Corporate Takeover and Market Efficiency The Malaysian Experience

Fauzias Mat Noor

Abstract


The purpose of this study is to test the efficiency of the Malaysian stock market reaction with regard to acquisition announcement. The result on insignificant cumulative average residuals from day -1 to + I for bidders indicates that the Kuala Lumpur Stock Exchange market is reasonably efficient in its response to takeover bids that are subsequently successful. But, with the bidder's highest cumulative • average residuals reported on the announcement date, and declines significantly immediately after the announcement indicates that the Kuala Lumpur Stock Exchange is reasonably efficient in terms of the speed of information, hut it does not accurately reflect the true implication on the value of the shares. This may also suggest that the bidder has over estimated the value of the target which may result in paying too much for its assets. The increase in share prices prior to the announcement may be due to the information leakage to the market or to buying support by the bidder which forcing the prices up before the announcement.

ABSTRAK

Tujuan kajian ini ialah untuk menguji kecekapan pasaran saham Malaysia bertindak terhadap pengumuman tentang pengambilalihan Keputusan yang didapati ialah sisa purata positif adalah tidak ketara pada tarikh pengumuman bagi syarikat sasaran dan sisa purata adalah juga tidak ketara dari hari -1 hingga hari +1 bagi syarikat penawar harga. Keputusan tadi menunjukkan bahawa pasaran saham Malaysia adalah agak cekap dari segi tindakbalasnya terhadap tawaran pengambilalihan yang berikutnya berjaya. Walaupun sisa purata kumulatif syarikat penawar aclalah pada tahap tertinggi pada tarikh pengumuman dan kemudian menurun secara yang ketara dengan tiba-tiba selepas itu, yang menunjukkan bahawa pasaran saham Malaysia adalah agak cekap dari segi kecepatan menyerap maklumat, namun ia tidak mencerminkan implikasi sebenar maklumat terhadap nilai saham. Ini juga mungkin membawa maksud bahawa penawar membuat anggaran berlebihan terhadap nilai sebenar syarikat sasaran yang mengakibatkan pembayaran yang berlebihan bagi asetnya. Kenaikan pada harga saham sebelum pengumuman dibuat mungkin disebabkan oleh pembocoran maklumat kepada pasaran ataupun disebabkan oleh sokongan pembelian oleh penawar yang menyebabkan harga naik sebelum pengumuman dibuat.


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