Luxury goods in China Essay

Life is getting harder for purveyors of luxury in China, but the growth prospects are still fabulous Jun 8th 2013 | SHANGHAI |From the print edition â€Å"IT WAS AN AMAZING GOLDEN AGE,† REFLECTS GUILLAUME BROCHARD OF QEELIN, A CHINESE jeweller. From 2007 to 2011 many luxury-goods firms enjoyed double-digit annual growth in China, which became their most important market. The first blows came last year, with an economic slowdown and jitters about the political transition. Now, a crackdown on corrupt gift-giving and a populist backlash against ostentation have added to the woes. The outlook for luxury-goods firms appears to have dimmed. Internet users have posted incriminating pictures, for example of poorly paid bureaucrats wearing suspiciously pricey watches, which have caused heads to roll. Mobs have also disrupted banquets deemed to be too lavish, on occasions forcing officials to their knees to beg for forgiveness. This has traumatised some purveyors of conspicuous consumption. Beijing Xiangeqing, an upmarket catering outfit that is usually highly profitable, plunged into the red last quarter. Sales of shark fin, the key ingredient of a soup served at fancy dinners, are down by around 70% year-on-year. Imports of bottles of Bordeaux costing more than $800 have collapsed. But look beyond the lavish public banquets and a more complicated picture emerges —AND NOT JUST BECAUSE DEVIOUS OFFICIALS ARE NOW THROWING THEIR EXTRAVAGANT PARTIES IN private. It is true that some luxury-goods firms are grappling with slowing demand in China: imports of Swiss watches, for example, fell 24% year-on-year in the first quarter of 2013. But Andrew Keith of Lane Crawford, a high-end department store that first opened in Hong Kong in 1850, reports no slowdown at his stores there or in Beijing. Burberry, a British fashion brand, enjoyed sales growth in China of about 20% in the year to March. Sales of private jets in China are still soaring. So what is really going on? It seems that China remains the biggest prize in the luxury industry, but the low-hanging fruit is gone. Luxury firms must now venture beyond the coastal cities where they have made easy fortunes, cultivate new types of customers and market niches, and experiment with new business models. It will be worth the effort. Despite the recent troubles, Bruno Lannes of Bain & Company, a consultancy, insists that â€Å"Chinese have become, and will remain for a long time, the most important luxury consumers. † His firm estimates that luxury sales in greater China (which includes Taiwan, Hong Kong and Macau) will grow by 6-8% this year, ? 2 ? ? 3 ? to exceed $35 billion, making it a luxury market second only to America. But even that does not tell the full story. China’s rich are travelling more and farther, and do lots of luxury shopping on their travels, especially in Europe, whose weak currencies encourage Chinese visitors to splash out. Measured by the nationality of the buyer, China is now the world’s biggest luxury market, and growing fast (see chart). Last year mainland Chinese took 83m foreign trips, up 18. 4% on 2011. Global Blue, a big tax-free-shopping firm, says its refunds to Chinese shoppers shot up by 58% last year to more than 24 billion yuan ($3. 9 billion). To make the most of this trend, firms need to rejig their shops worldwide. They need Mandarin-speaking assistants, VIP rooms big enough to accommodate large tour parties and payment systems that can handle Chinese credit cards. Philippe Leopold- Metzger, who runs Piaget, a Swiss watch and jewellery brand, says he regards the firm’s outlets in China itself more as showcases than profit-earners: half of his global business comes from mainlanders, but they mostly buy while on foreign trips. That said, there are still plenty of opportunities to expand sales inside China. Kent Wong, managing director of Chow Tai Fook, the world’s largest jeweller, with over 1,700 sales outlets on the mainland, says their takings are continuing to grow. Any weakness is seen chiefly in coastal cities exposed to China’s struggling exports. In the interior, where locals are not yet used to foreign shopping jaunts, â€Å"middle-class incomes are still rising. † Luxury firms are having to adapt to this fragmentation in the Chinese market. Whereas flashy â€Å"bling† still sells to the new money in smaller, interior towns, globetrotters from the coastal cities are returning from their travels as more knowledgeable and demanding shoppers. Armando Branchini of Fondazioni Altagamma, the Italian confederation of luxury brands, says such customers look for more subtle and modern designs. Digitally challenged Over two-thirds of Chinese use the internet to research brands, but most luxury firms have pitiful digital strategies. One study found that luxury websites take four times as long to load in China as elsewhere (because most firms do not put servers inside China’s Great Firewall, which slows access to foreign sites) and rarely offer yuan prices or purchasing options. Mobile commerce is growing in China, but few luxury firms’ websites are optimised for mobile devices. As the tastes of rich Chinese evolve, business models combining local flavour and global savvy are emerging. Qeelin, recently bought by Kering, a French luxury house formerly known as PPR, is one example. Another is Shang Xia, a homeware label inspired by local crafts, launched in 2010 by Hermes, also of France. Under orders ? 3 ? ? 3 ? from the government in Beijing, foreign carmakers and their Chinese joint-venture partners are creating new, local brands: BMW will produce cars with the Zhinuo badge, and Mercedes will market new models under the Denza brand. So far, Chinese luxury buyers, especially of cars, have turned up their noses at domestic brands. But the hybrid brands may prompt them to reassess the â€Å"Made in China† label, says Michel Gutsatz of the China Europe International Business School. At a conference the school recently held, He Haiming of CCTV, China’s dominant national broadcaster, pointed out that â€Å"Made in Germany† and â€Å"Made in Japan† were also once derided, but are now marks of quality. As Europe’s luxury-goods firms grow from low-volume exclusivity to semi-industrial scale—thanks in large part to China’s voracious appetite for their wares—Mr Gutsatz argues that they â€Å"must think of economics† and consider manufacturing in China itself instead of mainly exporting to it. The business of getting wealthy Chinese to open their wallets is bound to go on evolving, but the opportunities for growth make it irresistible. From the print edition: Business.

Postal Service Case Analysis

Postal Service Case Analysis The United States Postal Service receives no tax dollars from the federal government for their operations. They are a self-supporting agency, using the revenue from the sales of postage and postage-related products to pay expenses. Each year the postal service delivers 212 billion pieces of mail to over 144 million homes, businesses and Post Office boxes in virtually every state, city and town in the country, including Puerto Rico, Guam, the American Virgin Islands and American Samoa. Delivering this much mail, requires managing almost 800,000 employees and contractors, 38,000 facilities and 214,000 vehicles. Managing 214,000 vehicles to deliver an abundance of mail, it is no wonder that accidents happen but many can be avoided. According to www. usps. com, in 2005, the Postal Service incurred $49 million for traffic accidents and in 2006 reported 100,000 motor vehicle accidents. How can the United States Postal Service reduce the annual number of motor vehicle accidents thus saving money? The three options to address the issue of reducing the amount of motor vehicle accidents per year are as illustrated below. One option is to offer an accident-free incentive plan to drivers. Regardless of fault, if a driver remains accident-free during the course of a year, they will receive a bonus. The bonus amount will fluxuate each year depending on the dollar amount saved on accident reductions that year. So for example, if the Postal Service saves $10 million in 2007, the bonus amount would be a certain percentage of the $10 million. Another option is to offer annual driver training. Each year, drivers would have to attend a drivers training in-service in order to continue driving a motor vehicle for the Postal Service. The in-service would be a hands-on training session where the drivers would need to pass a road course. Lastly, the Postal Service can execute a more stringent driving record policy. Upon hire, the candidate would need to provide a certified driving record as a condition of employment. On an ongoing basis, the Postal Service would run annual driving record checks. If any new traffic violations appear, depending on the severity of the violation, the employee would be transferred to a position that does not require driving or their employment would be separated. The time it would take to implement the accident-free incentive option would be 6-12 months. The policy would need to be developed and approved, then an effective date would need to be determined, it could be the first of the year or the beginning of the fiscal year for the Postal Service. The cost and ease of implementation would be fairly straightforward, just the cost and resources utilized to develop the policy. The annual bonus payout wouldn’t be determined until the savings from the year is figured out. Once the savings is figured out, the bonus would be a percentage of that amount and of course, each year that amount would vary. Having an incentive for drivers to take the time and think about their actions while driving, could result in a high return on investment for the Postal Service. If traffic accidents decrease even the slightest bit, the cost savings could be hundreds of thousands of dollars. The time and cost to implement the annual drivers training option would be more lengthy and expensive. The Postal Service would need to locate a facility in each state to hold the driver training and hire qualified trainers. Providing more intensive driver training could also result in decreased traffic accidents for the Postal Service. The problem with this option is not only is it costly, employees may not take the training seriously. There have been many trainings that I have attended where employees tend to goof-off and not take it as seriously as they should. The last option regarding implementing driving record checks would be relatively inexpensive. Upon hire, the candidate would absorb the initial cost of obtaining their driving record but going forward on annual basis, the Postal Service would be responsible for the cost. A driving record costs around $10. 00 and with an estimated 214,000 drivers, the annual cost would be around $2,140,000. This option seems costly; however, if the traffic accidents decrease as a result of the checks, the amount of money saved would more than the Postal Service pays for the driving record checks. To conclude, the option I think would be best is the accident-free driver’s incentive plan. When a company offers an incentive to earn more money, employees seem to respond. Not only will employees take this option seriously, the Postal Service would see a dramatic decrease in traffic accidents. By putting the onus on employees and providing them a bonus opportunity they are more likely to make better decisions when driving. Source: www. usps. com OptionsCriteria 1Criteria 2Criteria 3Criteria 4 Time to implementCostEase of ImplementationReturn on Investment Accident-free incentive plan6-12 monthsVaries depending on cost savings on accidentsRelatively easy-policy development and researchPotentially high-money talks to employees Annual Driver TrainingMore lengthyExpensive-need to buy/rent land and/or building plus equipment, trainer, etc. DifficultPotentially low-employees may not take training as seriously More stringent driving record checksImmediate~$2-3 million per yearEasyUnknown-Could lose employees due to results of check

[Astronomy subject] Assignment Essay Example | Topics and Well Written Essays - 250 words

