The information content of annual general meetings: evidence from the nairobi securities exchange

Abstract

The Annual General Meeting constitutes one of the main instruments that companies have to release information to stockholders and financial markets.The objective of the study was to assess AGM information content in the Nairobi Securities Exchange. The study employed descriptive research design using event study methodology which enabled the researcher to find an association between information released on the annual general meeting and stock returns. The target population consisted all 62 companies listed at the NSE. The study used secondary data from the Nairobi securities Exchange, Capital Markets Authority and Annual reports of the firm. The study followed the classical Brown and Warner (1985) event study’s methodology that computes abnormal returns (AR) as the difference between actual and expected returns. The findings of the study show that both the average abnormal returns and cumulative average abnormal returns are significantly different from zero. The market overreacts in anticipations of AGM announcement but corrects itself after the AGM news has been realised.