THE EFFECT OF PUBLICLY ANNOUNCED NEWS AT AMMAN STOCK EXCHANGE EFFICIENCY

It is well known at the efficiency literature that emerging stock markets are inefficient, Amman Stock Exchange (ASE) is no exception, however; most of these studies are conducting using the weak form efficiency approach. This study used the semi-strong efficiency approach to measure ASE efficiency; it examined the effect of publically announced news on listed companies' stock prices. According to the capital markets efficiency literature, it is expect that if ASE is efficient, the publically announced good news will increase share prices, while bad news will have a negative effect on share prices. During the year 2017, several auditing firms disclosed much reservation about the financial annual reports of some listed companies, the companies' general controller at the Jordanian Ministry of Trade, in turn, sent to these companies', enquiries asking for clarifications about the auditors' reservations. ASE discloses, to the public, on the stock exchange website, the controller enquires which also include the auditor's reservation, such an announcement is consider as bad news about the concerned companies and it is expected to have a negative effect on their stock prices. Therefore, the problem of the study is to examine ASE efficiency based on this bad publically announced news. The sample of the study includes all listed companies at the ASE regular markets and received enquiries from the company's controller during the first half of 2017. Sixteen companies, all of them listed at the second market, are identifying to receive enquiries about their annual financial reports; all these companies analyzes at the study. The analytical descriptive approach and the Levine's Test and Independent Sample T-Test are use to test whether or not ASE is an efficient market. The study analyses conclude that ASE is an efficient market based on the semi-strong form efficiency approach. As thus, stock prices of listed companies at ASE are affected by publically disclosed news, they decline because of publically announced bad news