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A Study on the Impact of Security Analysts' Monitoring and Marketing Functions on the Market Value of the Firms Included in the Philippine Composite Index (PHISIX) Covering the Period 1994-1997


The present study utilizes the Pearson's r. to establish the correlation between variables. Based on the correlation test conducted, the researcher found out that there is no significant relationship between security analysts' following and market value. Based on Pearson's r, there is no significant relationship between analyst’ following with firm size, trading volume, variability of stock return and mean value of share prices and number of shares outstanding. It is assumed that the firms included in the PHISIX are all large and quality firms in their respective industries. These firms have satisfied the criteria set by the PSE to be included in the PHISIX. Results show that analysts have an incentive to follow index stocks since they help aid their brokerage firms solicit clients. With investors' familiarity on index stocks, brokerage firms will find it easier to market such stocks. The study also proves that earnings announcements do affect stock prices. However, there are quarters when the null hypothesis is accepted.. One possible reason why an index stock may reject or accept the null hypothesis is due to the economic situation prevailing during the quarter observed.

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