Abstract:

The aim of this research to measure the effect of financial and non-financial disclosure on the companies’ stock prices. Analysis of  companies’ disclosures over a 2 years period is done and grouped into 20 categories. A sample of 3 companies per sector is taken, and large companies that had an effect on the market index were always considered being included in the sample of  each sector.  The total number of companies chosen in the sample were 36 representing around 41% of the total market.  A list of all announcements for all companies in the sample is tracked over a period of two years recording the date in which the announcement is announced and tracking the closing price for the stock in the 10 days preceding and following the announcement date.

For companies that announced profits or high losses (exceeding 10% of the previous period’s net results), the results revealed that there is a significant difference between the average stock price and the price of the stock on the date of the announcement, which indicates that there is an effect of the announcement on the price. However, there is no significant difference between the average stock price around the period of the announcement and the date of the announcement if the losses are not so big (less than 10% of previous period’s net results).

It is also revealed that there are four types of announcements that had an effect on the stock prices as the average stock price differed significantly than its price on the date of the announcement. Those announcements are announcing dividends or stock dividends; distributing the dividends; Call for a general assembly, or announcing that a quorum is not reached at a general assembly. It is concluded that there are other factors that affected the stock prices other than the financial and non-financial disclosures as most of the announcement showed that it does not affect the stock prices.

Recommendation was to continue investigating the relationship between the financial indicators and the stock prices.