STOCK MARKET REACTION TO DIVIDEND ANNOUNCEMENT IN SAUDI ARABIA

23rd November 2016 12:00 pm - 1:00 pm Ahlia University – Class 11

Speakers: Prof. Jasim AlAjmi

Professor Jasim Al-Ajmi presented a working paper on market reaction to dividend announcement in Saudi Arabia. The study’s results are, to a certain degree, different from those reported by other studies. First, we found that on the announcement date, regardless of the firms announced dividend trend, the number of firms that increase their dividend values exceeds those whose dividend value falls. Second, our findings do not support the hypothesis that in order for a dividend change to signal useful information in regards to price formation, they should be taxed at higher rates than capital gains. Finally, the market reaction to dividend decreases and contradicts the results reported elsewhere and a priori expectations. We found a positive, albeit insignificant, market reaction.