The effect of cross listing on share prices for the companies that are cross listed in the East Africa stock exchanges

Abstract

The main objective of this study is to establish whether there is a difference in share prices for companies that are cross listed and those that are not. This study is an event study, which will be conducted through a case study. The main sample consists of all foreign firms that cross-list common shares on NSE, DSE, and USE between January 2000 and January 2007, that share price data available on Data Sources for at least 2 years before and 2 years after cross-listing. This study was facilitated by the use of secondary data from annual reports of quoted companies. This data is available at the NSE Library and can also be obtained in company libraries. To identify the effect of cross-listing on the share prices for the companies that are cross listed in the East African Stock Exchanges, the study considers weekly share prices before and after cross-listing (in Kshs). From the findings one can safely conclude that the first day market adjusted returns were computed for the 3 stocks as shown in appendix 1. The stocks have an average return of between -0.416% and 0.711%.