Management disclosures in the industry sector: Capital Market reactions in Saudi Arabia

Abstract

In response to the research questions and the main objective of the study, which is to investigate the effects of management disclosures on stock prices, with the main focus on the Saudi Arabian stock market Tadawul All Share Index (TASI), the following are the key findings. There is a significant difference in terms of the consequences caused in the stock market between bad and good news. Bad news causes negative impacts on the on-stock prices, hence returns, while good news prompts better stock prices in Saudi markets. As a result of this finding, the study concluded that the market has a significant reaction to good or bad news. Another finding is that the study suggests that stock prices respond to different disclosure announcements. However, the findings revealed that the disclosure announcement may not have similar consequences as some prompt negative impacts on stock prices, while others prompt positive consequences. Based on the finding, the study concluded that Saudi Arabia's stock markets Tadawul All Share Index (TASI) responds to disclosure announcements.