Search results

1 – 10 of over 2000
To view the access options for this content please click here
Article
Publication date: 1 February 2004

Kam C. Chan and Annie Wong

This study examines the effects of exchange listing change on firms that voluntarily switched from American Stock Exchange to Nasdaq. Prior studies find increased bid‐ask…

Abstract

This study examines the effects of exchange listing change on firms that voluntarily switched from American Stock Exchange to Nasdaq. Prior studies find increased bid‐ask spreads in the short‐term period for these firms after the listing changes. This study extends the literature by examining the long‐term effects of the listing change from American Stock Exchange to Nasdaq. The results suggest that there were no significant changes in bid‐ask spreads, number of trades, and percentage of shares traded from the immediate period after the listing change to the much later periods. This study also finds that there was no significant change in the number of shareholders after the switch. The findings suggest that there is no improvement in liquidity and investor recognition for the switching firms.

Details

Review of Accounting and Finance, vol. 3 no. 2
Type: Research Article
ISSN: 1475-7702

To view the access options for this content please click here
Article
Publication date: 11 May 2015

Susana Yu, Gwendolyn Webb and Kishore Tandon

Prior research on additions to the S & P 500 and the smaller MidCap 400 and SmallCap 600 indexes reach different conclusions regarding the key variables that…

Abstract

Purpose

Prior research on additions to the S & P 500 and the smaller MidCap 400 and SmallCap 600 indexes reach different conclusions regarding the key variables that explain the cross-section of announcement period abnormal returns. Most notable in this regard is that liquidity measures, long thought to be of importance, do not appear to explain abnormal returns of the S & P 500 when other factors are controlled for. By contrast, they do appear to matter for additions to the smaller stock indexes. To explore this difference, the purpose of this paper is to analyze the abnormal returns upon announcement that a stock will be added to the Nasdaq-100 Index in a cross-sectional manner, controlling for several possible alternative factors.

Design/methodology/approach

This paper analyzes abnormal returns upon announcement that a stock will be added to the Nasdaq-100 Index. The authors consider several possible sources of the positive price effects in a multivariate setting that controls simultaneously for measures of liquidity, arbitrage risk, operating performance and investor interest and awareness. The authors then analyze both trading volume and the bid-ask spreads. The authors finally examine analyst and investor interest, focussing on changes in analyst coverage.

Findings

The authors find that only liquidity variables are significant, but that factors representing feedback effects on the firm’s operations and level of managerial effort are not. The authors find that the average bid/ask spreads of stocks added to the Nasdaq-100 index are lower after the addition. The authors also find that the number of analysts following a stock increases significantly after addition, verifying increased analyst interest. Both forms of evidence are consistent with the hypothesis that the additions are associated with enhanced liquidity for the stocks.

Originality/value

The authors conclude that what does happen to a Nasdaq stock when it is announced that it will be added to the Nasdaq-100 Index is that more analysts are drawn to it, and its market liquidity is enhanced. The authors conclude that what does not happen is that there is no evidence of significant effects of enhanced managerial effort or operating performance associated with the inclusion. This difference is noteworthy because it suggests that a certification effect of additions to the S & P indexes associated with S & P’s selection process are unique to it and do not apply to the Nasdaq-100 Index additions based on market cap alone. The results provide indirect evidence on the existence and significance of the certification effect associated with additions to the S & P indexes.

Details

Managerial Finance, vol. 41 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Article
Publication date: 1 July 2003

Vasiliki B. Tsaganos, Lawrence R. Bard and Erika J. Moore

In one of the last major Enron‐related corporate reforms, the SEC approved on November 4, 2003 the final versions of both the New York Stock Exchange’s and Nasdaq’s…

Abstract

In one of the last major Enron‐related corporate reforms, the SEC approved on November 4, 2003 the final versions of both the New York Stock Exchange’s and Nasdaq’s corporate governance proposals. Generally, both sets of rules require listed companies to have a majority of their boards comprised of independent directors. In addition, the rules impose significant responsibilities on listed companies’ nominating, compensation, and audit committees. With certain exceptions, both NYSE and Nasdaq companies will have until the earlier of (i) the company’s first annual meeting occurring after January 15, 2004 or (ii) October 31, 2004 to comply with the new rules. This article compares both sets of new rules to current rules, discusses the differences between the NYSE’s and Nasdaq’s new rules and suggests steps issuers should take to comply with the new rules.

Details

Journal of Investment Compliance, vol. 4 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 28 June 2013

Doreen Lilienfeld, John Cannon, Amy Gitlitz Bennett and George Spera

The purpose of this paper is to explain the amendments to the listing standards of the New York Stock Exchange (NYSE) and the NASDAQ Stock Market (Nasdaq), which were…

Downloads
261

Abstract

Purpose

The purpose of this paper is to explain the amendments to the listing standards of the New York Stock Exchange (NYSE) and the NASDAQ Stock Market (Nasdaq), which were approved by the Securities and Exchange Commission (the SEC) on January 11, 2013 to implement the SEC's final rules on the independence of compensation committees and their selection of advisors pursuant to Rule 952 of the Dodd‐Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd Frank).

