HONG KONG, May 4 /PRNewswire-Asia/ -- The Hong Kong Institute of Chartered Secretaries has commissioned the Hong Kong University of Science and Technology to carry out an empirical investigation of the share price performance subsequent to directors' dealing in shares of their companies for the period from 2003 to 2008. Professor Kalok Chan, Synergis-Geoffrey YEH Chair Professor of Finance and Director of Centre for Fund Management heads this study.
Mrs Natalia Seng, President of the Institute, explained the reasons behind this study, "There have been a lot of debates whether directors' trade based on their insider information before the results announcements. We want to look at it objectively and what better way to do this than going back to the data. The Institute is grateful for Professor Chan's support in this study."
The study finds evidence that directors' dealings are accompanied by abnormal share price performance. However, the study also finds that (i) the abnormal price performance is observed mostly for small firms and for directors' sales (rather than director's purchases); (ii) the abnormal price performance is observed even for sales occurring within 3-4 months before the results announcement and also for sales not preceding the results announcement.
Mr Phillip Baldwin, Chief Executive of the Institute added that the Institute has sent the study to the government and the regulators.
For a full version of the study report, please visit:
http://www.hkics.org.hk/media/publication/attachment/PUBLICATION_A_2309_Stock_price_performance_subsequent_to_directors'_dealing.pdf
(Note: If the URL above wraps to a second line, paste both lines into the browser.)
About The Hong Kong Institute of Chartered Secretaries
The Hong Kong Institute of Chartered Secretaries (HKICS) is an independent professional body dedicated to the promotion of its members' role in the formulation and effective implementation of good governance policies in Hong Kong and throughout China as well as the development of the profession of Chartered Secretary.
HKICS was first established in 1949 as an association of Hong Kong members of the Institute of Chartered Secretaries and Administrators (ICSA) of London. It became a branch of ICSA in 1990 before gaining local status in 1994 and today has more than 5,000 members and approximately 2,500 students.
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