ABSTRACT
The purpose of this study is to examine how stock price changes around the common recommendations in presses of Economic Daily News and United Evening News. By using event-study methodology, the impact of common recommendations in presses on recommended stocks is examined. The expected return was derived using the market model and Ordinary Least Square. The period is from January 1, 2007 to August 16, 2009. There are 238 stock samples totally. In this study, event days were the first trading day after each of common recommendations, and event periods were taken from five trading days before and after the event. The result indicated that stocks price was reflected in statistically significant positive abnormal return relevant with presses common recommendations in announcement day and before announcement day. Post-announcement day, stocks returns in statistically are significantly negative relevant with presses common recommendations. Empirical evidence proof that presses common recommendations is a lagging indicator.
