2015. I analyse the market reaction for different countries, industrial classifications and stated purpose of proceeds following the announcements of convertible bond offerings. I regress the stock price reactions against firm-specific, issue-specific, market-specific, country-specific and investor protection-specific factors. I examine the determinants of domestic, regional and reputable bookrunner selection by regressing them on firm-specific, issue-specific and market-specific. I also examine whether bookrunners with economies of scale advantage are more likely to gain underwriting contracts in convertible bonds. The bookrunner performance is analysed based on the stock price reactions, underwriting fees and offering yields-at-issue. I further explore to investigate the outcome of bookrunner selection across different regions. The findings of this study have important implications for various strands of academic literature. I contribute to reveal that the stock prices of convertible bond issuers react differently to different countries, industrial classifications and stated purpose of proceeds. My results from regression analysis show that the different market reactions are significantly associated by firm-specific, issue-specific, market specific, country-specific and legal system factors. I also contribute to identify the underwriting preferences by corporate treasurers in hiring domestic, regional and reputable bookrunners. This helps underwriters to effectively gain underwriting contracts. This study contributes to two dominant literature on geographic proximate and reputable bookrunner selections in international convertible bond offerings. My findings provides important policy suggestions for issuers and investors to make a better evaluation on the outcomes of both geographical proximate and reputable bookrunners simultaneously in international convertible bond offerings.
| Author | : |
| Publisher | : |
| Total Pages | : |
| Release | : 2001 |
| Genre | : |
| ISBN | : |
Download The Announcement Effects and the Long-Run Performances of Convertible Bond Issuances Book in PDF, ePub and Kindle
We discuss several measurements of equity components in CBs and then examine the short-run announcement effects and the long-run performances surrounding CB issuances by dividing the whole sample of CBs into a debt-like portfolio, a mixed portfolio and an equity-like portfolio. At the time of the CB issuance announcements, the market reactions to different portfolios strictly follow a hierarchy predicted by the pecking order hypothesis. In the long-run subsequent to the CB issuances, the buy and hold stock returns of the equity-like portfolio significantly underperform the industry and market benchmarks and the debt-like portfolio; the operating performances of the issuers that issuance equity-like CBs significantly deteriorated from the pre issuance period, inducing them to underperform both the issuers that issuance debt-like CBs and their non-issuing counterparts; and also, the equity-like portfolio went through the most significant increase in the idiosyncratic risk and the total equity risk, which however still do not differ significantly from their industry levels. Furthermore, we notice that the CB issuers' post issuance long-run performances are to a large extent consistent with the short-run market reactions they received. By controlling the equity risks, we contend that the market is able to form an unbiased foresight of the future operating performances of the CB issuers at the time of the CB issuances, and the short-run announcement effects are mostly determined by this market perception.
| Author | : Norhuda Abdul Rahim |
| Publisher | : |
| Total Pages | : 34 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
Download Market Reaction to Announcements of Convertible Bonds Issue in the United Kingdom Book in PDF, ePub and Kindle
This study investigates the wealth effects of announcements of the intention to issue convertible bonds in the UK market over a period from January 1990 until July 2010. The study period also allows for an investigation on the market reaction to announcements of convertible bonds during the financial crisis that started in August 2007. Using the standard event study methodology, a negative abnormal return of 1.75% (significant at the 5% level) on the two-day event window is reported, confirming the findings of previous UK studies (Abyhankar and Dunning, 1999, and Wolf et al., 1999) which are also in line with studies performed using data from other countries such as US, Canada, Australia, and others. There are no significant differences between the results of the sub-samples before and during the financial crisis, suggesting that the economic conditions do not influence the market response. The results of the event study and the multivariate analysis are consistent with the 'market timing hypothesis' implying that managers in the UK announce their intention to issue convertible bonds after a period of good stock price performance.