[Astronomy subject] Assignment - Essay Example This asteroid has an approximate diameter of 270 meters. Initial observations of the asteroid suggested a small chance (up to 2.7%) that the asteroid may strike earth probably on 13th April 2029. NASA has predicted 1 in 300 chance of the asteroid striking the Earth. But the results may change based on the day to day observations by NASA. With the development of new technologies, it may be possible to demolish any object which could be a threat. But this may lead to fragments of an asteroid striking the Earth. A thorough research should be carried out to understand the negative impacts of such an action. The motion or the orbit of an asteroid depends on many factors such as the gravitational pull of other planets or a satellite’s pull from solar wind. So it may be difficult to divert an asteroid and change its orbit. Asteroid 2011 CQ1 is a small 1 meter diameter asteroid which made a record close approach on February 4 2011. The Center for Meteorite Studies states that it passed within a range of 5480 KM over a region in the mid-pacific. It is the closest non impacting asteroid in the NASA asteroid Catalogue till

Develop a strategic human ressources plan for a winery Coursework

Develop a strategic human ressources plan for a winery - Coursework Example Specialized departments should be created to cater to specific functional areas. Mabel Creek can also expand its business by developing capability to produce, bottle and market its own white wine. Reaching out to the wholesale market will not only make the business more competitive but can also bring more business and strengthen brand name. Employees especially the general manager seems to be overworked. Working seven days a week and being involved in each and every aspect of the winemaking process is not helping the business at all. The GM needs to focus on managerial issues and business expansion. Specialized departments such as the HR and marketing department needs to be created to manage functional activities smoothly and efficiently. Lack of a specified hierarchy or chain of command can cause confusion as to whom to report to and what to do in a specific situation. The business is understaffed which means that an untended problem due to lack of specialized work areas could lead to a catastrophic malfunction of the entire process. After conduction of a formal Training Need Assessment by an expert the employees should be provided with adequate training. The GM should be trained in areas of strategic and business management, business expansion and change management. The organization should be formally given a formal structure and should have departments like marketing, administration, HR, manufacturing, sales, accounting and finance, inventory and equipment, and a wine and fruit department. Human resource forecasts should be conducted to predict the number of seasonal works needed. These forecasts should be used to hire seasonal workers by the HR department. Furthermore succession planning and training need analysis are imperative to develop current employees for challenges of the future. The employees need to have specific areas of specialization where they should be trained to perform a specific job according to a job

English Legal Methods Essay Example | Topics and Well Written Essays - 3000 words

English Legal Methods - Essay Example The most authoritative decision is the [1996] AC 563 as it is the House of Lord’s decision. The House of Lord is the highest court in England. The doctrine of judicial precedent states that the decisions of this court are binding on the lower courts. Question 3 [6 marks available in total] What were the facts giving rise to Mr R’s criminal trial and what was the outcome of that trial? Mr R had a relationship with the mother of four children. They gave birth to two children and the other two were from a previous marriage. The father was Mr H, and C was the eldest daughter, who alleged that in September 1993, Mr R had raped her continuously when she was between 7 and 8 years. This continued for over 5 years. Mr R was then charged with rape. He was tried in October 1994. The allegation involved four charges of rape. The main witness in this case was the daughter C. Mr R was consequently acquitted of the charges. Question 4 [6 marks available in total] At the hearing of thi s case at first instance what, in summary, were the two key conclusions the judge reached in respect of D1’s allegations against Mr R? The judge made the following conclusions. The first substantive issue was whether D1 was sexually abused. The judge averred that D1had proved, in her statement, the fact that there was abuse. Her story was consistent and factual. Mr. R had lied that he had never had an opportunity to be alone with any of the children, which was proved by D1 testimony. The judge felt that that D1’s allegations were true. He felt that the evidence presented by her and her statement in court was true. Mr. R had not rebutted these assertions by his evidence or his behavior in court. He felt that the allegations of abuse by D, which were true were based on presentation of evidence. He believed the evidence tendered by the girl was true. Her statement could also be reasonably suspected to be true Question 5 [4 marks available in total] Summarise the issues ce rtified for Their Lordships’ consideration in this case. The issues before the Lordships are three, and they are as follows. The first issue is the standard of proof, which is to be proved where an allegation has been made that a child will suffer significant harm under the second part of 31(2) (a) of the Children Act. The second issue is in relation to the requirement of proof of sexual abuse, which is the standard of proof being higher than the normal civil standard of balance of probability, but lower than the criminal standard of proof. There is a question as to whether the evidence needed to prove the charge needs to be based on the seriousness of the charge. This means that the more serious the charge, the more evidence one needs to prove their case as opposed to a question of proving on a balance of probability. The final issue is where an allegation is made that a considerable injury is likely to impact on the child. The question raised here is: should one prove the l ikelihood to suffer harm on a balance of probability or does the presence of a substantial risk suffice instead of a speculative future risk? Question 6 [8 marks available in total] Summarise the submissions made before Their Lordships on behalf of: (a) The Local Authority (3marks) (b) The Guardian Ad Litem (2 marks) (c) The parents (3 marks) Submissions made on behalf of the Local Authority. The counsel submitted that the question of law to be addressed was on the

Self-Assessment Inventories Essay Example | Topics and Well Written Essays - 1250 words

Self-Assessment Inventories - Essay Example From this paper, it is clear that various methods can be used to evaluate one's competency at work. One of these is the self-assessment inventories. Abstract Self-assessment inventories are structured closed end questionnaires, which are meant to collect information concerning someone’s beliefs, virtues, and principles guiding that person at work. The subject individual in gauging his technical standing concerning his/her performance can use self-assessment information. The data collected will be standardized using a stipulated set of principles expected from an individual in the course of duty. The stipulated principles define how an ideal career person ought to administer his/her practices at work. Self-assessment inventories will provide an insight into someone’s strengths and weaknesses at work. Someone’s competencies will be evaluated in referent to the degree of deviation that exists between that individual’s actual principles of work and the stipula ted guidelines that defines an ideal person at work. Based on the abstract, the self-assessment inventories are meant to supplement me with my actual performance level information as an adult educator. The assessment inventories will unearth my philosophy as a teacher and my technical abilities as an adult educator. ... I assessed my abilities categorically based on the title of the inventories. Competencies for teaching adults All categories of learners require specific needs of technical skills during learning. The requirements for successful early childhood education are not similar to those for adult education. Therefore, as a teacher, one has to possess the appropriate set of qualities that characterize a successful administration of knowledge to learners (David, 2005 P.138). As an adult educator, I acknowledge the necessary skills needed to enhance proper dispensation of knowledge to the students. The inventory data concerning the competencies for teaching adults will depict my performance level in terms of the technical aspects I stick to when teaching. This inventory narrows down to assessing my technical capability on the most crucial contents of teaching. Based on the (1-7) scale scores in every section of the inventory, I could define my teaching competence. From the data contained in the inventory, I could acknowledge the fact that based on my self-knowledge; I slightly disagree with two statements, neutral on two statements and I slightly agree with the other two statements.

Individual Proposal to Change or Add a Policy, or Create New Business Research Paper

Individual Proposal to Change or Add a Policy, or Create New Business - Research Paper Example The virtual system would also promise high levels of productivity for employees by digitalizing all information. There are a thousand stores and shops out there that offer lucrative brands and special offers but you need to highlight your strategy of sit back in your chair and shop for groceries concept. Background The globe is changing at a fast scale and everything is contracting into one with the advancement in science and technology. We have already seen the venture and game of mobile companies creating virtual markets for their application shoppers and brand addicts. There is a great socio and economic tornado that is sweeping the world to conform to the latest trends of technology and it. In such a scenario the business environment is becoming highly competitive and to gain competitive advantage it is necessary to go online. Now is the ear of Information and technology change and consumers has become so intelligent and market sensitive that brining innovation is essential to su rvive in the competitive landscape (Reiss, 2012 ). Problem The problem with this policy is that it requires a huge organizational change. The change of culture, operations and systems may need to be brought at massive scale. The workforce may have to be downsized and the remaining workforce needs to be prepared for the change. Special trainers need to be hired to train the existing staff. The shift from a traditional system to a virtual one may take a considerable amount of time (Reiss, 2012 ). Intro section outline Need for- Special trainers Change managers Equipment Web developers Analyst Management information system softwares Security managers High tech computer systems Benefits- Eventually lower cost of warehousing Inventory management and accountability can be easily monitored Stand as a competitive advantage in the retail industry Increase productivity Motivate young staff and potential candidates to be a part of the organization Increase sales and profits Cut down warehouses Less staff to manage and pay Less dependency on efficiency of human capital Methods First of all it is necessary to create a business plan. Hiring an MBA is very essential for that. Calculate all costs of getting into the venture and sustaining it. Set out the objectives of the change policy and start implementing the business plan. Assign the project to a project manager. Purchase a domain name for your website and also get return and overhead charges permit from the government and create a website. Establish different paying systems, get associated with renowned banks for easy payment transfers for goods. One you have developed the website, hire a set of people to maintain all systems and keep all information co ordinate. The warehouse software, recruiting, sales order, delivery softwares all should be aligned together for co-ordination of information. Monitor the content being displayed and focus heavily on advertising the new style that you are introducing. Highlight the conven ience factor and market your store like anything and hit all possible virtual markets for example social networking sites. Hire a maintenance and security team to look into the security aspect of your business. The use of digital dash boards and workforce management systems can help in monitoring and evaluating performance before and after the change (Reiss, 2012 ). Qualifications The person

The Pros and Cons of Crowdsourcing Research Paper

The Pros and Cons of Crowdsourcing - Research Paper Example At the present, Oracle Corporation is facilitating the companies to use the influence of crowdsourcing to the various tasks of the company like that customer relationship management software program through a new enterprise. Regardless of the introduction of crowdsourcing potentials, a high-quality idea carries the menace of sneering at the source, making wrong way to the suitable sector, otherwise being deferred for a long time that it turns out to be useless. Increasingly companies across upright productions are making their way to crowdsourcing. In this scenario, eMarketer revealed in a business article that has proficiently utilized crowdsourcing as an imperative aspect of CSR programmes, almost 95% people say that it was at least somewhat important and effective approach to utilize. Additionally, a survey over 200 corporate executives was carried out in Fortune and almost 200 businesses stated the most helpful feature of crowdsourcing for their CSR program efforts. Whereas respo ndent frequently is inspired for the reason that they desire a specific product to become successful, businesses as well are able to offer incentives or rewards in the form of prizes to nonfinancial advantages for instance rank figures as stars, desired user status, a well-known fame on the Web site. Crowdsourcing is an emerging trend which has been used in various aspects and area of life. The purpose of this research is to study the concept of crowdsourcing and analyze the impacts of crowdsourcing in various disciplines of businesses and industrial framework. This research also analyzes the economic impacts of crowdsourcing. With the passage of time, the actual components of crowdsourcing were revealed by experiment and mistake. However, a number of corporations or individuals encompass a covert formula that they apply to guarantee constant accomplishment; whereas other people exercise the tried-and-true techniques those have been suggested by the professionals.

