Firm Factors and Share Returns of Secondary Equity Offers at Nairobi Securities Exchange, Kenya

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dc.contributor.authorMarangu, Kenneth
dc.contributor.authorMuathe, Stephen M. A.
dc.contributor.authorMwangi, Lucy
dc.date.accessioned2019-10-03T07:42:35Z
dc.date.available2019-10-03T07:42:35Z
dc.date.issued2019
dc.descriptionResearch Articleen_US
dc.description.abstractThis paper provides an empirical analysis of the effect of firm factors namely size, profitability, leverage and shareholding structure on share returns of secondary equity offers at Nairobi Securities Exchange in Kenya. An event study employing the market model determined share returns of 52 bonus issues and 28 rights issues announced between January 2006 and D ecember 2015. Multivariate linear regression analysis established the effect of size, profitability, leverage and shareholding structure on share returns of secondary equity offers obtained from the event study. The results of the event study indicate that secondary equity offer announcements had a significant positive effect on share returns and thus investors increased their wealth during the event period. The results of multivariate linear regression analysis revealed that profitability and shareholding structure had a significant positive effect on share returns, size had a significant negative effect on share returns while leverage did not affect share returns. The study recommends investors to participate in secondary equity offers of small sized profi table companies with a high proportion of institutional investors because they will realize positive share returns and increase their wealth. The study further recommends management of small sized and profitable companies with a high proportion of institut ional investors to raise capital through secondary equity offers as this will increase their market capitalization. The Capital Markets Authority and Nairobi Securities Exchange should consider size, profitability and shareholding structure when screening companies seeking approval to raise capital through secondary equity offers.en_US
dc.identifier.citationInternational Journal of Economics and Finance; Vol. 11, No. 6; 2019en_US
dc.identifier.issn1916-971X
dc.identifier.issn1916-9728
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/19714
dc.language.isoenen_US
dc.publisherCanadian Center of Science and Educationen_US
dc.subjectEvent studyen_US
dc.subjectFirm factorsen_US
dc.subjectNairobi Securities Exchangeen_US
dc.subjectSecondary equity offersen_US
dc.subjectShare returnsen_US
dc.titleFirm Factors and Share Returns of Secondary Equity Offers at Nairobi Securities Exchange, Kenyaen_US
dc.typeArticleen_US
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