The market response to exploration, resource and reserve announcements by mining companies: Australian data
This is the first paper to study the market response to “Joint Ore Reserve Committee” –compliant announcements made by Australian mining firms. Results from an event study based on matched firms suggest that these announcements are highly value relevant, with the market reacting in a significantly p...
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Published in | Australian journal of management Vol. 38; no. 2; pp. 311 - 331 |
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Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
London, England
SAGE Publications
01.08.2013
Sage Publications Ltd |
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Abstract | This is the first paper to study the market response to “Joint Ore Reserve Committee” –compliant announcements made by Australian mining firms. Results from an event study based on matched firms suggest that these announcements are highly value relevant, with the market reacting in a significantly positive way to both exploration and resource announcements. Larger abnormal returns are found to accrue to smaller firms, to firms that use positive adjectives in their announcement headlines and to firms whose announcements imply larger percentage increases in resource levels. We also find evidence of markets anticipating both exploration and resource announcements a few days before they are released, which may be suggestive of some insider trading. |
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AbstractList | This is the first paper to study the market response to “Joint Ore Reserve Committee” –compliant announcements made by Australian mining firms. Results from an event study based on matched firms suggest that these announcements are highly value relevant, with the market reacting in a significantly positive way to both exploration and resource announcements. Larger abnormal returns are found to accrue to smaller firms, to firms that use positive adjectives in their announcement headlines and to firms whose announcements imply larger percentage increases in resource levels. We also find evidence of markets anticipating both exploration and resource announcements a few days before they are released, which may be suggestive of some insider trading. This is the first paper to study the market response to "Joint Ore Reserve Committee" -- compliant announcements made by Australian mining firms. Results from an event study based on matched firms suggest that these announcements are highly value relevant, with the market reacting in a significantly positive way to both exploration and resource announcements. Larger abnormal returns are found to accrue to smaller firms, to firms that use positive adjectives in their announcement headlines and to firms whose announcements imply larger percentage increases in resource levels. We also find evidence of markets anticipating both exploration and resource announcements a few days before they are released, which may be suggestive of some insider trading. [PUBLICATION ABSTRACT] |
Author | Danny Yeung Matthew Grosse Ron Bird |
Author_xml | – sequence: 1 givenname: Ron surname: Bird fullname: Bird, Ron email: Ron.Bird@uts.edu.au organization: Paul Woolley Centre for Capital Market Dysfunctionality, Finance Discipline Group, University of Technology Sydney, Australia; The Finance Department, School of Management, University of Waikato, New Zealand – sequence: 2 givenname: Matthew surname: Grosse fullname: Grosse, Matthew organization: Accounting Discipline Group, University of Technology Sydney, Australia – sequence: 3 givenname: Danny surname: Yeung fullname: Yeung, Danny organization: Paul Woolley Centre for Capital Market Dysfunctionality, Finance Discipline Group, University of Technology Sydney, Australia |
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Cites_doi | 10.1108/13581980810888877 10.1111/j.1540-6261.2010.01625.x 10.2307/2490730 10.1016/j.resourpol.2007.08.001 10.1111/j.1540-6261.1991.tb03743.x 10.1177/031289620002500107 10.1111/j.1835-2561.2011.00147.x 10.1016/j.resourpol.2011.07.004 10.1016/S0304-405X(96)00890-2 10.1111/j.1835-2561.2010.00119.x 10.1111/j.1540-6261.2012.01726.x 10.1111/0022-1082.00042 10.1177/031289620503000202 10.1111/j.1911-3846.1994.tb00448.x 10.1177/031289628000500203 10.1016/S0927-538X(02)00096-3 10.5547/ISSN0195-6574-EJ-Vol29-No4-3 10.1177/031289620202700202 10.1016/S0148-6195(99)00033-8 |
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References | O’Shea, Worthington, Griffiths 2008; 16 Clinch, Magliolo 1992; 67 Ball, Brown 1980; 5 Barber, Lyon 1997; 43 Ferguson, Crockett 2003; 1 How 2000; 25 Ritter 1991; 46 Ferguson, Grosse, Kean 2011b; 59 Twite 2002; 27 Magliolo 1986; 24 Tufano 1998; 53 Ferguson, Clinch, Kean 2011a; 56 Loughran, McDonald 2010; 66 Poskitt 2005; 30 Kreuzer, Etheridge, Guj 2007; 32 Mohn 2008; 29 Ferguson, Scott 2011; 36 Spear 1994; 11 Harris, Ohlson 1990; 65 Solomon 2011; 67 Brown, Burdekin 2000; 52 bibr3-0312896212473401 bibr8-0312896212473401 bibr16-0312896212473401 bibr17-0312896212473401 bibr29-0312896212473401 bibr7-0312896212473401 bibr25-0312896212473401 bibr9-0312896212473401 bibr21-0312896212473401 bibr26-0312896212473401 bibr13-0312896212473401 bibr18-0312896212473401 bibr22-0312896212473401 bibr4-0312896212473401 bibr14-0312896212473401 bibr19-0312896212473401 bibr27-0312896212473401 Magness V (bibr20-0312896212473401) 2010 bibr5-0312896212473401 bibr10-0312896212473401 bibr1-0312896212473401 Harris T (bibr12-0312896212473401) 1990; 65 bibr23-0312896212473401 bibr15-0312896212473401 bibr11-0312896212473401 Clinch G (bibr6-0312896212473401) 1992; 67 bibr28-0312896212473401 bibr24-0312896212473401 bibr2-0312896212473401 |
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Snippet | This is the first paper to study the market response to “Joint Ore Reserve Committee” –compliant announcements made by Australian mining firms. Results from an... This is the first paper to study the market response to "Joint Ore Reserve Committee" -- compliant announcements made by Australian mining firms. Results from... |
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SubjectTerms | Abnormal returns Australian Securities Exchange Event study Financial statements Insider trading Market reaction Mining Mining industry Resource exploration Securities Studies |
Title | The market response to exploration, resource and reserve announcements by mining companies: Australian data |
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