Questions Assignment Example | Topics and Well Written Essays - 250 words - 13

Questions - Assignment Example On the other end, Google only managed to keep some of its products popular where the number of clients using their app was used to determine the company’s application store superiority. Compared to Google’s Android operating system, Apple’s application stores are better since users maintain that they are safe for storing data and allow easier access from whichever Web-activated device (Gale Emerging Industry Overviews, 2011). If all brands had a mobile app, it would be great for application store users. However, due to a number of reasons, it is not advisable for all brands to have a mobile app. For one, most people who use apps feel grateful to app developers yet they do not understand that these app developers may be misleading at many times. Actually, when a customer abandons an app after using it once, it turns out that the high download numbers happens to be part of the high churn rate present in the world. This is not good at all and therefore not all brands should have a mobile app (Pak, 2011). In conclusion, some of the success factors that would be substantial for any mobile application include simplicity and planning. In this case, the former means that there will be broad awareness that will enable the manufacturer to understand the needs of a customer (Gale Emerging Industry Overviews, 2011). On the other end, the latter would help the customer be in a position to choose wisely from the many apps out there in the market. Pak, M. (2011). Mobile apps. Retrieved from https://docs.google.com/viewer?a=v&pid=gmail&attid=0.2&thid=13ca3e70377d6688&mt=application/pdf&url=https://mail.google.com/mail/u/0/?ui%3D2%26ik%3D53dcd4b10d%26view%3Datt%26th%3D13ca3e70377d6688%26attid%3D0.2%26disp%3Dsafe%26realattid%3Df_hcr8r0ka1%26zw&sig=AHIEtbRAv_ISfwY3tGnBi-byrPCFoxBIkA on February 4, 2013. Gale Emerging Industry Overviews, (2011). Mobile

Assignment 5 Example | Topics and Well Written Essays - 500 words - 1

5 - Assignment Example In the initial phase, there is a need for segregating all junk mails which arrive from different recipients. It is worth mentioning that the mail process would only reply to the issue letters. Thus, after segregating junk mails, it will be decided that whether the letters possess any issue or not. Issue letters are considered as those letters which advocate a position and most of them arrive from arranged campaigns. After identifying the issue letters, they would be scanned and processed for recognizing the issues which require strict attention from senator. Most of the issues which are described in those letters are from several agencies or on behalf of certain citizens. Thus, it is vital for the Senator’s office to scan and process them accordingly to recognize how the issues can be dealt with. A decision would be made regarding whether to respond to the identified issues or not in the letters. In some cases, letters do not contain any kind of return addresses, to which they can be mailed back to the respondents. Besides, at times, these issues also requests for special visits and favors. Thus, in such circumstances, a few of the issue letters would not be responded. In such letters, a position would be created in the computer database of Senator’s office. For the letters that would be decided to respond, they would be printed and then mailed to the respondents. Apart from flow chart, there are several other tools which can be used for improving the process of issue mail processing such as check sheet and cause and effect diagram. Check sheet is considered as an organized method of collecting and structuring information. The objective of check sheet is to collect the information in the most effective way and check them accordingly against prearranged groups of measurements (Soković, Jovanović, Krivokapić & Vujović 1-9). Cause and effect

The German economy ready for war in 1939 Essay Example for Free

The German economy ready for war in 1939 Essay To what extent was the German economy ready for war in 1939? Consider all the economic strategies implemented between 1933 and 1939 in your answer. (15 Marks) Germany made military moves to expand its borders into Eastern Europe in 1939. There is certainly evidence to suggest that Germany was no-where near the targets set by Hitler for total re-armament. As well as this factor though, there is another question to consider, had Germany set out for all out international war or was it just an attempt to expand lebensraum when they took the actions of invading Poland and Austria in 1939? This is an important question because it helps to understand the motives of Hitler when he ordered the invasion of Poland. Basically, war to what extent must first be established. On the 5th November 1937 a meeting took place between Hitler and all his important military generals. The minutes from this meeting were taken down and became known as the Hossbach Memorandum. They stated that it was agreed that by 1943 active steps towards lebensraum were to be taken. This was all that was firmly agreed though; there were no steps to preparation towards a full international war. Nothing was even mentioned of the USSR. According to Tim Mason this suggests that when Hitler invaded Poland in 1939 he had no ideas of world domination just yet. He calls the invasion of Poland a, War of plunder. By this he meant that the only intention was to gain some extra land and resources for Germany to live off. This is supported by the fact that by 1939 the push for arms had become very strenuous and there was a shortage in resources, labour especially. This would support the theory that Hitler was not ready for an international war by 1939, but only ready to make attempts to expand Germanys land in-line with his ideology of creating lebensraum so that he could increase his resources. After all there were still German nationals living in Austria and Poland from when land was taken from them under the Treaty Of Versailles. This would mean that the plans that were suggested in the Hossbach Memorandum were forced to be brought forward because of the unexpected strain on resources. This evidence gives us an overall impression that Germany was only ready for a war to gain living space, through, Wars of plunder, But not ready for an international war. The counter argument to this though is that by 1939 rearmament had gone so well that Germany was ready for war. Between 1936-37 there had been an 80% increase in the rearmament budget and this resulted in two thirds of government spending by 1939 was being spent on military causes. It is evidence that leads to the idea that Germany was ready for a full international war. Indeed, by 1939 it has been suggested, there was a blueprint for World Domination being put into action. A firm subscriber to this opinion is Richard Overy. He counter-acts Masons argument as previously discussed by referring to his Marxist beliefs. Insisting that he adds too great an emphasis on the resistance from the working class- a key factor in any Marxist line of thinking. He uses evidence such as Goring investing so much in rearmament and Schacht leaving because of his reservations over the rate of rearmament. To consider whether it is Mason or Overy that my opinion lies with I must first analyse the various economic policies that were implemented during the time 1933 to 1939. This will give me an idea as to whether which sort of war Germany was attempting, World Domination or a War of plunder, And whether Germany was ready for it. One of Hitlers most famous ideological thoughts was this idea of autarky, or self sufficiency. It was not a new idea but certainly raised a few eyebrows at this time when the world was just starting to come about into a world market of imports and exports, more so than ever before after the first world war. Autarky would enable Germany to live off its own land and have no need for imports. This was essential to Hitlers plans for war. It meant that Germanys important goods would not stop being supplied in times of war. It would enable Germany and its military to maintain strength. As soon as the Nazi party came into power in 1933 provisions were made to achieve this goal. This was first seen in 1934 thought in Schachts New Plan. Regulations on imports and exports were made. Importers into Germany were forced to apply for permits so to regulate the commodities. This policy is known as a protectionist policy. Farming protection was also a huge part of this policy of autarky. This provided Germany with food so that they could fight on without looking to import from abroad. It was in farming and agriculture that autarky could not be achieved. From 1932 to 1938 there had only been a slight increase in production rates. And this was with a rapidly growing population. This would mean that it was not possible for the economic expectation to be where it should be if a world war was to take place in 1939. Hence, the economy was not ready for war by 1939 as the policy of autarky had not been achieved. This would suggest that when Hitler invaded Poland in 1939 he was trying to gain living space to make Germany stronger. This is in-line with Masons view of, War of plunder. Another rather famous thought of Hitlers was to achieve total employment. By this he meant that everyone that could work was in work. Not only would this mean that every person would be regulated and watched over, and indeed, kept out of trouble but it also had massive positive effects on the economy. If everyone was in work then this meant that money was going into the economy for such causes as rearmament. This was a hugely successful policy. These figures are simple; in 1934 there were 2.4 million people unemployed. By 1939 there were no people unemployed. This quite simply an amazing success, and undoubtedly gave the government, and Goring the resources to pour into rearmament ready for war. The amazing success of this policy by 1939 suggests that Hitler was ready for a quest of world domination, not just a war of plunder to gain resources this is because he had achieved one of his main targets. This evidence goes hand in hand with the theory that Overy puts across that when Hitler invaded Poland in 1939 he was starting his quest for the aryanisation of the world. Rearmament was an important factor in the German economy from 1934 onwards. This was due to Hitlers obsession with rearming Germany for war. It is not an easy topic to discuss. There are differing accounts which may lead some to believe that by 1939 Germany was not ready for war, but some may interpret that Germany was ready for war in 1939. I shall deal with the latter first. By 1939 Germany had attained total employment. According to Hitler this was essential before launching any attempt at war. Much of the economy had been devoted to the rearmament cause. Some sources tell us that between 1933 and 39 half of the MEFO bills, a government acknowledgement of debt, were issued in the rearmament cause. This is a substantial amount, especially when considering that the German economy was only just recovering in 1933. This would suggest that such substantial spending on rearmament would have meant that Germany would have been ready for war by 1939. This is supported when we look at the change in attitude of Hitler from 1937 onwards. Before then Germany had always taken action with caution in the hope of appeasement by the other European nations. From here onwards any foreign action taken was risky and always had the possibility of war, such as the militarization of the banned area, the Rhineland and the goal of Anschluss completed, the union of Austria and Germany. These arguments show that the German economy must have been ready for war as these risks were taken. Hence, it can only be assumed that Hitler knew that war was to occur when he invaded Poland in 1939. The invasion of Poland though can only be seen as a desperate attempt to sort out the economy- and not a prelude to world war. The Hossbach document showed that Hitler and his military official expected Germany to expand its living space in 1942-43. This is when the economy was expected to be as efficient as it could be. This estimation was wrong though, Germany was running out of resources. Hitlers hopes of autarky were to be dashed unless he took action. This is seen by the failure to meet industrial targets. In 1938 the production for rubber was only at 4.2% of its target for 1940, explosives only 20.2 for the same dates. This showed an inadequacy in the materials needed by 1940 for war. The invasion of Poland therefore can be seen only as a mission for living space and resources, in which Germany lacked both. From this analysis it is fairly plain to see that Germanys invasion of Poland in 1939 was not an attempt to trigger a world scale war. Nor was it hopeful of beginning the quest for world domination. Instead it is more in-line with Masons view that the invasion of Poland was a, War of plunder. In which the resources of Poland would be plundered or stolen and used for Germanys benefit. It is true that Germany had achieved many of their economic aims by 1939, economic recovery, arms production but more importantly total employment. Indeed these were essential if Germany was to launch an attempt at world domination but, would not suffice without the ultimate goal of autarky being achieved. This by 1939 was not. It is mentioned by Hitler many times throughout his tyranny in Germany that before Germany could achieve world domination there would need to be total autarky. It was even laid down in his book, Mein Kampf. This ultimately means that the German economy couldnt have been ready for war in 1939 because it did not match up to Hitlers standards.

