Empirical Study on the Announcement Effect of Convertible Bond Issuances

• Main Authors: Liu, Liang-Hai, 劉量海
• Other Authors: Chen, Dar-Hsin
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/56564046100731812325

碩士 === 國立臺北大學 === 國際財務金融碩士在職專班 === 99 === This study focuses on the Taiwan's listed companies the announcement effect of convertible bonds issuance. We study how the issuance events will affect its common stock price from 2000 to 2010, there are totally 712 events collected in 11 years. The conclusions are listed as follows: 1.Research evidence shows listed companies in Taiwan announced the issuance of convertible bonds, will convey the message to the market to reduce financial leverage and the issue of financing the same event on stock prices, such as issuing new shares. Before the event all companies will have a negative cumulative to the abnormal returns and abnormal returns. 2.And we compare the effect in different market (TAIEX & OTC). The empirical results also show that TAIEX companies issued convertible bonds in the 15 days before the announcement appears significant probability of negative returns firms are much higher than the OTC companies. In the event day after 15 days, both SCAAR are significantly negative, but the negative impact in stock return in the OTC companies is far greater than the TAIEX companies. It imply that after the event the announcement effect impact the company's stock price is far greater in the OTC companies than in the TAIEX companies. 3.Finally, when we compare the non-electronics companies and electronics companies. The stock price shocked in non-electronics companies are far greater than the electronics company whether listed in TAIEX or OTC companies, before the event or after the event. It display of non-electronics companies issued convertible bonds in the stock price announcement cumulative negative return is far greater than the electronics company.