Case Study on the Impact of Earnings Announcement Upon the Market Value of SIF

Author:Dragoș BÎLTEANU, Marianna BOTIKA, Univ. Prof. Ion STANCU, Ph. D.

JEL:G12; L25; M41

DOI:

Keywords:financial reporting, event study, market model, "build-up" model, abnormal returns

Abstract:
This research involved a detailed analysis of the SIF’s financial reporting moments. The authors analyzed each SIF, individually, considering the unique moment of announcement of results (i.e., preliminary results). The Day 0 represents the time of the event, and the sliding window included 10 days before the announcement (pre-announcement) and 10 days after the announcement (post-announcement). This paper makes an analysis of the impact on the securities market value ofSIF1 financial results announcement, compared to the other four SIFs.\r\nThe empirical results of this study do not explain all the effects of event reporting on the SIF’s market value. The main causes of this limitation are determined by the dual mode / uneven reporting by SIF in the BSE system and the multiple forms submission of financial results with very different time periods, from a financial company to another.\r\nThis study proposal is justified by the need to legislate financial reporting in accordance with IFRS as reference for reporting preliminary results and, also, for annual financial reporting in the annual general meeting of shareholders. In this way, the presentation of annual results will include all changes in securities market value, the profit made during the year, and especially, the change of the market value of the asset portfolio.\r\n

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