Stock market reaction to Corporate Announcements

Information conveyed by the corporate to their shareholders and general public are known as Corporate Announcements. The announcements may convey the current and future prospects of the firms to the market. When investors perceive the Corporate Announcements as healthy information, it may impact positively on its share price, whereas, bad information creates negative impact in the market. However, this announcement never reaches all the investors instantly, since no market is perfect where the information reaches all the investors at the same time. As suggested by the Efficient Market Hypothesis, in semi-strong form of the market the investors, who access the information early, will monetise the information ahead of others. Unfortunately, not all information will influence the investors on the company's share price. There are a few events to which market may not react at all. Hence, a better understanding of the Corporate Announcements is required for the investors to decide on whether to buy or sell a particular stock. The research carried out by the authors will give the answer for all your queries with reference to corporate announcements.