A Study on Corporate Action: Analysis of Market Reaction Around the Bonus Issue in India
Keywords:
Market Reaction to Bonus Issue s: Average Abnormal Returns around the Bonus Issue Announcements and Average Abnormal Returns around the Bonus Issue Date, Effect of Liquidity: Effect on Trading Volume and Effect on Daily Turnover, Market Reaction to Bonus Issue s, Effect of LiquidityAbstract
Indian stock markets, one of the oldest in Asia has its history dating
back to nearly 200 years ago. It is one of the fastest growing
emerging markets of the world. At present there are total 23
recognized stock exchanges across the country. India has the second
largest number of listed securities after USA.
The present research paper, “A study on Corporate Action: Analysis
of Market Reaction around the Bonus Issue in India”, has been
undertaken with three objectives. Study works with 239 sample
companies announcing Bonus Issues during January, 2013 to
December 2017. Data pertaining to samples are collected from
secondary sources. Data are analyzed using functions of packages
like SPSS Evolution Version 18 and Microsoft Excel. The study
examines price and liquidity effect associated with Bonus Issues
surrounding its announcement and execution date by using standard
Event Study methodology, which measures significance of abnormal
returns and changes in liquidity associated with an event. The study
has also narrated the results and plausible recommendations.
