Dividend payments and market reaction in emerging markets evidence from  Dar es Salaam stock exchange (SSE)

Masoli, Lihami

Dividend payments and market reaction in emerging markets evidence from Dar es Salaam stock exchange (SSE)

Date

2011

Authors

Masoli, Lihami

Publisher

University of Dar es Salaam

Abstract

Emerging markets add more to the “dividend puzzle” and recently attracted researchers trying to explain the dividend policy behavior and its reaction in the market. This study attempts to explain the “puzzle” by assessing the market reaction in response to dividend payments in emerging capital markets a case study of DSE. Data were collected from secondary data being market reports from DSE, and Published financial reports from listed companies. Multiple regression model was adopted to measure the relationship between the variables by using a software package called STATA. The results showed there is no significant relationship between share price and dividend payments in emerging capital market for the case study of DSE. While on the other hand, the study revealed there is a significant relationship between the firm’s perfomance (profit before tax) and share prices at DSE. Moreover, the study revealed there is no significant relationship between the firm’s maturity and Share prices. Therefore the study showed the market reaction on in response to dividend payments is not significant in emerging markets using case study of DSE. This Study recommends the management of the listed companies should continue on enhancing their dividend policies even though there is no significant relationship between share prices and dividend paid. Also, due to the nature of the movement of dividend payment and share prices, the management of DSE has to perform a lot of public sensitization to encourage Tanzanians participates in DSE.

Description

Available in print form

Keywords

Dividend payments, market reaction, emerging markets evidence f, from Dar es Salaam stock exchange (SSE)

Citation

Masoli, L (2011)Dividend payments and market reaction in emerging markets evidence from Dar es Salaam stock exchange (SSE), master dissertation, University of Dar es Salaam (available at)