The Effects of Business Magazine Recommendations on the Stock Prices in Turkey: Case of Para

Yıl 2017, Cilt: 17 Sayı: 1, 109 - 122, 15.03.2017

Dr. Kemal Eyüboğlu Assoc. Prof. Dr. Halil İbrahim Bulut

https://doi.org/10.18037/ausbd.415688

Öz

 The paper examines the effects of business magazines recommendations on the stock returns. For this purpose, it is analyzed whether investors can gain abnormal returns from the “buy” recommendations given by the weekly magazine “Para” cover the period February 2006-December 2012. The findings show that recommendations cannot help investors to earn abnormal returns from stocks. The reason of this might be the low circulation of business magazines in Turkey. In addition, it is determined that recommended stock performances are only 1.2% higher than the BIST-100 index performance in the long term. 

Anahtar Kelimeler

Abnormal return, stock recommendation, BIST, business magazine

Kaynakça

• Albert, Jr. R. and Smaby, T. (1996). Market Response to Analyst Recommendations in the ‘Dartboard’ Column: The Information and Price-Pressure Effects, Review of Financial Economics, 5, 59–74.
• Allen, David S., Awang-Damit, H. (1998). The Wall Street Journal Investment Dartboard, Flagstaff: Northern Arizona University, College of Business Administration, Working Paper.
• Barber, B. M., Loeffler, D. (1993). The Dartboard Column: Second-Hand Information and Price Pressure, Journal of Financial and Quantitative Analysis, 28, 273-284.
• Beneish, M.D. (1991). Stock Prices and the Dissemination of Analysts’ Recommendations, Journal of Business, 64, 393–416.
• Benesh, G., Clark, J. (1994). The Value of Indirect Investment Advice: Stock Recommendations in Barron’s, Journal of Financial and Strategic Decisions, 7(1), 35-43.
• BIST, http://borsaistanbul.com/veriler/verileralt/hisse-senetleri-piyasasi-verileri, 10.06.2013.
• BİST, http://borsaistanbul.com/en/corporate/aboutborsa- istanbul/about-us, 12.06.2013. Isyatırım, http://www.isyatirim.com.tr/ 10.06.2013.
• Brooks, R. M., Ajay P., Tie S. (2003). How the Equity Market Responds to Unanticipated Events, Journal of Business, 76, 109-133.
• Brown, S.J., Warner J.B., (1985). Using Daily Stock Returns: The Case of Event Studies, Journal of Financial Economics, 14, 3-31.
• Business Magazine of PARA. 26 February 2006-26 December 2010.
• Cervellati E. M., Ferretti R., Pattitoni, P. (2014). Market Reaction to Second-Hand News: Inside the Attention-Grabbing Hypothesis, Applied Economics, 46(10), 1108-1121.
• Davies, P. L., Canes, M. (1978). Stock Prices and the Publication of Second-Hand Information, Journal of Business, 51, 43-56. Dergi Pazarlama ve Planlama (DPP). http://www.dpp.com.tr/.
• Desai, H., Jain P. C. (1995). An Analysis of the Recommendations of the ‘Superstar’ Money Managers at Barron’s Annual Roundtable, The Journal of Finance, 50(4), 1257-1273.
• Fama E. F. (1970). Efficient Capital Markets: A View Theory and Empirical Work, The Journal of Finance, 25(2), 383-416.
• Ferreira, E. J., Smith, S.D. (1999). Stock Price Reactions to Recommendations in the Wall Street Journal ‘Small Stock Focus’ Column, The Quarterly Review of Economics and Finance, 39, 379-389.
• Graham, J. R. Koski, J. F., Loewenstein, U. (2006). Information Own and Liquidity around Anticipated and Unanticipated Dividend Announcements, Journal of Business, 79, 2301-2336.
• Greene, J., Smart, S. (1999). Liquidity Provision and Noise Trading Evidence from the ‘Investment Dartboard’ Column, The Journal of Finance, 54(5), 1885-1899.
• Kalay, A., Kronlund, M. (2014). The Market Reaction to Stock Split Announcements: Earnings Information After All, https://-www0.gsb.columbia.edu/-mygsb/-faculty/-research/pubfiles/-5520/stocksplits.pdf, 12.10.2014.
• Kerl, A., Walter A. (2007). Market Responses to Buy Recommendations Issued by Personal Finance Magazines: Effects of Information, Price-Pressure, and Company Characteristics, Review of Finance, 11, 117–141
• Kıymaz, H. (2001). The Effects of Stock Market Rumors on Stock Prices: Evidence from an Emerging Market, Journal of Multinational Financial Management, 11, 105-115.
