Are cash flows relevant for stock pricing in Bursa Malaysia?
The research on whether information on cash flows have any impact beyond earnings disclosures has inconclusive results. Changes in cash flows are found to have significant impact beyond that of earnings only if share price changes are measured over a short window of about 3 days and not over a lon...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics and Management, Universiti Putra Malaysia
2008
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| Online Access: | http://psasir.upm.edu.my/id/eprint/13262/1/13262.pdf |
| _version_ | 1825945202721816576 |
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| author | Cheng, Fan Fah Ramadilli Mohd, Shamsher Mohamad |
| author_facet | Cheng, Fan Fah Ramadilli Mohd, Shamsher Mohamad |
| author_sort | Cheng, Fan Fah |
| collection | UPM |
| description | The research on whether information on cash flows have any impact beyond earnings disclosures has inconclusive results. Changes in cash flows are found to have significant impact beyond that of earnings only if share price changes are measured over a short window of about 3
days and not over a long window of say annual or 51 days windows. The results show that cash flow changes measured over one-year intervals did not affect share prices. This is also reconfirmed using the portfolio approach. To recapitulate, though cash flows appear to have no information content on share prices in the annual and medium
windows tests, it does have information content in the short window tests with incremental information content beyond earnings, implying it has relevant value information though investors are more comfortable with earnings announcements for share price valuation. This finding
reported from an emerging economy is consistent with evidence from developed markets. |
| first_indexed | 2024-03-06T07:27:50Z |
| format | Article |
| id | upm.eprints-13262 |
| institution | Universiti Putra Malaysia |
| language | English |
| last_indexed | 2024-03-06T07:27:50Z |
| publishDate | 2008 |
| publisher | Faculty of Economics and Management, Universiti Putra Malaysia |
| record_format | dspace |
| spelling | upm.eprints-132622015-07-07T00:00:57Z http://psasir.upm.edu.my/id/eprint/13262/ Are cash flows relevant for stock pricing in Bursa Malaysia? Cheng, Fan Fah Ramadilli Mohd, Shamsher Mohamad The research on whether information on cash flows have any impact beyond earnings disclosures has inconclusive results. Changes in cash flows are found to have significant impact beyond that of earnings only if share price changes are measured over a short window of about 3 days and not over a long window of say annual or 51 days windows. The results show that cash flow changes measured over one-year intervals did not affect share prices. This is also reconfirmed using the portfolio approach. To recapitulate, though cash flows appear to have no information content on share prices in the annual and medium windows tests, it does have information content in the short window tests with incremental information content beyond earnings, implying it has relevant value information though investors are more comfortable with earnings announcements for share price valuation. This finding reported from an emerging economy is consistent with evidence from developed markets. Faculty of Economics and Management, Universiti Putra Malaysia 2008-12 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/13262/1/13262.pdf Cheng, Fan Fah and Ramadilli Mohd, Shamsher Mohamad (2008) Are cash flows relevant for stock pricing in Bursa Malaysia? International Journal of Economics and Management, 2 (2). pp. 353-367. ISSN 1823-836X http://econ.upm.edu.my/ijem/vol2_no2.htm |
| spellingShingle | Cheng, Fan Fah Ramadilli Mohd, Shamsher Mohamad Are cash flows relevant for stock pricing in Bursa Malaysia? |
| title | Are cash flows relevant for stock pricing in Bursa Malaysia? |
| title_full | Are cash flows relevant for stock pricing in Bursa Malaysia? |
| title_fullStr | Are cash flows relevant for stock pricing in Bursa Malaysia? |
| title_full_unstemmed | Are cash flows relevant for stock pricing in Bursa Malaysia? |
| title_short | Are cash flows relevant for stock pricing in Bursa Malaysia? |
| title_sort | are cash flows relevant for stock pricing in bursa malaysia |
| url | http://psasir.upm.edu.my/id/eprint/13262/1/13262.pdf |
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