| Author | : John P. Calamos |
| Publisher | : McGraw Hill Professional |
| Total Pages | : 440 |
| Release | : 1998-06-22 |
| Genre | : Business & Economics |
| ISBN | : 9781557389213 |
Download Convertible Securities: The Latest Instruments, Portfolio Strategies, and Valuation Analysis, Revised Edition Book in PDF, ePub and Kindle
The definitive book on the subject, Convertible Securities explains the various types of convertible instruments, valuation and pricing methods, and investment strategies. Completely updated from its first edition, this guide includes chapters on international convertibles and asset allocation strategies for the institutional investor.
| Author | : François-Serge Lhabitant |
| Publisher | : Wiley |
| Total Pages | : 0 |
| Release | : 2002-05-22 |
| Genre | : Business & Economics |
| ISBN | : 9780470844779 |
Download Hedge Funds Book in PDF, ePub and Kindle
Full coverage of how hedge funds work, from risks to rewards L'Habitant discusses--from an investor's perspective--the potential uses, risks, and returns in hedge funds, while offering both the qualitative and quantitative tools investors need to access these types of funds. Topics not normally covered in discussions of hedge funds are included, such as how to include hedge funds in traditional portfolios, database differences, and non-transparency. A practical guide to a growing, yet little understood, segment of the financial industry. Francois-Serge L'Habitant, PhD (Geneva, Switzerland), is Head of Quantitative Risk Management at Union Bancaire Privee in Geneva, Switzerland. A former computer engineer, he previously served as Director of UBS Private Banking Division. Over the years, financial professionals around the world have looked to the Wiley Finance series and its wide array of bestselling books for the knowledge, insights, and techniques that are essential to success in financial markets. As the pace of change in financial markets and instruments quickens, Wiley Finance continues to respond. With critically acclaimed books by leading thinkers on value investing, risk management, asset allocation, and many other critical subjects, the Wiley Finance series provides the financial community with information they want. Written to provide professionals and individuals with the most current thinking from the best minds in the industry, it is no wonder that the Wiley Finance series is the first and last stop for financial professionals looking to increase their financial expertise.
| Author | : Yingdi Liu |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2012 |
| Genre | : Bonds |
| ISBN | : |
Download Stock price reaction to issuing initial corporate bond and seasoned equity Book in PDF, ePub and Kindle
| Author | : Hui Li |
| Publisher | : |
| Total Pages | : 37 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download A Comparison of the Stock Market Reactions of Convertible Bond Offerings Between Financial and Non-Financials Institutions Book in PDF, ePub and Kindle
We focus on the stock price reaction to convertible bond offering made by financial institutions and find that the cumulative abnormal return over the three day interval around convertible bond issuance is 1.41 percentage higher than that for non-financial institutions. This result supports our hypothesis that since financials are heavily regulated, the market is less likely to assume that the issuance of convertible bond by financials signals information that are overvalued. Our results remain robust after controlling for a number of firm-, issue-, and market-specific characteristics as well as the level of short selling pressure induced by convertible bond arbitrageurs.
| Author | : Silvio Pasquale |
| Publisher | : |
| Total Pages | : |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Implications of an Increasing Conversion Risk of Contingent Convertible Bonds on Share Prices Book in PDF, ePub and Kindle
After the financial crisis of 2007/08, national regulators tightened capital and liquidity rules for financial institutions. The new capital requirements led to an emergence of contingent convertible bond issuances of banks that convert into equity when a predefined trigger is reached. So far it has not been observable how market prices of contingent convertible bonds or bank shares react if the conversion probability increases. In this thesis, two Swiss banks that have issued contingent convertible bonds, which trigger based on the reported Common Equity Tier 1 capital ratio, are analysed. It is examined how their share prices may react in a scenario of surged conversion risk. The basis build a Monte Carlo model that estimates conversion risk and a cash flow model that estimates share values. Evidence is presented that Tier 1 ratios follow a mean reverting process and that the management and shareholders have the power to increase the likelihood that the process reaches the trigger ratio. Moreover, for both banks an augmented conversion risk can enhance share values, although the conversion of some bonds into shares has diluting effects. It can be concluded that there exist some moral hazard issues since the management or shareholders can be incentivised to enforce a conversion or, at least, increase the probability of such an event.
