Investment banks' stock ratings, call warrant issuance, and responses from heterogeneous investors: Evidence from Taiwan

作者: Chih-Hsiang Chang , Kam C. Chan

DOI: 10.1016/J.IREF.2011.01.003

关键词: Conflict of interestProfit (economics)Stock (geology)BusinessInstitutional investorInvestment bankingFinancial systemWarrantStock marketStock exchange

摘要: Abstract We investigate the responses of different types investors on stock rating change announcements made by investment banks around call warrant issuances in Taiwan. The unique characteristics Taiwan warrants market allow to make for same stocks they rate. In Taiwan, are also dealers warrants, and thus, profit loss results from their business potentially conflict-of-interest ratings. Another feature allows us disentangle initiating trades. identify three investors: institutional investors, experienced retail ordinary investors. Our findings suggest that able “see-through” banks; partially conflict-of-interest, unable banks.

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