Short Sellers and Managerial Equity Market Timing

2019 ◽  
Author(s):  
Suchismita Mishra ◽  
Özde Öztekin ◽  
Anisur Rahman
Keyword(s):  
Market Timing ◽  
Equity Market ◽  
Short Sellers ◽  
Equity Market Timing

scholarly journals Equity Market Timing Approach in IPO and Rights Issue of Companies in Indonesia

2019 ◽  
Vol 20 (3) ◽  
Author(s):  
Wihandaru Sotya Pamungkas ◽  
Tulus Haryono ◽  
Djuminah Djuminah ◽  
Bandi Bandi ◽  
Doddy Setiawan
Keyword(s):  
Market Timing ◽  
Equity Market ◽  
Rights Issue ◽  
Equity Market Timing

Equity market timing and capital structure: evidence on post-IPO firms in Indonesia

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dewi Ratih
Keyword(s):  
Capital Structure ◽  
Market Timing ◽  
Equity Market ◽  
Content Type ◽  
Corporate Capital ◽  
Corporate Capital Structure ◽  
Short Run ◽  
Practical Implications ◽  
Equity Market Timing

Purpose The purpose of this paper is to analyze and evaluate the impacts of equity market timing on corporate capital structure policies in Indonesia by apply Baker and Wurgler’s analytical approach to firms in Indonesia to see, first, if that approach applies to Indonesian firms and, second, if it can be generalized to other emerging markets. Design/methodology/approach This study will focus on capital structure policies based on Market Timing Theory in developing countries, which uses the panel data of companies listed in Indonesian Stock Exchange after IPO. The companies used as research object are 70 firms in the non-financial/non-banking sector with the observation period of 2000–2015. The period of measurement is five years after IPO. Using a past market value in which equity market timing is measured in two-time measurements, i.e. yearly timing and long-term timing to prove its persistence. Findings Consistent with equity market timing theory, the results suggest that firms tend to issue equities when their market valuations are relatively higher than their book values and their past market values are high. As a consequence, the firms become underleveraged or have their debts reduced in the short run. The results of long-term measurement on equity market timing do not appear to affect the firms’ capital structure decisions due to the firms’ relatively quick adjustments of optimal capital structures. The conclusion is that equity market timing is an important element in the short run but not in the long run. Research limitations/implications The results of this study describe how firms in Indonesia take advantage of temporary market share fluctuations through equity market timing in their capital structure policies before ultimately making adjustments to the directions they are targeting. Practical implications The use of equity market timing is more aimed at reducing the debt ratio and avoiding unfavorable conditions in the debt market, as well as taking advantage of the capital gains derived from the differences in their stock prices. This study also has practical implications on investment policies that need to consider the adaptation factor of the industrial environment when it comes to making capital structure decisions, including how the entity must take policy when uncertain economic conditions. Social implications Through the research behavior of capital structure more in-depth decision is expected to provide an overview for investors widely in determining investment policy. Thus, the investment strategy is more planned and can also anticipate unexpected conditions. Originality/value This research is the first study to analyze and to evaluate the impacts of equity market timing on corporate capital structure policies on post-IPO firms in Indonesia. This research is an empirical study that investigates the relevance of equity market timing considerations in the determination of debt-equity choices in the capital structure, included in the conditions of the global financial crisis.

Equity Market Timing dan Struktur Modal

2016 ◽  
Vol 9 (2) ◽  
Author(s):  
Nidya Fahima ◽  
Sri Maemunah Soeharto ◽  
Chorry Sulistyowati
Keyword(s):  
Capital Structure ◽  
Market Timing ◽  
Control Variable ◽  
Equity Market ◽  
Empirical Testing ◽  
Multiple Regressions ◽  
Dependent Variables ◽  
Negative Effect ◽  
Equity Market Timing

This study is an empirical testing of equity market timing and capital structure at firms which are doing IPO 2001 and 2002. The aims of this study are to test about the effect of equity market timing to capital structure and to test the persistency of the effect of equity market timing to firm’s capital structure in Indonesia. This study also used control variable, that asset tangibility, size and profitability. To analyze the data, this study used multiple regressions with SPSS 16.0 to test independent and dependent variables. The result suggest that the equity market timing has not significantly negative effect to the firms’ capital structure which used IPO 2001 and 2002 that are listed in BEI, and the effect of equity market timing to the firms’ capital structure are not persistent that the negative effect of equity market timing to the firms’ capital structure disappear within third years after IPO.

scholarly journals The Relationship between Earnings Management and Equity Market Timing

2021 ◽  
Vol 25 (6) ◽  
Author(s):  
Matheus da Costa Gomes ◽  
João Paulo Augusto Eça ◽  
Marcelo Botelho da Costa Moraes ◽  
Maurício Ribeiro do Valle
Keyword(s):  
Earnings Management ◽  
Market Timing ◽  
Careful Analysis ◽  
Seasoned Equity Offerings ◽  
Equity Market ◽  
Net Income ◽  
Equity Offerings ◽  
The Relationship ◽  
Profitability Ratios ◽  
Equity Market Timing

ABSTRACT Objective: this study aims to verify if companies that practice equity market timing have higher earnings management levels around the stock issue period. Method: we used a sample of 68 seasoned equity offerings (SEOs) in Brazil from 2004-2015. First, we ranked the sample among companies that used market timing (timers) behavior in the SEOs and those that did not (non-timers). Second, we estimated each company’s earnings management levels by the Modified Jones and Modified Jones with ROA models. Finally, we tested the relationship between earnings management and equity market timing using a linear regression model. Results: the results show that the timers managed earnings more intensively in the quarters around SEOs than the non-timers. This happens to increase net income and consequently improve profitability ratios. Therefore, to explore opportunity windows, managers can inflate accounting profit through accruals and influence the market’s ability to correctly price shares. Conclusion: Brazilian companies practice earnings management as a way of exploiting opportunity windows in the stock market. The conclusion reinforces the need for a careful analysis of the company’s profits by investors, analysts, auditors, and regulators while allowing efforts to avoid such practices through compliance, governance, and regulation.

scholarly journals Equity Issue and a Long-Term Effect of Equity Market Timing on Capital Structure

2018 ◽  
Vol 7 (3.21) ◽  
pp. 82
Author(s):  
Miswanto Miswanto ◽  
. .
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Market Timing ◽  
Equity Market ◽  
Term Effect ◽  
Distributed Lag ◽  
Long Term Effect ◽  
Speed Adjustment ◽  
Equity Market Timing

After the research about a short term effect of equity market timing on capital structure, the author is motivated to do research about a long term effect of equity market timing on capital structure of the firms which is listed in Indonesia Stock Exchange. The main problems on this research are to understand whether firms use equity market timing theory when issuing equity, and whether equity market timing has a long term effect on its capital structure. Then the purpose of this study is to examine the problems of this research. There are two hypothesis in this research. First, firms use equity market timing when issuing equity, and second, equity market timing has a long term effect on capital structure of firms in Indonesia. This research uses non-financial companies listed on the Indonesia Stock Exchange over the period of 2001 to 2011 as the sample. The data used in this research are panel data. The sample choosing is based on sample non-probability sampling using purposive sampling in form of judgment sampling. The research model used in this study is a distributed-lag regression model. The results of this research show that firms use equity market timing when issuing equity, and equity market timing does not have a long term effect on capital structure of firms in Indonesia. Thus, because there is deviation on the capital structure, then there is an indication that the firms will perform the process of speed adjustment towards the targeted capital structure, the optimum capital structure. 

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