Underwriting relationships, analysts' earning forecasts and investment recommendations

Article Abstract:

A study was conducted to determine the effect of investment banks' underwriting relationships on the earning forecasts and investment recommendations of analysts. Results show that growth forecasts and recommendations from both lead and co-underwriter analysts are more favorable than those from unaffiliated analysts, but their near-term earnings forecasts are relatively the same. Moreover, investors' response to 'Hold' recommendations from affiliated underwriters were more negative than the response to those from unaffiliated ones.

Investment Banking, Investment advice, Investment Advisory Services, Investment banks, Investment advisers, Business forecasting

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Option listing and the stock-price response to earnings announcements

Article Abstract:

Firms that have initiated option trading after 1986 did not report significant reduction in their respective stock-price earnings. Responses of 420 firms that initiated option trading within a period ranging from 1973 to 1993, however, show that option listing could raise stock-price response to earnings. Option listing, however, does not determine the reduction of such responses, which is supported by results of both longitudinal and cross-sectional tests.

Securities Dealers, Options (Finance), Stock options, Price-earnings ratio, Price earnings ratio

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Do analysts generate trade for their firms? Evidence from the Toronto stock exchange

Article Abstract:

Research is presented concerning the brokerage volume of uncovered and covered stocks handled by brokers. The relationship which exists between brokerage-firm volume and analyst coverage is discussed.

Securities Brokerage, Stock Brokerage, Management, Finance, Stockbrokers

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