The Designation and Removal of Trustee Stock Status: Wealth Effects

33 Pages Posted: 4 Jul 2004

See all articles by Angie Low

Angie Low

Nanyang Technological University - Division of Banking & Finance

David K. Ding

Singapore Management University - Lee Kong Chian School of Business

Abstract

This study investigates the impact of trustee stock status announcements on shareholders' wealth in Singapore. An event study methodology is used to ascertain the abnormal returns around the announcement day. The results show that there is a positive and permanent wealth effect on trustee stocks resulting from designation announcements. Conversely, when trustee stocks lose their status, the significant negative abnormal returns suggest that shareholders' wealth is adversely affected. This reaction, however, appears to be a temporary phenomenon and is not simply a mirror image of designation announcements. The differences in the underlying regulatory structures partially explain the findings.

Suggested Citation

Low, Angie and Ding, David K., The Designation and Removal of Trustee Stock Status: Wealth Effects. Journal of Business Finance & Accounting, Vol. 31, No. 3-4, pp. 505-538, April 2004. Available at SSRN: https://ssrn.com/abstract=553247

Angie Low

Nanyang Technological University - Division of Banking & Finance ( email )

Singapore, 639798
Singapore

David K. Ding (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

50 Stamford Road
Singapore, 178899
Singapore
+65 6828-0245 (Phone)

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