Effect of released financial statements on share prices: the case study of listed companies at Dar es Salaam Stock Exchange

The release of financial statements is believed to have effect on stock prices at stock market. This research work presents the findings on effect of released financial statements on share prices of selected listed companies at Dar es Salaam Stock Exchange. The study obtained information through secondary data strategy where the data were retrieved from the four companies’ websites. The data was analysed using a software programme statistical package for the social science (SPSS). The findings of this study revealed that dividends had insignificant impact on level of share prices of the selected firms at Dar es Salaam Stock exchange; similarly, the results was the same for earnings per share when tested against share price. Additionally, there was a positive correlation between the predictor variable dividends (DIV) and earnings per share (EPS) against dependent variable share prices (P). The findings of this study demonstrate that financial information had no impact on share prices. This means that investors did not consider them during investment decisions making; policy implications on this circumstance requires financial knowledge should be taught at all levels of education. Additionally, Capital Market and Security Authority (CMSA) and /or Dar es Salaam Stock Exchange (DSE) should introduce an arrangement in various zones of Tanzania in order to educate and provide advice to various stakeholders on security investments. On the basis of research results, this study recommends among others that financial education should be given to people as earlier as at primary school because this knowledge is vital to the economic growth of both investors and all the people. Moreover people’s illiteracy in financial information does not only affect an individual but affects the government as well as public and private institutions. The dissemination of financial information education can be done through various means, such as internet, magazines, newspapers, and other media; this will help the public to benefit from investing in the Stock Exchange. The study was guided by the theory of Efficient Market Hypothesis which states that it is impossible to beat the market since stock market efficiency causes the incorporation and reflection of all relevant information in the existing share prices.