Dividend Announcements and Stock Market Reaction: Further Evidence

Abstract

This paper examines stock market reactions to announcements of dividend ses and decreases in Bursa Malaysia. The data consist of all the firms that inced dividend increases or decreases from 2001 to 2005. Using an event iy approach, the evidence shows that dividend increase announcements are. positively by investors, while there is some evidences suggesting investors negatively prior to dividend decrease announcements. The observations are separated into the magnitude of dividend change and income change. This also separates the observations into government linked companies (GLCS) non GLCs. For the income-increase group of GLCs and non GLCs, the buy- hold abnormal return is positive and statistically significant in the post- increment period.