Economics, Econometrics and Finance
4 years ago

Stock prices in Nigeria react negatively to positive earnings surprises.

International Journal of Financial Research
Earnings Surprises and Stock Price Reactions of Quoted Companies in Nigeria
Malthus Timothy Ekpe, Rosemary Obasi, Sadiq Rabiu Abdullahi, Umar Aliyu Mustapha, Norfadzilah Rashid

Paper Summary

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The article examines how stock prices in Nigerian companies react to unexpected changes in earnings. They studied 64 companies across different sectors from 2013 to 2017. Positive earnings surprises led to lower stock prices, while negative surprises caused stock prices to rise. This suggests that good news can sometimes lead to bad stock reactions, and bad news can lead to positive stock reactions. The researchers recommend better regulation of the stock market to improve efficiency and boost investor confidence in company profits.