Design/methodology/approach

After a summary of notable provisions, the paper explains effective dates and respective Nasdaq and NYSE listing standards pertaining to compensation committee compensation; director independence standards, advisors, and charters; certain exemptions for foreign issuers; exemptions for certain types of companies and partnerships; and recommended next steps for companies that are subject to the amended listing standards.

Findings

Over the past few years, the independence of compensation committees and their advisors has been a hot button corporate governance issue. Dodd‐Frank prohibits national securities exchanges from listing any equity security of an issuer that is not in compliance with the exchanges' compensation committee independence and advisor requirements.

Practical implications

The listing standards generally become effective on July 1, 2013; however, listed companies have until the earlier of: their first annual meeting after January 15, 2014; or October 31, 2014, to comply with certain requirements including the independence structure of their compensation committees.

Originality/value

The paper provides practical advice from experienced financial services lawyers.

To view the access options for this content please click here
Article
Publication date: 13 February 2017

Jing Jiang

This paper aims to provide evidence that market efficiency varies greatly across individual stock, and across market exchanges.

Abstract

Purpose

This paper aims to provide evidence that market efficiency varies greatly across individual stock, and across market exchanges.

Design/methodology/approach

Three approaches, partial adjustment model, Dimson beta model and variance ratio test, are used on a large sample of US stocks.

Findings

This paper finds prices are closer to random walk benchmarks (i.e. more efficient) for stocks with better liquidity provision, frequent trading, greater return volatility, higher prices, larger market capitalizations and smaller trade sizes. These findings suggest that liquidity stimulates arbitrage activity, which, in turn, enhances market efficiency. Market efficiency also varies with information environment. The results show that stocks with greater information-based trading exhibit higher level of efficiency. Finally, market structure influences market efficiency. New York Stock Exchange stocks achieve higher level of efficiency than NASDAQ stocks do. The empirical results are robust and not driven by differences in stock attributes between the two markets.

Research limitations/implications

Overall, these results indicate that liquidity provision, stock attributes and market structure exert a significant impact on the realization of market efficiency.

Practical implications

In addition, this paper is also relevant to both stock exchanges facing increased competition and to market regulators.

Originality/value

Prior studies offer little evidence on the speed at which new information is impounded into the price. There is also limited evidence regarding how liquidity provision and market structure affect market efficiency. Using a transformation of the speed of price adjustment and other measurements as proxies for individual stock efficiency, this study may shed further lights on our understanding of market efficiency.

Details

Review of Accounting and Finance, vol. 16 no. 1
Type: Research Article
ISSN: 1475-7702

Keywords

To view the access options for this content please click here
Article
Publication date: 19 October 2012

Harikumar Sankaran, Anh Nguyen and Jayashree Harikumar

The purpose of this paper is to examine the relation between extreme return correlation and return volatility, in the context of US stock indexes, by detecting clusters of…

Abstract

Purpose

The purpose of this paper is to examine the relation between extreme return correlation and return volatility, in the context of US stock indexes, by detecting clusters of extreme returns using return and volatility thresholds based on an algorithm suggested in Laurini.

Design/methodology/approach

The daily returns and conditional volatilities estimated using GARCH (1, 1) serve as inputs to the two threshold algorithm that detects extreme return clusters. The analysis of the relation between correlation and volatility is then based on the extent of overlapping extreme return clusters across DJIA, S&P 500 and NASDAQ composite.

Findings

It is found that the correlation positive extreme returns within overlapping clusters significantly increases with volatility between DJIA and S&P 500. The authors did not find any significant change in the pair‐wise correlation between the positive extreme returns within overlapping clusters in each of these indexes with those of NASDAQ composite.

Originality/value

Prior researches examine extreme returns by using a return threshold and have found mixed results on the relation between correlation and volatility. This paper examines the relation between correlation and volatility between clusters of extreme returns and provides consistent results that are of vital interest to investors.

Details

American Journal of Business, vol. 27 no. 2
Type: Research Article
ISSN: 1935-5181

Keywords

To view the access options for this content please click here
Article
Publication date: 31 January 2011

Chih‐Hsiang Chang, Hsin‐I Cheng, I‐Hsiang Huang and Hsu‐Huei Huang

The purpose of the paper is to investigate the price interrelationship between the Taiwanese and US financial markets.

Downloads
1240

Abstract

Purpose

The purpose of the paper is to investigate the price interrelationship between the Taiwanese and US financial markets.

Design/methodology/approach

The trivariate GJR‐GARCH (1,1) model and event study were employed to investigate volatility asymmetry and overreaction phenomenon, respectively.

