Delistings of Secondary Listings: Price and Volume Effects
Rico Von Wyss
University of St. Gallen - Swiss Institute of Banking and Finance
affiliation not provided to SSRN
October 12, 2010
Financial Markets and Portfolio Management, Vol. 24, No. 4, pp. 395-418, 2010
Despite their growing importance in recent years, delistings of secondary listings have received very little attention. This article investigates whether a delisting is accompanied by any price or volume effects on the company’s primary exchange. We apply a standard event study methodology to analyze these effects. The total sample consists of 255 companies that either delisted from the SIX Swiss Exchange, the Sponsored Segment of the SIX, Deutsche Börse, or the Tokyo Stock Exchange. The results show no significant price effects, either around the announcement or around the effective delisting. Furthermore, the results vary considerably between subsamples. Prices tend to decline around announcement; however, the effect is not permanent. The effective delisting is preceded by declining prices, whereas the event itself has no influence. Overall, this initial decline appears to be permanent. In general, volumes seem to rise around the announcement as well as around the date of the delisting.
Keywords: Event Study, Secondary Listings, Delisting
JEL Classification: G12, G14, G39Accepted Paper Series
Date posted: December 20, 2010
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