The relationship between annual earnings and share returns on the JSE Securities Exchange

Kornik, David

The relationship between annual earnings and share returns on the JSE Securities Exchange

Master Thesis

2005

Publisher

University of Cape Town

Department

College of Accounting

Faculty

Faculty of Commerce

Abstract

This research study investigates whether the relationship between accounting earnings and share returns observed predominantly in New York Stock Exchange (“NYSE”) studies also holds on the modern-day JSE Securities Exchange (“JSE”). Since the JSE is a relatively small stock exchange in comparison to the NYSE, with substantially different characteristics, the nature of the relationship may differ between the two exchanges. The study finds empirical evidence that this relationship between earnings and share returns is the same. As on the NYSE, accounting earnings disclosures in South Africa are found to have significant information content. Evidence is obtained which shows that accounting earnings do capture a significant portion of the information reflected in share returns, although they are not a timely source of information.

Description

Includes bibliographical references (leaves 91-99).

Keywords

Financial Accounting

Reference:

Collections

Masters

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