Findings

The empirical results show that return volatility reveals the asymmetric phenomenon, and the holding period returns on US index futures from the opening of the US index futures electronic trading to the opening of the Taiwanese stock market are an important reference for investors in the Taiwanese stock market. Additionally, the paper presents an overreaction of the Taiwan Stock Exchange Capitalization Weighted Stock Index to a drastic price rise of E‐min NASDAQ 100 Index futures at the opening of the Taiwanese stock market.

Research limitations/implications

This paper deletes the observations arising from the different national holidays of the USA and Taiwan, to have the same number of observations in both markets, which might contaminate the empirical results.

Practical implications

Investors in the Taiwanese stock market tend to pay more attention to the fluctuations in the share prices of high‐technological companies in the USA.

Originality/value

Most of the previous studies regarding price transmission between the Taiwanese and US stock markets focused mainly on the Taiwanese market reactions to the overnight returns of the US market. This paper enlarges the current field by examining the lead‐lag relationship, the volatility asymmetry, and the overreaction phenomenon between the Taiwanese and US financial markets according to the most updated US stock index information.

Details

Managerial Finance, vol. 37 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Article
Publication date: 23 September 2019

Helene R. Banks, Bradley J. Bondi, Charles A. Gilman, Elai Katz, Geoffrey E. Liebmann, Ross Sturman and Nicholas S. Millington

To explain the rule changes in Nasdaq’s new Listing Rule IM-5315-1, approved by the US Securities and Exchange Commission (SEC) on February 15, 2019, that permit direct…

Downloads
111

Abstract

Purpose

To explain the rule changes in Nasdaq’s new Listing Rule IM-5315-1, approved by the US Securities and Exchange Commission (SEC) on February 15, 2019, that permit direct listings on Nasdaq without an initial public offering, similar to the New York Stock Exchange (NYSE) rule changes approved in 2018.

Design/methodology/approach

Explains the legislative and regulatory background, historic limitations on direct Nasdaq listings, and de-tailed provisions of Nasdaq’s new Listing Rule IM-5315-1.

Findings

The direct listing alternative to an IPO may appeal to cash-rich companies that do not need the publicity or new capital associated with a traditional IPO.

Originality/value

Expert analysis from experienced securities litigation and corporate governance lawyers.

Details

Journal of Investment Compliance, vol. 20 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

To view the access options for this content please click here
Article
Publication date: 22 June 2012

W. Paul Spurlin, Bonnie F. Van Ness and Robert Van Ness

The purpose of this paper is to study short sales trading as part of the New York Stock Exchange (NYSE) batch open and National Association of Securities Dealers Automated…

Abstract

Purpose

The purpose of this paper is to study short sales trading as part of the New York Stock Exchange (NYSE) batch open and National Association of Securities Dealers Automated Quotations (NASDAQ) opening cross. The paper examines whether short transactions at the open can predict future returns.

Design/methodology/approach

The study tests to see if short transactions in the NYSE opening batch trade and NASDAQ opening cross are informative of future returns.

Findings

It is found that a stock's opening‐trade short volume is predictive of its short volume for the rest of trading day, positively related to its previous‐day price change, and positively related to its overnight price change at the opening trade on option‐expiration Fridays when the stock is part of the Standard and Poor (S and P) 500 index.

Originality/value

While previous research shows that intraday short sale trades are informative, this is the first paper to examine the opening trade of the day, and whether these short sales are informative.

Details

International Journal of Managerial Finance, vol. 8 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

To view the access options for this content please click here
Article
Publication date: 11 March 2019

Justin F. Hoffman and Jude A. Dworaczyk

To explain a recent amendment by the US Securities and Exchange Commission (the SEC) to Nasdaq Rule 5635(d) (the 20 per cent Rule) to change the definition of “market…

Abstract

Purpose

To explain a recent amendment by the US Securities and Exchange Commission (the SEC) to Nasdaq Rule 5635(d) (the 20 per cent Rule) to change the definition of “market value” for purposes of the 20 per cent Rule and eliminate the requirement for shareholder approval of certain private issuances at a price less than book value but greater than market value.

Design/methodology/approach

This article provides background on the purpose and policy behind the 20 per cent Rule and summarizes the provisions of the 20 per cent rule, both before and after the recent SEC amendment thereto. This article then highlights the most important changes to the 20 per cent Rule and explains the implications thereof for Nasdaq-listed issuers.

Findings

The amended 20 per cent Rule provides Nasdaq-listed issuers greater flexibility in structuring transactions involving private placements of equity and will likely reduce the number of such transactions requiring a shareholder vote.

Originality/value

Practical guidance from experienced corporate finance and capital markets lawyers.

Details

Journal of Investment Compliance, vol. 20 no. 1
Type: Research Article
ISSN: 1528-5812

Keywords

1 – 10 of over 2000