Earnings Announcements and Competing Information: the Indonesian Evidence

Dedhy Sulistiawan • Jogiyanto Hartono • Eduardus Tandelilin • Supriyadi Supriyadi
Journal article Journal of Indonesian Economy and Business • January 2014

Abstract

The main purpose of this study is to provide empirical evidence of the relationship betweeninvestors' responses to two events, which are, (1) earnings anouncements, and (2) technicalanalysis signals, as competing information. This study is motivated by Francis, et al. (2002),whose study used stock analyst's recommendations as competing information in the U.S stockmarket. To extend that idea, this study uses technical analysis signals as competing informationin the Indonesian stock market. Using Indonesian data from 2007-2012, this study shows thatthere are price reactions on the day of a technical analysis signal's release, which is prior toearnings announcements. It means that investors react to the emergence of competinginformation. Reactions on earnings announcements also produce a negative relationship withthe reaction to a technical analysis signal before an earnings announcement. This study givesevidence about the importance of technical analysis as competing information to earningsannouncements.

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Journal

Journal of Indonesian Economy and Business

The Journal of Indonesian Economy and Business (JIEB) disseminates research results on the Indone... see more