Rights offering announcements and the efficiency of the Kuwaiti market

ABSTRACT

This study tested the semi-strong form of the EMH in the Kuwait Stock Exchange. This test is conducted by examining the behaviour of stock prices around the date of rights offering announcements. Based on a sample of 69 rights offerings over the period 2004–2013, we find that prices incorporate new information within an average of 4 days. We take this observation as evidence that the Kuwaiti market is semi-strong efficient.

KEYWORDS:

• EMH
• semi-strong
• rights issues
• event study
• emerging market

JEL CLASSIFICATION:

• G12
• G14
• G32

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

This work was supported and funded by Kuwait University Research [grant number IF01/15].