AN EMPIRICAL ANALYSIS ON SEMI STRONG FORM EFFICIENCY IN SELECT FMCG COMPANIES LISTED IN NSE

This study aims to examine the semi-strong form efficiency in FMCG sector. The FMCG sector is said to be efficient and quickly adjust to all publicly available new information in an unbiased fashion, so that any investors should not earn excess return by trading on that information. The major objectives of this study are to analyze the semi-strong form efficiency in FMCG sector, and to examine the stock market reaction to dividend announcement, to evaluate the risk of the stocks in particular index and to offer valuable suggestions to the investors to take the right investment decision. The study was conducted with the secondary data which was already published during the previous financial year (2013-14). An event study was conducted and dividend announcement was taken as the event. The purpose of the study was to find out whether the dividend announcement has impacted the NSE. The study is to prove semi-strong form of market efficiency in select FMCG companies listed in NSE. The select FMCG companies are Colgate Palmolive Ltd, Dabur India Ltd, Emami Ltd, Hindustan Unilever Ltd, McLeod Russel India Ltd, Procter & Gambel Hygiene & Health Care Ltd (P&G), Tata Global Beverage Ltd and United Breweries Ltd. It has been found that some companies were influenced positively and some other companies have been influenced negatively after the dividend announcement. These results confirm the theoretical background regarding the impact of dividend announcement on stock prices. The semi-strong form efficiency therefore is tested and proved.