Plato and Gettier on Knowledge Essay Example for Free

Plato and Gettier on Knowledge Essay Plato in one of his most famous earliest dialogue Meno tried to provide a new way of explaining how we humans acquire knowledge. The common notion of the ancient Greeks and even to our times on how we acquire knowledge is the characteristic of knowledge to be taught and learned. Knowledge in a sense is an outside entity that resides outside ourselves. We learn outside of ourselves through our environment or other people that try to teach us. However, the events and flow of discussion in Meno had convinced Plato to provide a new framework that will be able to discuss how we acquire knowledge. Platos basic discussion says that knowledge acquisition is more in fact a matter of recollection rather than learning. We acquire knowledge and ideas from the inside of ourselves and not through the lessons outside ours. Plato rooted this from the belief of the priest and diviners and even philosophers to the immortality of the soul. The soul had existed since time immemorial making it able to know everything it needs to know. Whatever knowledge and ideas had already been embedded on the soul because of immortal existence. However, as the soul transfer from one body to another body because of the mortality of the human body, Plato argued that as the body withers and dies, all the knowledge are forgotten and put into background. From here, Plato would argue for the knowledge acquisition to be a matter of recollection and remembering of the knowledge and ideas already possessed by the soul. Plato believed that whatever we know is a recollected and remembered idea of the souls former existence. This concept was explained by Socrates to Meno with the help of Menos slave. Socrates called the slave and asked some questions regarding geometry and the measurement of some shapes. Socrates tried to ask some questions that direct the slave to answer them rightfully. It is important to note the slave is uneducated in the classical sense. However, through Socrates questions, he managed to enable to direct the slave towards right answers. This had help to prove to Meno that the soul already possessed the knowledge and opinions about everything. For Plato, this knowledge can be accessed by examining ourselves and with yourself or someone asking the right questions that will redirect you to the knowledge and ideas inside your soul. Knowledge is defined in its justification, truth and being a belief. After discussing the nature of knowledge and how we can acquire it, Socrates and Meno moved on to discuss to define opinion and its relevance on the affairs of man. The task is simple, to define opinion (true opinion) and to contrast it to knowledge. Primarily, Socrates acknowledged the role of a good opinion in the human affairs. He did not disregard it completely but rather understand its use in some cases. In fact, he acknowledges the inclination of virtuous men to rely on their true opinion to do good things. However, Socrates clearly undermines opinion; even they are good when it is contrasted to knowledge. For Plato, an opinion does not last long and easily withers in contrast to knowledge that has the capability to last eternally. The main difference lies on the presence of a rationality and grounds on knowledge and its absence of an n opinion. He used the example of a statue. He stated that the statue with that is tied in a good foundation will be able to last longer compare to a statue that is not tied. For Socrates, though an opinion can produce the same awe to an observer, it is a natural tendency for humans to ask the question of why and how. These questions cannot be answered by an opinion because of its absence of ground. In this sense, knowledge exceeds an opinion. This definition of knowledge that is characterized by Plato which is defined as a justified true belief had dominated from the ancient Greeks up to the mid-late 20th century. The general belief that knowledge for it to be referred as knowledge must be able to satisfy three basic characteristics, which is (1) justification (2) truth (3) belief was questioned by Edmund Gettiers paper entitled â€Å"Is Justified True Belief Knowledge? †. This short paper that had managed to provide a doubt to the long tradition in epistemology that considers knowledge to be a justified true belief. Edmund Gettier provided to two cases or examples will put in to question the long era of this ancient belief. He presented a case in which the three conditions are present namely justification, truth, belief yet unable to be count as knowledge because of the play of other factors. In Gettiers examples which were referred as Gettiers cases, the three criteria were only made possible by some elements of luck and chance which clearly invalidate it to be knowledge. This put an end to a long tradition of considering knowledge by the virtue of three elements of justification, truth and belief. Though the paper of Gettier did not provide an alternative view or solution to his problem, responses on his paper can be summarized to the attempts of many philosophers to look or find out for the fourth criteria that will make the definition of knowledge. Works Cited Plato. Grube G. M. A. (trans) Cooper, John (rev) Five dialogues. 2002. Hacket Publishing Company Inc. IN. Print Gettier. Edmund. Is Justified True Belief Knowledge? Web.

