Effects Of Information And Price Adjustments On The Market

The stock price of Hong Kong Stock Exchange (0388) reached HK$80 in early 2007. Due to the company's peculiar business, the company decided to do a stock split and seek market's opinion, causing much market discussion.This article attempts to do a case study to explain the stock split and the news of stock split having effects on the market and the stock price of 0388.As the efficient market assumption describes how news affects the price levels, this is a useful tool for theory analysis, and we can observe the effects various types of information have on the market and individual stock.News will definitely have an effect on market price. But the difficulty lies in separating the noise, efficient market assumption states that the market price entirely reflects the effects of the news.Thus, case study analysis (FFJR) becomes a very important analysis method, it uses market profitability data to analyze the effects of a particular event on the market.This article has selected 4 Hong Kong listed companies which has been evaluated for case study samples.