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Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa
Dissertation (MBA)--University of Pretoria, 2010.
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| Format: | Thesis |
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University of Pretoria
2013
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| _version_ | 1867613617210261504 |
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| access_status_str | Open Access |
| author2 | Gunn, Ralph |
| author_browse | Gunn, Ralph |
| author_facet | Gunn, Ralph |
| collection | Thesis |
| dc_rights_str_mv | © 2010, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretori |
| description | Dissertation (MBA)--University of Pretoria, 2010. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/24877 |
| institution | University of Pretoria (South Africa) |
| last_indexed | 2026-06-10T12:38:59.552Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2013 |
| publishDateRange | 2013 |
| publishDateSort | 2013 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/24877 Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa Gunn, Ralph ichelp@gibs.co.za Mokale, Tebogo UCTD Abnormal returns Director trading Contrarian trading Dissertation (MBA)--University of Pretoria, 2010. Directors of listed companies earn abnormal returns by trading in a contrarian manner. This research report investigated whether outside investors can earn abnormal returns by following director contrarian trades. The returns to directors and outsiders, following a director trade were analysed using the event study methodology. The event study methodology utilised director trading information from SENS announcements on the JSE Securities Exchange, daily share prices, betas and price to book values for the selected companies, and daily all share index prices. The focus of the analysis was the post trade Cumulative Average Abnormal Returns (CAAR), in the 20 days following the director trade. The overall CAAR for all transactions was a statistically significant but economically insignificant 0.43%. When viewed from a transaction type perspective, the CAAR was 0.72% and 0.44% for purchases and sales transactions respectively. This study shows that while directors of listed South African companies do earn abnormal returns, they do not do so while consistently trading in a contrarian manner. In fact, transactions not deemed contrarian generated higher abnormal returns for directors. In addition, the study shows that outside investors do not earn abnormal returns by mimicking directors, and actually, their following of director trades generates the abnormal returns for directors. Copyright Gordon Institute of Business Science (GIBS) unrestricted 2013-09-06T18:37:59Z 2011-05-25 2013-09-06T18:37:59Z 2010-11-10 2010-05-25 2011-05-22 Dissertation Mokale, T 2010, Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://hdl.handle.net/2263/24877 > F11/390/ag http://hdl.handle.net/2263/24877 http://upetd.up.ac.za/thesis/available/etd-05222011-111043/ © 2010, University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretori application/pdf University of Pretoria |
| spellingShingle | UCTD Abnormal returns Director trading Contrarian trading Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa |
| title | Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa |
| title_full | Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa |
| title_fullStr | Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa |
| title_full_unstemmed | Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa |
| title_short | Does contrarian trading by directors provide a signal to outside investors for future abnormal returns in South Africa |
| title_sort | does contrarian trading by directors provide a signal to outside investors for future abnormal returns in south africa |
| topic | UCTD Abnormal returns Director trading Contrarian trading |
| url | http://hdl.handle.net/2263/24877 http://upetd.up.ac.za/thesis/available/etd-05222011-111043/ |