Stock Price Reaction To Annual Earnings Announcements

Stock Price Reaction To Annual Earnings Announcements Any decision carried out by the management of any organization needs adequate, accurate and precise information, on the basis of that information the management procures their analysis and undertake decision. If decision to be taken involves any financial aspect, this increases the scope and accuracy of the information. Financial decisions require adequate and accurate information; therefore, it is important that the behaviour of individual market is investigated for informed financial decision making, Oguzusy and Guiven (2003). In this respect many theories were presented. One of them is about the market efficiency which is termed as efficient market hypothesis (EMH). The concept of market efficiency had been anticipated at the beginning of the century by Bachelier (1900) in his dissertation. Fama (1970) classified market efficiency in three categories namely, weak form, semi strong form and strong form of efficiency; weak form of efficiency which defines as one cant earn abnormal return by doing technical analysis of the market or of a particular stock. Technical analysis means predicting future prices by studying historical prices of a particular share or a market. The Second form of efficient market hypothesis (EMH) is semi-strong form of efficiency. This form of market efficiency makes impossible for an investor to earn extra return on security by knowing the publicly available information; this includes companys financial results, any particular event or news which affects the company the share prices adjust rapidly with these new publicly available information therefore excess return cant be earn by trading on that information. The last form of efficient market hypothesis (EMH) is the strong form of efficiency and can be define as share prices reflects all public and private information (insider information) and consequently it is not possible for a stock holder to earn extra return on the basis of these information. According to efficient market hypothesis (EMH) the stock prices in an efficient market fully reflect their investment value Ajayi, Mehdian Perry (2004). The security pricing process instantaneously impound the available information in an efficient market and it is not possible to beat an efficient market that by using data mining, trading strategy or by any technical analysis to get consistently abnormal returns. Efficient market hypothesis (EMH) assumed that (1) All investors have cost-less access to currently available information about the future. (2) They are good analysts; and (3) They pay close attention to the market process and adjust their holdings appropriately. Many models including Augmented Dickey Fuller (ADF) unit root test, variance ratio test (VR), Ljung Box Q-statistics, and Durbin Watson‘d statistics have been based on this concept of informational efficiency of capital markets. However the late seventies and the eighties brought in evidences questioning the validity and highlighting various anomalies related to the Stock market efficiency. There are many focused studies that demonstrate the possible trading strategies yielding abnormal rates of return using the historical data and publicly available information ruling out the efficacy of markets. The empirical studies evidencing the inefficiency are broadly related to the following: (1) The low price-earning (P/E) effect: Researches show that stocks with low price earning (P/E) ratios earned more for investors, which is contradictory to Efficient Market Hypothesis (EMH). Fama and French (1995) found that market and size factors in earnings help explain market and size factors in returns. (2) The small firm and neglected firm effects: Banz (1981), Reinganum (1981) and other researchers show the size or small-firm effect in stock return. Their analysis support the evidence that small firm with low capitalization can earn higher returns than the large firm with large capitalization. (3) Market over and under reaction: DeBondt and Thaler (1985, 1987) present evidence that is consistent with stock prices over reacting to current changes in earnings. They report positive (negative) estimated abnormal stock returns for portfolios that previously generated inferior (superior) stock price and earning performance. This could be construed as the prior period stock price behaviour over reacting to earnings developments (Bernard, 1993). (4) The January effect: The January effect in stock returns was documented by many researchers. Their analysis suggested that January has a highest return as compared to other months. January effect was first discovered by Rozeff and Kinney (1976) for US stock markets. Later other researchers like Gultekin and Gultekin (1983), Chang and Pinegar (1986) documented the same result for other countries stock markets. (5) The week day effect: This refers to the observation that stocks return are not independent of the day of the week effect. A notable anomaly is the Monday effect in daily stock returns, which suggests that stock returns are significantly lower or negative on Mondays relative to other week days. This ‘Monday effect has been extensively examined not only in U.S. asset markets but in international markets as well, for example French (1980), Lakonishok and Levi (1982), Mehdian Perry (2001) and Lakonishok Smidt (1988). In week day effect the last trading day that is Friday was characterized with a positive return and the first trading day that is Monday is characterized with a low or negative return. Later this interesting study was also carried out on other countries stock markets and the researchers found out the same result, but still few studies has been done on emerging Asian stock markets. Karachi Stock Exchange (Kse) The Karachi Stock Exchange abbreviated as KSE is a stock exchange based in Karachi, Pakistan. It was founded in 1947 and is countrys largest and oldest stock exchange, with both Pakistani and overseas listings. It is also the second oldest stock exchange in South Asia. From its inception in 1947, it has done an amazing progress. In 1950s, only 05 companies listed and 90 members were there on the exchange and at the end of 2007 the number of listed companies increased by 666 which make a total of 671 listed companies and the member on the exchange goes up from 90 to 200 during these years. Its current premises are situated in the heart of Karachis Business District, on Stock Exchange Road. History KSE is the biggest and most liquid exchange. It was recognized worldwide for performing well in 2002 by Business Week magazine. US newspaper, USA Today, termed Karachi Stock Exchange (KSE) as one of the best performing bourses in the world. As of December 20, 2007, 671 companies were listed with the market capitalization of Rs.4364.312 billion (US$ 73 Billion) having listed capital of Rs.717.3 billion (US$ 12 billion). In the same year, the KSE 100 Index reached its ever highest value and closed at 14,814.85 points. Trading Time The trading hours are from 9:45am to 2:15pm on weekdays and 9:30am to 1:30pm on Friday. Growth The beginning of the exchange was very low with an index of 50 shares only. As the market grew, a delegate index was needed. On November 1st, 1991 the KSE-100 index was introduced and till present it is the most generally accepted measure of the exchange. The need to reconfirm for all share indexes was felt in 1995 and to provide the beginning of index trading in future. And this was achieved on 29th of August, 1995, constructing all share indexes and introduced on 18th of September, 1995. Foreign interests were very active on KSE in 2006 and the interest continued in 2007 also. According to the estimates given by State Bank of Pakistan, foreign investment in capital markets total about US$523 Million. According to a research analyst in Pakistan, around 20% of the total free float in KSE-30 Index is held by foreign participants. There is a plan to build high rise building for the KSE as a new direction to future investments. The decision was taken by the board of directors, Karachi stock exchange (KSE). Disputes between investors and members of the Exchange are resolved through deliberations of the Arbitration Committee of the Exchange. Kse – 100 Index Karachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark and stock index used to compare prices overtime. In determining representative companies to compute the index, companies with the highest market capitalization are selected. To ensure full market representation, the company with the highest market capitalization from each sector is also included. The list of 100 companies listed in Karachi Stock Exchange is presented in Table # 01. The Karachi Stock Exchange (KSE) has also launched the KSE-30 Index with base value of 10,000 points, implemented from September 1, 2006. The main feature of this index is that it based only on the free-float of shares, rather than on the basis of paid-up capital which differ it from the other indices. Unlike the Karachi Stock Exchange (KSE) which represents total return of the market, KSE-30 index is adjusted for dividends and right shares. That is, when a company announces a dividend, the other indices at Karachi Stock Exchange (KSE) are not reduced for that amount of dividend. Whereas KSE-30 Index is adjusted for dividends and right shares only Table # 01 List of 100 Companies listed In Karachi Stock Exchange – 100 Index No. Company Name No. Company Name 1 Pakistan Refinery 51 Pakistan Telecom. Co.Ltd 2 EFU General Ins 52 Sui North Gas 3 Pakistan Reinsur 53 New Jubilee Insurance 4 EFU Life Assurance 54 Mybank Limited 5 Dawood Herc. 55 WorldCall Telecom 6 Ist.Capital Securities 56 D.G.Khan Cement 7 Mari Gas 57 Pakistan State Oil 8 Siemens Pakistan 58 PICIC Growth 9 Bata (Pakistan) 59 Fauji Cement 10 Adamjee Insurance 60 Standard Chartard Bank 11 Attock Refinery 61 IGI Insurance 12 Jahangir Siddiqque Co. 62 Sui South Gas 13 Pak.National Shipping Corp. 63 Karachi Electric Supply Corp. 14 Bank Al-Falah 64 Shell Pakistan 15 Meezan Bank 65 Wazir Ali 16 Bannu Woollen 66 Samin Textiles 17 JS Global Cap. 67 Bestway Cement 18 Rafhan Maize 68 Maple Leaf Cement 19 Habib Metro Bank 69 Pioneer Cement 20 Nestle Pakistan 70 Javedan Cement 21 Pakistan Elektron 71 Fazal Textile 22 Lucky Cement 72 Pak.PTA Ltd. 23 Pakistan Tobacco 73 ABN AMRO Bank 24 MCB Bank 74 NIB Bank 25 Bank AL-Habib 75 Bosicor Pakistan 26 Pakistan Petroleum 76 Saudi Pak Bank 27 Attock Petroleum 77 Pakistan Cement 28 Engro Chemical 78 Agriautos Industries 29 National Refinery 79 AL-Ghazi Tractors 30 ICI Pakistan 80 Allied Bank 31 Colgate Palmolive 81 Arif Habib Securities 32 Abbott (Lab) 82 Askari Bank 33 Habib Bank Ltd 83 Atlas Honda 34 Attock Cement 84 Kot Addu Power Company 35 Azgard Nine 85 Lakson Tobacco 36 Bank of Punjab 86 National Bank of Pakistan 37 Fauji Fertilizers Bin 87 Nishat Mills 38 Fauji Fertiliz 88 Oil and Gas Development 39 Faysal Bank 89 Orix Leasing 40 Ghani Glass 90 Pakistan International Airlines 41 GlaxoSmith 91 Packages Limited 42 Habib Modarba 92 Pak Oilfields 43 Habib Sugar 93 Pak Services 44 Hub Power 94 Pak Suzuki 45 Ibrahim Fibres 95 Pakistan Intn`l Container Ter. 46 Indus Motor 96 Soneri Bank 47 International Industries limited 97 Thal Limited 48 JS Investment 98 UniLever Pakistan 49 Kohinoor Energy 99 Unilever Foods 50 Cresent Commercial Bank 100 United Bank (Source: Karachi Stock Exchange) History The index was launched in late 1991 with a base of 1,000 points. By 2001, it had grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It then reached a peak of 12,285 in February 2007. KSE-100 index touched the highest ever benchmark of 14,814 points on December 26, 2007. The graph of last 10 years of KSE growth and index points is shown. The graph clearly shows the progress and continuous increment. Free Float Index: In order to introduce a free float index that is representative of the market, the KSE- 30 Sensitive Index was implemented with effect from September 1, 2006. The need for a market representative free float index was long felt as the capitalization weighted KSE 100 Index strongly tilted to a few scripts. Free float is based on the proportion of shares readily available for trading to the total shares issued and excludes the locked in shares. The criterion for the selection of scripts on KSE-30 index was revised on 15 February 2007 in line with international best practices to include the impact cost as a measure to gauge the liquidity of scrip. This study is about testing the semi-strong form of Efficient Market Hypothesis (EMH) on the annual earnings announcement for the selected companies, listed on Karachi Stock Exchange (KSE) by using event study methodology (Fama et al. 1969; and Brown and Warner 1980, 1985).; Following this chapter the study is divided into six more chapters, they are; (1) Chapter two includes detailed Research aims and objectives, it also comprises of main problem and their sub problems; hypotheses of the study are also being discussed in this chapter. (2) In the third chapter, Review of relevant theoretical and empirical research has been done. In this chapter we have concluded that what has been done so far in this area of study both theoretically and empirically. (3) Fourth chapter covers Research methodology, data sources and method of sampling for the data. Methodology includes formulae and tests which are being used to test semi-strong form of efficient market hypothesis (EMH) on Karachi Stock Exchange (KSE). (4) Fifth chapter includes Research results and/or findings with supporting evidence. (5) Sixth chapter includes the research conclusions. (6) The seventh and the last chapter comprise of Recommendations; made with the help of Research results and/or findings. Scope And Limitation Of The Study The material in this dissertation to the best of my knowledge do not contain any previously published or written documents by another person except where due acknowledgement is made in the research itself. If any errors found in the calculations made for this research that will be the sole responsibility of the writer. Statement Of Ethics And Originality Due to time constraint and non availability of the companys earnings announcement data from the Karachi stock exchange web site before 2004 the study is being carried out for just three years which includes 2005, 2006 and 2007. Moreover during the period of study which is year 2005, 2006 and 2007 there are few companies eliminated due to the non availability of the required data to carry out the calculations. Due to the limited availability of econometrics experts for guidance irrespective of the new sophisticated models for event studies, conventional models were used in this study despite the fact they have less predictive power than the other latest models. Aims, Objectives And Hypothesis Of The Study The following are the Aims Objectives of the study: To check whether the Semi-Strong form of Efficient Market Hypothesis (EMH) is valid for Karachi Stock Exchange` 100 – 100 Index (KSE – 100 Index). To examine the stock market reaction (KSE) to Annual Earnings Announcements. Problems The research is comprises with one main problem which is further divided into three sub problems each problem has its own hypothesis and to be solved separately. Main Problem Test whether semi-strong form of efficiency exists on Karachi Stock Exchange (KSE) or not. Sub Problem – One Whether the annual earnings announcement affect complete on the day of announcement? We will calculate the normal return and the expected return and if it is close to zero; we will say that the annual earnings announcement affect complete on the day of announcement Sub Problem – Two Share holders could not earn extra return; before, and after the announcement. We would first take the average of abnormal return and then cumulate the average abnormal return. In case where the AARs and the CAARs are closed to zero we will conclude our results that, investor or the share holder are not able to earn abnormal return by trading on event which is earnings announcement. Sub Problem – Three The Average Abnormal Returns (AARs) are random. We used Runs test to analyze the randomness in the behavior of Average Abnormal Returns (AARs). To check whether the average abnormal returns occur by chance or not, we carried out Runs test. In case where the observed numbers of runs are significantly different from the expected number of runs, we will conclude our finding as Average Abnormal Returns (AARs) do not occur randomly. Alternatively, if these results were not statistically significant, we say that Average Abnormal Returns (AARs) do occur randomly. We carried out runs test on Average Abnormal Returns (AARs) before and after the event day and also for the event window. Hypothesis Since the study empirically examine the Karachi Stock Exchange`s 100 Index reaction to Annual Earnings Announcement and the hypothesis being tested are: Hypothesis For Sub Problem One HO: Our null hypothesis for sub problem – one is that the stock prices reactions in response to the annual earnings announcement