Does Exclusion from and Inclusion to Nifty Affect Equity Valuation? A Study with Reference to Metal Sector Stocks
Journal Title: Scholars Journal of Economics, Business and Management - Year 2017, Vol 4, Issue 2
Abstract
Abstract:The study examines the effect on the metal sector stock valuation caused by the exclusion from and inclusion into Nifty 50 index. The study also aims to check the semi-strong form of the market efficiency in the market, by taking a period of 20 years and having taken into consideration 12 events, 06 each from Exclusion and Inclusion. It was found that in case of the excluded companies the stock valuation got reduced in the pre event period but got reversed to its previous position at the end of event window. In case of the Inclusion there has been an increase in the stock valuation during the post event period of the event window. The information got adjusted very smoothly, ruling out the chances of abnormal returns. In both cases the semi strong form of market efficiency was proved. Keywords:Metal Industry, Exclusion, Inclusion, Market Efficiency, Stock Valuation, Nifty
Authors and Affiliations
AadilHussain Baba, Dr. N. V. R. Rajagopalan
Keywords
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