A Qualitative Perspective On Earnings Announcement, Stock Return Behaviour And Investment Strategies; A Case Study Of Psx

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Muhammad Ibrahim Khan , Syed Haider Khalil , Syed Mohsin Ali Shah , Fahad Sultan , Muhammad Jehangir , Adnan Ahmed , Wisal Ahmad


Purpose of the study: This article addressed the qualitative perspectives on the information content of earnings announcements, stock return behavior, and investors' tactics in the Pakistan stock exchange (PSE) case.

Methodology: Interviews contextualize the quantitative findings in real-world circumstances and help analyze the intricacies arising from the quantitative findings. The semi-structured questionnaire gathers information from a convenient sample of 20 investors (10 institutional and ten private investors).

Main findings: The results of the interviews lead to several conclusions. First, the stock produces much momentum before and after earnings announcements. Particularly in positive news, stock show gain before the event day. Second, despite complaints from individual investors about information leaks, institutional investors overwhelmingly reject them. The reason stated by the interviewee for market momentum is not just the kind of announcement but also the mood of market participants as supported by behavioral finance. Third, in keeping with the literature study, most participants rejected the premise of efficient market theory. Institutional investors think that trading based on the qualitative and fundamental characteristics of the companies might help us achieve substantial returns

Implications of the study: The study contributes to literature and methodology in a manner not previously explored. The study contains background information on the interviews and a description of the sample information. It further examines the investors' thoughts regarding the effect of earnings disclosure on the stock returns, sources of information about the stock, and their investment methods.

Novelty/Originality of the study: This study is the first of its kind that sought the view of Pakistani investors about the information contents of the earnings announcement, their investment strategies, and their view on PSX market efficiency.

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