• Lee, J. C. (1986). Information Content of Financial Columns, Journal of Economics and Business, 38, 27-39.
• Liden, E. R. (2006). Stock Recommendations in Swedish Printed Media: Leading or Misleading?, The European Journal of Finance, 12(8), 731-748.
• Liang, B. (1999). Price Pressure Evidence from the ‘Dartboard’ Column, The Journal of Business, 72(1), 119-134.
• Lin, C., F. Lin, Wang, Y. (2009). Can Investors Profit from the Stock Recommendations on the Journalism? Testing Conditional Heteroscedasticity in the Market Model, International Research Journal of Finance and Economics, ISSN 1450-2887, 33,111-118.
• Liu, P., Smith, D., Syed, A. (1990). Stock reaction to the Wall Street Journal’s Securities Recommendations, Journal of Financial and Quantitative Analysis, 25, 399–410.
• Liu, P., Smith, S. D., Syed, A. (1992). The Impact of Insider Trading Scandal on the Information Content of the Wall Street Journal’s ‘Heard On The Street’ Column, Journal of Financial Research, 15, 181–188.
• Mathur, I., Waheed, A. (1995). Stock Price Reactions to Securities Recommended in Business Week’s ‘Inside Wall Street, In the Financial Review, 30(3), 583-604.
• Menendez, S. (2005). Market Valuation of the Analysts’ Recommendations the Spanish Stock Market, Applied Financial Economics, 15, 509-518.
• Palmon, O., Sun, H.L., Tang, A. P. (1994). The Impact of Publication of Analysts’ Recommendations on Returns and Trading Volumes, The Financial Review, 29, 395–417
• Palmon D., Sudit F., Yezegel, A. (2009). The Value of Columnists’ Stock Recommendations, Review of Quantitative Finance and Accounting, 33(3), 209-232.
• Pettengill, G. N., Clark, J. M. (2001). Estimating Expected Returns in an Event Study Framework: Evidence from The Dartboard Column, Quarterly Journal of Business and Economics, 40, 3–21.
• Pieper, U., Schiereck, D., Weber, M. (1993). Die Kaufempfehlungen des “Effecten-Spiegel”-Eine empirische Untersuchung im Lichte der Effizienzthese des Kapitalmarktes”, Zeitschrift für betriebswirtschaftliche Forschung, 45, 487-509.
• Pound, J., Zeckhauser, R. J. (1990). Clearly Heard on the Street. The Effect of Takeover Rumors on Stock Prices. Journal of Business, 63(3), 291-308.
• Pruitt, S. W., Van Ness, B. F., Van Ness, R. A. (2000). Clientele Trading in Response to Published Information: Evidence From The Dartboard Column, The Journal of Financial Research, 23, 1–12.
• Sant, R., Zaman, M. A. (1996). Market Reaction to Business Week ‘Inside Wall Street’ Column: A Self-Fulfilling Prophecy, Journal of Banking & Finance, 20, 617-643.
• Schmid, M., Zimmerman, H. (2003). Performance of Second Hand Public Investment Recommendations, National Centre of Competence in Research Financial Valuation and Risk Management, Working Paper No. 101.
• Schuster, T. (2003). Fifty-Fifty Stock Recommendations and Stock Prices Effects and Benefits of Investment Advice in the Business Media, Leipzig University Working Paper, No. 03-01, http://www.tomschuster.de/EmpfehlungUS.pdf.
• Syed, A. A., Liu, P., Smith, S. D. (1989). The Exploitation of Inside Information at the Wall Street Journal - A Test Of Strong Form Efficiency, Financial Review, 24, 567–579.
• Turkish Journalists Association. (2008). Economy Press History, Publisher: Turkish Journalists Association Publicians (in Turkish).
• Turkuaz Dağıtım ve Pazarlama (TDP). http://www.tdp.com.tr/tr/home/
• World Federation of Exchanges (WFE). http://www.world-exchanges.org/statistics. 01.03.2014.
• Wright, D. W. (1994). Can Prices be Trusted? A Test of the Ability of Experts to Outperform or Influence the Market, Journal of Accounting, Auditing and Finance, 9, 307-323.
• Wuff, C. (2002). The Market Reaction to Stock Splits- Evidence from Germany, Schmalenbach Business Review, 54, 270-297.
• Yazıcı, B., Muradoglu, G. (2002). Dissemination of Stock Recommendations and Small Investors: Who Benefits?, Multinational Finance Journal, 6, 29-42.
• Yoon, P. S., Starks, L. T. (1995). Signaling, Investment Opportunities, and Dividend Announcements, Review of Financial Studies, 8, 995-1018.