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Profit Warnings And Stock Returns: Evidence From Moroccan Stock Exchange

Author

Listed:
  • Ilyas El Ghordaf

    (Université Mohamed 1 Oujda MAROC)

  • Abdelbari El Khamlichi

    (UCD - Université Chouaib Doukkali, IAE - UCA - Institut d'Administration des Entreprises - Clermont-Auvergne - UCA - Université Clermont Auvergne)

Abstract

There is an important literature focused on profit warnings and its impact on stock returns. We provide evidence from Moroccan stock market which aims to become an African financial hub. Despite this practical improvement, academic researches that focused on this market are scarce and our study is a first investigation in this context. Using the event study methodology and a sample of companies listed in Casablanca Stock Exchange for the period of 2009 to 2016, we examined whether the effect of qualitative warning is more negative compared to quantitative warnings in a short event window. Our empirical findings show that the average abnormal return on the date of announcement is negative and statistically significant. The magnitude of this negative abnormal return is greater for qualitative warnings than quantitative ones.

Suggested Citation

  • Ilyas El Ghordaf & Abdelbari El Khamlichi, 2021. "Profit Warnings And Stock Returns: Evidence From Moroccan Stock Exchange," Post-Print hal-03420284, HAL.
  • Handle: RePEc:hal:journl:hal-03420284
    Note: View the original document on HAL open archive server: https://uca.hal.science/hal-03420284
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    References listed on IDEAS

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    2. François Aubert & Waël Louhichi, 2015. "Analyst earnings forecast revision activity around profit warnings across four European countries," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 16(1), pages 58-87, May.
    3. George Bulkley & Renata Herrerias, 2005. "Does the Precision of News Affect Market Underreaction? Evidence from Returns Following Two Classes of Profit Warnings," European Financial Management, European Financial Management Association, vol. 11(5), pages 603-624, November.
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    More about this item

    Keywords

    Profit warnings; event study; returns; disclosure; Morocco; stock exchange JEL Classifications: G14;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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