complete on the announcement day in addition to that, abnormal returns can`t be earn by the investors on stocks by trading on stocks after the announcement day. HO: Rit = AR = 0 H1: Rit = AR For testing above hypothesis we compute the estimated return for the event window and then compare it to the actual return, the estimated return will be calculated by using following equation; E (Rit) = ÃŽ ±i + ÃŽ ²i Rmt Under the null hypothesis if the estimated return of a stock is closed to zero we will accept the null hypothesis and if it is not than we will reject our hypothesis and bring to a close; that announcement do affect on returns. Hypothesis For Sub Problem Two HO: Our null hypothesis for sub problem – two is that returns are close to zero for average abnormal returns and their respective cumulative average abnormal returns for the selective securities in the study HO: AAR ≈ CAAR = 0 H1: AAR ≈ CAAR To test the above hypothesis first we will calculate the average abnormal return (AAR) and then cumulative average abnormal return (CAAR) with the help of the following formulae; For Average Abnormal Return ÃŽ £ ARit AAR it = i=1 . N Where, i = the number of securities in the study; N = total number of securities. t = the days surrounding the event-day For Cumulative Average Abnormal Return K CAARt = ÃŽ £ AARit Where, t = -30,0, +30. t = -30 If the average abnormal return and the cumulative average abnormal return are close to zero than we accept our null hypothesis otherwise we will reject it. 2.2.3 Hypothesis for Sub Problem – Three HO: Our null hypothesis for sub problem – three is that the difference between the no. of positive and negative average abnormal returns as not significant and they occur randomly. HO: Z = 0 H1: Z The null hypothesis of the test is that the observed series is a random series. A run is defined by Gibbons (1985), as â€Å"A succession of identical symbols which are followed or preceded by different symbols or no symbol at all† The run test is another approach to test and detect statistical dependencies (randomness). The number of runs is computed as a sequence of the price changes of the same sign (such as; + +, , 0 0). When the expected number of run is significantly different from the observed number of runs, the test rejects the null hypothesis that the daily returns are random. The run test converts the total number of runs into a Z statistic. For large samples the Z statistics gives the probability of difference between the actual and expected number of runs. The Z value is greater than or equal to + 1.96, reject the null hypothesis at 5% level of significance (Sharma and Kennedy, 1977). Literature Review There have been a lot of studies conducted on Efficient Market Hypothesis (EMH), a concept; developed by Fama (1960) and divided capital market into three parts on the basis of its efficiency namely weak, semi-strong and strong form. For the event study, which is linked with semi – strong form of market efficiency; below first we discuss the theoretical foundations and after that, the empirical evidence. Theoretical Foundations The origins of the Efficient Market Hypothesis (EMH) can be traced back to the work of two individuals, Eugene F. Fama (1960) and Paul A. Samuelson (1960). Remarkably, they independently developed the same basic concept of market efficiency from two rather different research agendas. These differences would drive them along two distinct trajectories leading to several other breakthroughs and milestones, all originating from their point of intersection, the Efficient Market Hypothesis (EMH). The EMH state that in an efficient market where many well-informed and intelligent investors operates, the stock price imitates all the existing information and no other information or analysis can be used to earn abnormal returns. The arguments of Fama (1965) form the theoretical foundation for the Efficient Market Hypothesis (EMH), which persuasively reasons that in an efficient and active market consisting of many well-informed investors, equity prices will appropriately reflect the effects of information based on present and future expected events. The strong form of the hypothesis asserts that the current market prices fully reflect all private (insider) and public information. In other words, insiders shouldn`t be able to earn excess returns from privileged asymmetric information. The strong form of the hypothesis represents an absolute standard, and in practice, market demonstrates only a certain degree of efficiency. Efficient Market Hypothesis (EMH) claims that speculative market prices fully and immediately reflect all available relevant information. Fama categorised information as: publicly available information, information that eventually becomes public, insider information. Event studies are used in tests of Efficient Market Hypothesis (EMH) to ask whether prices incorporate information fully on the day that the information is revealed. If Efficient Market Hypothesis (EMH) holds, the information about the event should be incorporated into prices before or on the day of the event itself. There should be no impact on returns after the event â€Å"There was little evidence on the central issues of corporate finance, now we are overwhelmed with results, mostly from event studies† (Fama, 1991, p. 1600) Event study analyses are typically used for two different purposes firstly as a test of semi-strong form market efficiency; and secondly as, assuming that the market efficiency hypothesis holds, as a tool for examining the impact of some event on the wealth of firms shareholders. Event studies measure security price changes in response to events. A single event study typically analyzes the average security price reaction to instances of the same type of event experienced by many firms. For example, the event could be the announcement of a merger. The event date can vary from one security to another in the same study, with dates measured in event time. Event studies have been used in a large variety of studies, including [mergers and acquisitions], earnings announcements, debt or equity issues, corporate reorganizations, investment decisions and corporate social responsibility MacKinlay (1997), McWilliams Siegel (1997). Empirical Evidence The debate about efficient markets has resulted in hundreds and thousands of empirical studies attempting to determine whether specific markets are in fact efficient and if so to what degree. Many novice investors are surprised to learn that a tremendous amount of evidence supports the Efficient Market Hypothesis (EMH). Since the late 1960s, the enormous study in the finance and accounting literature has recognized evidence of relationship between accounting reports and market reactions. Fama (1970) described an efficient market as having prices that â€Å"fully reflect† all available information. Beaver (1981) offers a definition of market efficiency based on the information distribution when investors have mixed beliefs. Accounting reports probably are one of the sources of public information. Ball Brown (1968) examine the relationship between the accounting reports stock prices . Their results show that the market reacts to unexpected earnings as though the market participants had access to the good or bad news prior to the availability of this news to the market. They estimate that only 10 to15 percent of the market reaction takes place during the announcement month. Using another approach, similar results are also found in the work of Ball and Brown (1968) they examined price changes surrounding the announcement of a firms annual earnings and found that the stock market reacts quickly to annual earnings announcements. Ball (1992) and Bernard Thomas (1989) and (1990), documented significant delays in the adjustment of stock prices to quarterly earnings announcements. Developed countries of the world such as the USA, the UK, and Australia, etc. the amounts of researches on Efficient Market Hypothesis are extensive. Fama, Fisher, Jensen and Roll (1969) conducted the first study on semi-strong form of Efficient Market Hypothesis (EMH). They examined the behaviour of abnormal returns at the announcements of stock splits and found that the market reaction is significant prior to the stock split announcement. Jordan (1973) assessed the behaviour of security prices surrounding the quarterly earnings announcements and found that stock market is efficient in the semi-strong form. In Asia until now some researches has been done. Kong, S. and Taghavi, M. (2006) study the Effect of Annual Earnings Anno Stock Price Reaction To Annual Earnings Announcements Stock Price Reaction To Annual Earnings Announcements Any decision carried out by the management of any organization needs adequate, accurate and precise information, on the basis of that information the management procures their analysis and undertake decision. If decision to be taken involves any financial aspect, this increases the scope and accuracy of the information. Financial decisions require adequate and accurate information; therefore, it is important that the behaviour of individual market is investigated for informed financial decision making, Oguzusy and Guiven (2003). In this respect many theories were presented. One of them is about the market efficiency which is termed as efficient market hypothesis (EMH). The concept of market efficiency had been anticipated at the beginning of the century by Bachelier (1900) in his dissertation. Fama (1970) classified market efficiency in three categories namely, weak form, semi strong form and strong form of efficiency; weak form of efficiency which defines as one cant earn abnormal return by doing technical analysis of the market or of a particular stock. Technical analysis means predicting future prices by studying historical prices of a particular share or a market. The Second form of efficient market hypothesis (EMH) is semi-strong form of efficiency. This form of market efficiency makes impossible for an investor to earn extra return on security by knowing the publicly available information; this includes companys financial results, any particular event or news which affects the company the share prices adjust rapidly with these new publicly available information therefore excess return cant be earn by trading on that information. The last form of efficient market hypothesis (EMH) is the strong form of efficiency and can be define as share prices reflects all public and private information (insider information) and consequently it is not possible for a stock holder to earn extra return on the basis of these information. According to efficient market hypothesis (EMH) the stock prices in an efficient market fully reflect their investment value Ajayi, Mehdian Perry (2004). The security pricing process instantaneously impound the available information in an efficient market and it is not possible to beat an efficient market that by using data mining, trading strategy or by any technical analysis to get consistently abnormal returns. Efficient market hypothesis (EMH) assumed that (1) All investors have cost-less access to currently available information about the future. (2) They are good analysts; and (3) They pay close attention to the market process and adjust their holdings appropriately. Many models including Augmented Dickey Fuller (ADF) unit root test, variance ratio test (VR), Ljung Box Q-statistics, and Durbin Watson‘d statistics have been based on this concept of informational efficiency of capital markets. However the late seventies and the eighties brought in evidences questioning the validity and highlighting various anomalies related to the Stock market efficiency. There are many focused studies that demonstrate the possible trading strategies yielding abnormal rates of return using the historical data and publicly available information ruling out the efficacy of markets. The empirical studies evidencing the inefficiency are broadly related to the following: (1) The low price-earning (P/E) effect: Researches show that stocks with low price earning (P/E) ratios earned more for investors, which is contradictory to Efficient Market Hypothesis (EMH). Fama and French (1995) found that market and size factors in earnings help explain market and size factors in returns. (2) The small firm and neglected firm effects: Banz (1981), Reinganum (1981) and other researchers show the size or small-firm effect in stock return. Their analysis support the evidence that small firm with low capitalization can earn higher returns than the large firm with large capitalization. (3) Market over and under reaction: DeBondt and Thaler (1985, 1987) present evidence that is consistent with stock prices over reacting to current changes in earnings. They report positive (negative) estimated abnormal stock returns for portfolios that previously generated inferior (superior) stock price and earning performance. This could be construed as the prior period stock price behaviour over reacting to earnings developments (Bernard, 1993). (4) The January effect: The January effect in stock returns was documented by many researchers. Their analysis suggested that January has a highest return as compared to other months. January effect was first discovered by Rozeff and Kinney (1976) for US stock markets. Later other researchers like Gultekin and Gultekin (1983), Chang and Pinegar (1986) documented the same result for other countries stock markets. (5) The week day effect: This refers to the observation that stocks return are not independent of the day of the week effect. A notable anomaly is the Monday effect in daily stock returns, which suggests that stock returns are significantly lower or negative on Mondays relative to other week days. This ‘Monday effect has been extensively examined not only in U.S. asset markets but in international markets as well, for example French (1980), Lakonishok and Levi (1982), Mehdian Perry (2001) and Lakonishok Smidt (1988). In week day effect the last trading day that is Friday was characterized with a positive return and the first trading day that is Monday is characterized with a low or negative return. Later this interesting study was also carried out on other countries stock markets and the researchers found out the same result, but still few studies has been done on emerging Asian stock markets. Karachi Stock Exchange (Kse) The Karachi Stock Exchange abbreviated as KSE is a stock exchange based in Karachi, Pakistan. It was founded in 1947 and is countrys largest and oldest stock exchange, with both Pakistani and overseas listings. It is also the second oldest stock exchange in South Asia. From its inception in 1947, it has done an amazing progress. In 1950s, only 05 companies listed and 90 members were there on the exchange and at the end of 2007 the number of listed companies increased by 666 which make a total of 671 listed companies and the member on the exchange goes up from 90 to 200 during these years. Its current premises are situated in the heart of Karachis Business District, on Stock Exchange Road. History KSE is the biggest and most liquid exchange. It was recognized worldwide for performing well in 2002 by Business Week magazine. US newspaper, USA Today, termed Karachi Stock Exchange (KSE) as one of the best performing bourses in the world. As of December 20, 2007, 671 companies were listed with the market capitalization of Rs.4364.312 billion (US$ 73 Billion) having listed capital of Rs.717.3 billion (US$ 12 billion). In the same year, the KSE 100 Index reached its ever highest value and closed at 14,814.85 points. Trading Time The trading hours are from 9:45am to 2:15pm on weekdays and 9:30am to 1:30pm on Friday. Growth The beginning of the exchange was very low with an index of 50 shares only. As the market grew, a delegate index was needed. On November 1st, 1991 the KSE-100 index was introduced and till present it is the most generally accepted measure of the exchange. The need to reconfirm for all share indexes was felt in 1995 and to provide the beginning of index trading in future. And this was achieved on 29th of August, 1995, constructing all share indexes and introduced on 18th of September, 1995. Foreign interests were very active on KSE in 2006 and the interest continued in 2007 also. According to the estimates given by State Bank of Pakistan, foreign investment in capital markets total about US$523 Million. According to a research analyst in Pakistan, around 20% of the total free float in KSE-30 Index is held by foreign participants. There is a plan to build high rise building for the KSE as a new direction to future investments. The decision was taken by the board of directors, Karachi stock exchange (KSE). Disputes between investors and members of the Exchange are resolved through deliberations of the Arbitration Committee of the Exchange. Kse – 100 Index Karachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark and stock index used to compare prices overtime. In determining representative companies to compute the index, companies with the highest market capitalization are selected. To ensure full market representation, the