Aza, Solomon Mangba2023-12-102023-12-102015-01-06Aza, S.M. (2015). Empirical Examination of Stock Price Reaction to Annual Earnings Announcement: A Study of Nigeria Stock Exchangehttps://keffi.nsuk.edu.ng/handle/20.500.14448/648This paper examined stock price reaction to annual earnings announcements of firms listed on Nigeria Stock Exchange. The period of study is 1st January 2008, to 31 December, 2013. Using the event study methodology, the magnitude of market reaction to the earnings announcements for a sample of 106 listed firms on NSE is tested. Abnormal returns (ARs) were computed for each firm and tested for how earnings announcements impacted on a firms' share price. The results show negative and significant reaction of stock price on the second month after announcement. Firms listed on NSE observed mean CAR of -1.8606, suggesting that earnings contain important information about the market. We find that there are no post earnings announcement drift observed over the next six months after the announcement. The paper conclude that stock prices changes in the Securities Exchange market with respect to earnings announcements, are not random but follow a pattern which makes it possible for positive abnormal returns to be gained by trading only on the month of earnings announcement as observed by significant and negative abnormal returns only on the second month after announcement it was recommend that NSE should implement a system that will disseminate the annual earnings announcements on stock prices and events such as share splits, bonus issues, dividend announcements, etc.enStock Price Reaction, Annual Earnings Announcement and Efficient Market HypothesesArticle