Companies that are likely to report robust financial performance perform well (outperform the overall market) on the bourses before the announcements are actually available? If this is true, then one is surely looking at some kind of insider trading? I plan to do an event study on this, but maybe a little later in the year. Still learning the tools of doing research in economics and finance. Nevertheless, I decided to undertake a small test.
Three companies, in which I am currently invested - Ankur Drugs, WS Industries, and Jyoti Ltd, are expected to report robust financial performance for the quarter ended Sept'06. They will most likely report their numbers sometime after mid-October.
I will be monitoring share price of these companies over a months period, from 20-Sep to 2o-Oct. If these scrips end up posting significantly excess returns over the benchmark index, NSE Nifty, during this period, then there is a case of insiders releasing the information to interested market participants or buying shares themselves.
Cont...
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