Can Investors in the Stock Market Generate Profit from the Analysts? – An Empirical Analysis of Analysts’ Signals Disseminated from the Bloomberg Terminal

July 18, 2013 Leave a comment

Can Investors in the Stock Market Generate Profit from the Analysts? – An Empirical Analysis of Analysts’ Signals Disseminated from the Bloomberg Terminal

Katsuhiko Okada Kwansei Gakuin University Business School

Takahiro Azuma Independent

June 7, 2013

Abstract:      
Using a large database of Japanese analysts’ rating information over the period 2000-2010, we examine short term market reactions to the announcement. We find a significant market reaction to the information contained in the analysts’ rating. Particularly, the market reacts sensitively to the rating changes rather than the rating itself. We also examine whether investors are able to achieve a positive net return by taking advantage of the abnormal market reaction to the analysts’ signal by constructing a dynamic calendar time equity long-short portfolio. Results indicate that investors are able to capture some abnormal profit trading on such signals, however, large size investment based on the same strategy becomes implausible due to the transaction costs.

Filed under Research

China Won’t Have Large Stimulus This Year, Finance Minister Says

July 18, 2013 Leave a comment

China Won’t Have Large Stimulus This Year, Finance Minister Says

Chinese Finance Minister Lou Jiwei said the nation won’t use “large-scale fiscal stimulus” measures this year, adding to signals that the government will tolerate a slowdown in the economy. China will promote growth and boost employment while fine-tuning policies and keeping the fiscal deficit unchanged, and will also avoid big adjustments to short-term macroeconomic policies, Lou said in July 11 comments in meetings with U.S. officials in Washington. The remarks were posted yesterday on the Finance Ministry’s website. Premier Li Keqiang said this month that the nation should keep restructuring the economy as long as growth and employment stay above unspecified limits, even as a second-quarter slowdown in expansion increased risks that China will miss its 7.5 percent goal for the year. The government responded to the global financial crisis in 2008 with a 4 trillion yuan ($586 billion at the time) stimulus and a wave of bank lending. “From a policy perspective, China won’t roll out large-scale fiscal stimulus policies this year,” said Lou, who became finance minister in March. China “will promote economic growth and job creation and fine-tune policies, while keeping the fiscal deficit size unchanged.” Lou said in a press briefing at the Washington meetings last week that growth as low as 6.5 percent may be tolerable in the future. While the government in March set a 2013 growth goal of 7.5 percent, Lou said he’s confident 7 percent can be achieved this year. The official Xinhua News Agency later amended its English-language report on Lou to say there’s no doubt that China can achieve this year’s growth target of 7.5 percent.

To contact Bloomberg News staff for this story: Scott Lanman in Beijing at slanman@bloomberg.net

Filed under Macro Trends

China Resources Power fell the most in more than four years after Xinhua media said the power generator and the chairman of its state-owned parent intentionally overpaid for a 2010 acquisition

July 18, 2013 Leave a comment

China Resources Power Falls After Report of Deal Overpayment

China Resources Power Holdings Co. (836) fell the most in more than four years after the official Xinhua News Agency posted a letter on its website by one its reporters that said the power generator and the chairman of its state-owned parent intentionally overpaid for a 2010 acquisition.

The company’s shares fell as much as 11.8 percent, the biggest drop since Nov. 6, 2008, and were trading down 10.4 percent as of 2:20 p.m. in Hong Kong. The city’s benchmark Hang Seng Index was little changed. Read more of this post

Filed under Investing Process, Macro Trends

Fraud widespread in New Jersey free lunch program: state official

July 18, 2013 Leave a comment

Fraud widespread in New Jersey free lunch program: state official

11:30am EDT

By Hilary Russ

(Reuters) – New Jersey will refer 109 names to criminal investigators after a probe allegedly found pervasive fraud in the federal free and low-cost lunch program in the state’s schools, a state official said on Wednesday. The alleged fraudsters are all public employees, their spouses or members of their households, accused of lying about their income so that their children would qualify for federally subsidized reduced-price lunches, according to New Jersey Comptroller Matthew Boxer. Six of the names, which were not released, are elected school board officials. The 109 people underreported their household income by more than $13 million altogether over the three years of records and 15 school districts that Boxer’s office examined, according to his report. Read more of this post

Filed under Life

New Technology Could Make It Possible To Fly Anywhere In The World In 4 Hours; the new “Sabre” engine system could be cooled by more than 1,000 degrees Celsius in .01 seconds, enough to fly at five times the speed of sound

July 18, 2013 Leave a comment

New Technology Could Make It Possible To Fly Anywhere In The World In 4 Hours

ALEX DAVIES JUL. 16, 2013, 3:32 PM 25,959 44

British aerospace firm Reaction Engines is working on an aircraft it believes would be able to take passengers anywhere in the world in just four hours. The vehicle would also be able to fly in outer space. Reaction Engines says there’s only one truly new technology in the aircraft that makes those things possible: the precooler. In a new video, chief engineer Alan Bond explains that air entering the new “Sabre” engine system could be cooled by more than 1,000 degrees Celsius in .01 seconds. That ability would allow a jet engine to run at higher power than what is possible today. More power = more speed. Enough to fly at Mach 5, five times the speed of sound, “pretty easily,” Bond says. Read more of this post

Filed under TMT Trends

Plunging ad prices underscore doubts over Yahoo turnaround plan; “This is just the beginning of the trend, of the drop in the price per ad.”

July 18, 2013 Leave a comment

Plunging ad prices underscore doubts over Yahoo turnaround plan

Tue, Jul 16 2013

By Alexei Oreskovic

SAN FRANCISCO (Reuters) – Marissa Mayer’s plan to resuscitate Yahoo seems a simple one: get back the eyeballs, sell more ads and charge higher prices. But the chief executive’s plan seems to have run into a major snag. The price the company charges per ad slid 12 percent in the April to June period, six times the decline just a quarter ago – a fall that some say highlights how Yahoo has been caught unprepared for the industry shift to automated, programmatic ad buying. Marketers increasingly prefer to buy online advertising space through automated exchanges, where prices are significantly lower, rather than paying top-dollar for premium ads sold by a Web publisher’s salesforce. Ads offered by exchanges also allow marketers to aim ads in real time at specific audiences, such as by gender or age. Read more of this post

Filed under TMT Trends

Carson Block’s Muddy Waters Says American Tower May Tumble 40%

July 18, 2013 Leave a comment

Carson Block’s Muddy Waters Says American Tower May Tumble 40%

American Tower Corp. (AMT), the operator of cell-phone antennas whose stock has almost tripled since 2008, is engaged in a “value-destroying investment binge” that will knock its shares down 40 percent, according to short-seller Carson Block. “AMT has serious challenges domestically and internationally that have not been factored into the stock price,” Block’s firm, Muddy Waters Research, wrote in a report published on its website today. The Boston-based real-estate investment trust has a market value of $28.6 billion, data compiled by Bloomberg show. American Tower has overstated the value of acquisitions in the U.S. and Brazil, according to the report. The stock is worth $44.57 a share, about 40 percent below the trading price, Muddy Waters said. Shares retreated 3 percent to $72.50 at 10:22 a.m. in New York after falling as much as 4.3 percent. Matt Peterson, an American Tower spokesman, didn’t immediately respond to a message seeking comment. Read more of this post

Filed under TMT Trends

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