Stock prices drop significantly after bonus issue announcements in Colombo Stock Exchange.
The study looked at how stock prices reacted to bonus issue announcements in the Colombo Stock Exchange from 2003 to 2007. They found that before the announcements, stock prices dropped significantly. On the announcement day, there was a negative abnormal return of 0.82%. This drop was seen in both financial and non-financial sectors, showing that the Colombo Stock Exchange is semi-strong efficient.