Impact of Firm-Specific News Releases on Share Prices in Bank, Finance and Insurance Sectors of Colombo Stock Exchange

This paper examines the impact of firm-specific news releases on share price changes in bank, finance, and insurance sectors of the Sri Lankan stock market: Colombo Stock Exchange (CSE). The data is gathered from the CSE data base and annual reports for the daily share prices, All Share Price Index (ASPI), and news releases for the period from January 2017 to December 2018.

Two types of analysis were performed to identify the impact of firm-specific news releases on share prices, namely an individual company level analysis and industry level analysis. The findings of both the analysis indicate that relationship between firm specific information releases and changes in share prices is statistically insignificant except for dividend announcements. Further, research in this area is needed to substantiate the findings of this study using subcategories of the firm specific news releases.