company with the highest market capitalization from each sector is also included. The list of 100 companies listed in Karachi Stock Exchange is presented in Table # 01. The Karachi Stock Exchange (KSE) has also launched the KSE-30 Index with base value of 10,000 points, implemented from September 1, 2006. The main feature of this index is that it based only on the free-float of shares, rather than on the basis of paid-up capital which differ it from the other indices. Unlike the Karachi Stock Exchange (KSE) which represents total return of the market, KSE-30 index is adjusted for dividends and right shares. That is, when a company announces a dividend, the other indices at Karachi Stock Exchange (KSE) are not reduced for that amount of dividend. Whereas KSE-30 Index is adjusted for dividends and right shares only Table # 01 List of 100 Companies listed In Karachi Stock Exchange – 100 Index No. Company Name No. Company Name 1 Pakistan Refinery 51 Pakistan Telecom. Co.Ltd 2 EFU General Ins 52 Sui North Gas 3 Pakistan Reinsur 53 New Jubilee Insurance 4 EFU Life Assurance 54 Mybank Limited 5 Dawood Herc. 55 WorldCall Telecom 6 Ist.Capital Securities 56 D.G.Khan Cement 7 Mari Gas 57 Pakistan State Oil 8 Siemens Pakistan 58 PICIC Growth 9 Bata (Pakistan) 59 Fauji Cement 10 Adamjee Insurance 60 Standard Chartard Bank 11 Attock Refinery 61 IGI Insurance 12 Jahangir Siddiqque Co. 62 Sui South Gas 13 Pak.National Shipping Corp. 63 Karachi Electric Supply Corp. 14 Bank Al-Falah 64 Shell Pakistan 15 Meezan Bank 65 Wazir Ali 16 Bannu Woollen 66 Samin Textiles 17 JS Global Cap. 67 Bestway Cement 18 Rafhan Maize 68 Maple Leaf Cement 19 Habib Metro Bank 69 Pioneer Cement 20 Nestle Pakistan 70 Javedan Cement 21 Pakistan Elektron 71 Fazal Textile 22 Lucky Cement 72 Pak.PTA Ltd. 23 Pakistan Tobacco 73 ABN AMRO Bank 24 MCB Bank 74 NIB Bank 25 Bank AL-Habib 75 Bosicor Pakistan 26 Pakistan Petroleum 76 Saudi Pak Bank 27 Attock Petroleum 77 Pakistan Cement 28 Engro Chemical 78 Agriautos Industries 29 National Refinery 79 AL-Ghazi Tractors 30 ICI Pakistan 80 Allied Bank 31 Colgate Palmolive 81 Arif Habib Securities 32 Abbott (Lab) 82 Askari Bank 33 Habib Bank Ltd 83 Atlas Honda 34 Attock Cement 84 Kot Addu Power Company 35 Azgard Nine 85 Lakson Tobacco 36 Bank of Punjab 86 National Bank of Pakistan 37 Fauji Fertilizers Bin 87 Nishat Mills 38 Fauji Fertiliz 88 Oil and Gas Development 39 Faysal Bank 89 Orix Leasing 40 Ghani Glass 90 Pakistan International Airlines 41 GlaxoSmith 91 Packages Limited 42 Habib Modarba 92 Pak Oilfields 43 Habib Sugar 93 Pak Services 44 Hub Power 94 Pak Suzuki 45 Ibrahim Fibres 95 Pakistan Intn`l Container Ter. 46 Indus Motor 96 Soneri Bank 47 International Industries limited 97 Thal Limited 48 JS Investment 98 UniLever Pakistan 49 Kohinoor Energy 99 Unilever Foods 50 Cresent Commercial Bank 100 United Bank (Source: Karachi Stock Exchange) History The index was launched in late 1991 with a base of 1,000 points. By 2001, it had grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It then reached a peak of 12,285 in February 2007. KSE-100 index touched the highest ever benchmark of 14,814 points on December 26, 2007. The graph of last 10 years of KSE growth and index points is shown. The graph clearly shows the progress and continuous increment. Free Float Index: In order to introduce a free float index that is representative of the market, the KSE- 30 Sensitive Index was implemented with effect from September 1, 2006. The need for a market representative free float index was long felt as the capitalization weighted KSE 100 Index strongly tilted to a few scripts. Free float is based on the proportion of shares readily available for trading to the total shares issued and excludes the locked in shares. The criterion for the selection of scripts on KSE-30 index was revised on 15 February 2007 in line with international best practices to include the impact cost as a measure to gauge the liquidity of scrip. This study is about testing the semi-strong form of Efficient Market Hypothesis (EMH) on the annual earnings announcement for the selected companies, listed on Karachi Stock Exchange (KSE) by using event study methodology (Fama et al. 1969; and Brown and Warner 1980, 1985).; Following this chapter the study is divided into six more chapters, they are; (1) Chapter two includes detailed Research aims and objectives, it also comprises of main problem and their sub problems; hypotheses of the study are also being discussed in this chapter. (2) In the third chapter, Review of relevant theoretical and empirical research has been done. In this chapter we have concluded that what has been done so far in this area of study both theoretically and empirically. (3) Fourth chapter covers Research methodology, data sources and method of sampling for the data. Methodology includes formulae and tests which are being used to test semi-strong form of efficient market hypothesis (EMH) on Karachi Stock Exchange (KSE). (4) Fifth chapter includes Research results and/or findings with supporting evidence. (5) Sixth chapter includes the research conclusions. (6) The seventh and the last chapter comprise of Recommendations; made with the help of Research results and/or findings. Scope And Limitation Of The Study The material in this dissertation to the best of my knowledge do not contain any previously published or written documents by another person except where due acknowledgement is made in the research itself. If any errors found in the calculations made for this research that will be the sole responsibility of the writer. Statement Of Ethics And Originality Due to time constraint and non availability of the companys earnings announcement data from the Karachi stock exchange web site before 2004 the study is being carried out for just three years which includes 2005, 2006 and 2007. Moreover during the period of study which is year 2005, 2006 and 2007 there are few companies eliminated due to the non availability of the required data to carry out the calculations. Due to the limited availability of econometrics experts for guidance irrespective of the new sophisticated models for event studies, conventional models were used in this study despite the fact they have less predictive power than the other latest models. Aims, Objectives And Hypothesis Of The Study The following are the Aims Objectives of the study: To check whether the Semi-Strong form of Efficient Market Hypothesis (EMH) is valid for Karachi Stock Exchange` 100 – 100 Index (KSE – 100 Index). To examine the stock market reaction (KSE) to Annual Earnings Announcements. Problems The research is comprises with one main problem which is further divided into three sub problems each problem has its own hypothesis and to be solved separately. Main Problem Test whether semi-strong form of efficiency exists on Karachi Stock Exchange (KSE) or not. Sub Problem – One Whether the annual earnings announcement affect complete on the day of announcement? We will calculate the normal return and the expected return and if it is close to zero; we will say that the annual earnings announcement affect complete on the day of announcement Sub Problem – Two Share holders could not earn extra return; before, and after the announcement. We would first take the average of abnormal return and then cumulate the average abnormal return. In case where the AARs and the CAARs are closed to zero we will conclude our results that, investor or the share holder are not able to earn abnormal return by trading on event which is earnings announcement. Sub Problem – Three The Average Abnormal Returns (AARs) are random. We used Runs test to analyze the randomness in the behavior of Average Abnormal Returns (AARs). To check whether the average abnormal returns occur by chance or not, we carried out Runs test. In case where the observed numbers of runs are significantly different from the expected number of runs, we will conclude our finding as Average Abnormal Returns (AARs) do not occur randomly. Alternatively, if these results were not statistically significant, we say that Average Abnormal Returns (AARs) do occur randomly. We carried out runs test on Average Abnormal Returns (AARs) before and after the event day and also for the event window. Hypothesis Since the study empirically examine the Karachi Stock Exchange`s 100 Index reaction to Annual Earnings Announcement and the hypothesis being tested are: Hypothesis For Sub Problem One HO: Our null hypothesis for sub problem – one is that the stock prices reactions in response to the annual earnings announcement complete on the announcement day in addition to that, abnormal returns can`t be earn by the investors on stocks by trading on stocks after the announcement day. HO: Rit = AR = 0 H1: Rit = AR For testing above hypothesis we compute the estimated return for the event window and then compare it to the actual return, the estimated return will be calculated by using following equation; E (Rit) = ÃŽ ±i + ÃŽ ²i Rmt Under the null hypothesis if the estimated return of a stock is closed to zero we will accept the null hypothesis and if it is not than we will reject our hypothesis and bring to a close; that announcement do affect on returns. Hypothesis For Sub Problem Two HO: Our null hypothesis for sub problem – two is that returns are close to zero for average abnormal returns and their respective cumulative average abnormal returns for the selective securities in the study HO: AAR ≈ CAAR = 0 H1: AAR ≈ CAAR To test the above hypothesis first we will calculate the average abnormal return (AAR) and then cumulative average abnormal return (CAAR) with the help of the following formulae; For Average Abnormal Return ÃŽ £ ARit AAR it = i=1 . N Where, i = the number of securities in the study; N = total number of securities. t = the days surrounding the event-day For Cumulative Average Abnormal Return K CAARt = ÃŽ £ AARit Where, t = -30,0, +30. t = -30 If the average abnormal return and the cumulative average abnormal return are close to zero than we accept our null hypothesis otherwise we will reject it. 2.2.3 Hypothesis for Sub Problem – Three HO: Our null hypothesis for sub problem – three is that the difference between the no. of positive and negative average abnormal returns as not significant and they occur randomly. HO: Z = 0 H1: Z The null hypothesis of the test is that the observed series is a random series. A run is defined by Gibbons (1985), as â€Å"A succession of identical symbols which are followed or preceded by different symbols or no symbol at all† The run test is another approach to test and detect statistical dependencies (randomness). The number of runs is computed as a sequence of the price changes of the same sign (such as; + +, , 0 0). When the expected number of run is significantly different from the observed number of runs, the test rejects the null hypothesis that the daily returns are random. The run test converts the total number of runs into a Z statistic. For large samples the Z statistics gives the probability of difference between the actual and expected number of runs. The Z value is greater than or equal to + 1.96, reject the null hypothesis at 5% level of significance (Sharma and Kennedy, 1977). Literature Review There have been a lot of studies conducted on Efficient Market Hypothesis (EMH), a concept; developed by Fama (1960) and divided capital market into three parts on the basis of its efficiency namely weak, semi-strong and strong form. For the event study, which is linked with semi – strong form of market efficiency; below first we discuss the theoretical foundations and after that, the empirical evidence. Theoretical Foundations The origins of the Efficient Market Hypothesis (EMH) can be traced back to the work of two individuals, Eugene F. Fama (1960) and Paul A. Samuelson (1960). Remarkably, they independently developed the same basic concept of market efficiency from two rather different research agendas. These differences would drive them along two distinct trajectories leading to several other breakthroughs and milestones, all originating from their point of intersection, the Efficient Market Hypothesis (EMH). The EMH state that in an efficient market where many well-informed and intelligent investors operates, the stock price imitates all the existing information and no other information or analysis can be used to earn abnormal returns. The arguments of Fama (1965) form the theoretical foundation for the Efficient Market Hypothesis (EMH), which persuasively reasons that in an efficient and active market consisting of many well-informed investors, equity prices will appropriately reflect the effects of information based on present and future expected events. The strong form of the hypothesis asserts that the current market prices fully reflect all private (insider) and public information. In other words, insiders shouldn`t be able to earn excess returns from privileged asymmetric information. The strong form of the hypothesis represents an absolute standard, and in practice, market demonstrates only a certain degree of efficiency. Efficient Market Hypothesis (EMH) claims that speculative market prices fully and immediately reflect all available relevant information. Fama categorised information as: publicly available information, information that eventually becomes public, insider information. Event studies are used in tests of Efficient Market Hypothesis (EMH) to ask whether prices incorporate information fully on the day that the information is revealed. If Efficient Market Hypothesis (EMH) holds, the information about the event should be incorporated into prices before or on the day of the event itself. There should be no impact on returns after the event â€Å"There was little evidence on the central issues of corporate finance, now we are overwhelmed with results, mostly from event studies† (Fama, 1991, p. 1600) Event study analyses are typically used for two different purposes firstly as a test of semi-strong form market efficiency; and secondly as, assuming that the market efficiency hypothesis holds, as a tool for examining the impact of some event on the wealth of firms shareholders. Event studies measure security price changes in response to events. A single event study typically analyzes the average security price reaction to instances of the same type of event experienced by many firms. For example, the event could be the announcement of a merger. The event date can vary from one security to another in the same study, with dates measured in event time. Event studies have been used in a large variety of studies, including [mergers and acquisitions], earnings announcements, debt or equity issues, corporate reorganizations, investment decisions and corporate social responsibility MacKinlay (1997), McWilliams Siegel (1997). Empirical Evidence The debate about efficient markets has resulted in hundreds and thousands of empirical studies attempting to determine whether specific markets are in fact efficient and if so to what degree. Many novice investors are surprised to learn that a tremendous amount of evidence supports the Efficient Market Hypothesis (EMH). Since the late 1960s, the enormous study in the finance and accounting literature has recognized evidence of relationship between accounting reports and market reactions. Fama (1970) described an efficient market as having prices that â€Å"fully reflect† all available information. Beaver (1981) offers a definition of market efficiency based on the information distribution when investors have mixed beliefs. Accounting reports probably are one of the sources of public information. Ball Brown (1968) examine the relationship between the accounting reports stock prices . Their results show that the market reacts to unexpected earnings as though the market participants had access to the good or bad news prior to the availability of this news to the market. They estimate that only 10 to15 percent of the market reaction takes place during the announcement month. Using another approach, similar results are also found in the work of Ball and Brown (1968) they examined price changes surrounding the announcement of a firms annual earnings and found that the stock market reacts quickly to annual earnings announcements. Ball (1992) and Bernard Thomas (1989) and (1990), documented significant delays in the adjustment of stock prices to quarterly earnings announcements. Developed countries of the world such as the USA, the UK, and Australia, etc. the amounts of researches on Efficient Market Hypothesis are extensive. Fama, Fisher, Jensen and Roll (1969) conducted the first study on semi-strong form of Efficient Market Hypothesis (EMH). They examined the behaviour of abnormal returns at the announcements of stock splits and found that the market reaction is significant prior to the stock split announcement. Jordan (1973) assessed the behaviour of security prices surrounding the quarterly earnings announcements and found that stock market is efficient in the semi-strong form. In Asia until now some researches has been done. Kong, S. and Taghavi, M. (2006) study the Effect of Annual Earnings Anno

