THE INFORMATION
CONTENT OF STOCK INVESTMENT PROVIDED BY THE TRADING OF MANAGEMENT AND LARGE
SHAREHOLDERS IN KLSE
By
This paper investigates the profitability and information content of insider trading in the Malaysia Stock Market. Research document insider trading activities of all companies listed on KLSE from November 2001 to October 2002. Insider trading becomes common in Malaysia. In this one-year time there are thousand of transactions. Due to time constraint, research only focus on the insider trading from the main board listed companies. In this study, the insiders are classified as management and large shareholders. Each of them has two types of transactions, purchase and sales. The main objective of this research is to compare the information content of insider trading provided by management and large shareholders. In order to achieve this objective, researcher base on the traditional event study calculate the abnormal return and cumulative abnormal return for each sample. In addition, using the normal distribution test statistic to exam the significant abnormal return for insider trading. The result of this research shows insider enable to generate abnormal return. That is consistent with the previous researches, but the result indicates that trading of large shareholders has more information content than management. That is contravention with previous study.
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B. A. (Hons) In Finance
Number: 5