Announcements effect of corporate bond issuance on share price returns: Evidence from three emerging markets

PurposeThe purpose of this paper is to investigate the effect of bond issuance announcements on share price returns in three emerging markets and examine the characteristics of bond issues that affect the abnormal share price returns of the company.Design/methodology/approachThis study employs event study, correlation and multiple regression techniques to attain the research objectives. The authors test hypotheses on 105 public listed companies from Malaysia, Singapore and Thailand, during the period of 2008–2014.FindingsThe findings show positive cumulative average abnormal returns resulting from the announcement of corporate bond issuance for Malaysia, Singapore and Thailand. The results reveal that there is a significant effect of bond issuance announcements on share price returns. The results also disclose that the market is not efficient at its semi-strong form as proposed by the market efficiency hypothesis.Originality/valueThe results provide better references for fund managers and investors in capital markets to take advantage of the abnormal returns resulting from bond issuance announcements.