Creativity in Alice Walkers Color Purple Essay -- Color Purple Essays

Expressing Creativity in The Color Purple  Ã‚     Ã‚   In Alice Walker's The Color Purple, many characters at some point find a way of expressing their artistic creativity. For instance, Celie makes pants, and Shug Avery and Mary Agnes sing. But what is the significance of expressing creativity? If there is a relationship between artistic expression and one's personal development, what exactly is this relationship? I wish to answer these questions by examining Celie's case in particular. The key to the first question lies in the comment Albert makes on life while sewing with Celie on the porch, "If you ast yourself why you black or a man or a woman or a bush it don't mean nothing if you don't ast why you here, period" (289-290). It is about existence, about why we are here. However, this existence is not confirmed by others' acknowledgement. Rather, it depends only on one's awareness of one's own existence. Coming to such recognition, however, is a gradual process divided into several different stages. It starts with a power of creativity within a character (in the context of this novel, primarily a female character) that is unnoticed but screams to be released. When the character, usually with the inspiration of a role model, finds a vent for her creativity, it gushes out like a fountain. The character is often surprised at the art she is capable of creating, and soon comes to admire her own creation and creativity. From here she gains confidence, and comes to realize that she is here for a divine purpose: to express a beauty that God has created. In Walker’s essay "In Search of Our mothers" Gardens, she talks about the black mothers or grandmothers who are torn by their own creativity: These grandmothers and mothe... .... In making pants, she understands and affirms her own existence, and comes close to God. Walker, through the story of Celie, describes for us a process of development. It is a search into oneself for the purpose of one's existence. The answer is that we all possess a creative power that is divine, and when we find it, recognize it, and express it, we show that we are, each of us, God, who creates beauty and loves all.    Works Cited Walker, Alice. In Search of Our Mothers Gardens. New York: Harcourt Brace Jovanovich, 1983. - - -. The Color Purple. New York: Simon and Schuster, 1982.    Other Works Consulted Bloom, Harold ed. Alice Walker (Modern Critical Views). New York: Chelsea, 1989. Dixon, Melvin. Ride Out the Wilderness: Geography and Identity in Afro-American Literature. Chicago: Univ. of Illinois Press, 1987.    Creativity in Alice Walker's Color Purple Essay -- Color Purple Essays Expressing Creativity in The Color Purple  Ã‚     Ã‚   In Alice Walker's The Color Purple, many characters at some point find a way of expressing their artistic creativity. For instance, Celie makes pants, and Shug Avery and Mary Agnes sing. But what is the significance of expressing creativity? If there is a relationship between artistic expression and one's personal development, what exactly is this relationship? I wish to answer these questions by examining Celie's case in particular. The key to the first question lies in the comment Albert makes on life while sewing with Celie on the porch, "If you ast yourself why you black or a man or a woman or a bush it don't mean nothing if you don't ast why you here, period" (289-290). It is about existence, about why we are here. However, this existence is not confirmed by others' acknowledgement. Rather, it depends only on one's awareness of one's own existence. Coming to such recognition, however, is a gradual process divided into several different stages. It starts with a power of creativity within a character (in the context of this novel, primarily a female character) that is unnoticed but screams to be released. When the character, usually with the inspiration of a role model, finds a vent for her creativity, it gushes out like a fountain. The character is often surprised at the art she is capable of creating, and soon comes to admire her own creation and creativity. From here she gains confidence, and comes to realize that she is here for a divine purpose: to express a beauty that God has created. In Walker’s essay "In Search of Our mothers" Gardens, she talks about the black mothers or grandmothers who are torn by their own creativity: These grandmothers and mothe... .... In making pants, she understands and affirms her own existence, and comes close to God. Walker, through the story of Celie, describes for us a process of development. It is a search into oneself for the purpose of one's existence. The answer is that we all possess a creative power that is divine, and when we find it, recognize it, and express it, we show that we are, each of us, God, who creates beauty and loves all.    Works Cited Walker, Alice. In Search of Our Mothers Gardens. New York: Harcourt Brace Jovanovich, 1983. - - -. The Color Purple. New York: Simon and Schuster, 1982.    Other Works Consulted Bloom, Harold ed. Alice Walker (Modern Critical Views). New York: Chelsea, 1989. Dixon, Melvin. Ride Out the Wilderness: Geography and Identity in Afro-American Literature. Chicago: Univ. of Illinois Press, 1987.