Do analysts' earning forecast disclosures affect share prices in the emerging Malaysian share market?

Abstract

This paper reveals that the ana lysts' consensus earning forecasts re lating to the listed firms traded in the eme rging Malaysian share market do not a ffect share prices, which is an expected result given the proven Fama-efficiency of this marke t. However, analysts' earnings forecast errors and their revisions appear to change share prices significantly ex post the re lease dates of analysts' earnings forecasts in this market. This is the first such finding to establis h a connection be tween analysts' forecast e rrors/revisions and share price changes in an emerging marke t setting. A similar body of evidence already exists for a few developed marke ts, where share prices are known to change following the disclosures of analysts' forecast errors/revisions. Further study of few more of the 67 emerging markets is advised before broader generalization can be made of these findings.