The behavior of financial analysts during the Asian financial crisis in Indonesia, Korea, Malaysia, and Thailand

Abstract

We investigate the forecasts made by security analysts in four countries Indonesia, Korea, Malaysia, and Thailand during the recent financial crisis Our study covers all or some of the period 1995-1998, with particular emphasis on the 1997 year end earnings We report empirical results on the following issues Whether 2 year and 1 year ahead forecasts anticipated the market crash? What is the magnitude of analyst forecast errors in this period compare to an earlier period') Is there a systematic over-optimistic bias for the overall sample, in large versus small firm, in relatively healthy versus poor performing firms? Whether there is a reduction in coverage, resulting in fewer firms covered, fewer brokers, or fewer forecast revisions?