EVALUATION OF PRESS-RELEASES NARRATIVE TEXTS INFLUENCE IN PRICE OF BRAZILIAN COMPANIES’ SHARES

Resumen

Companies’ management decisions have the ability to change the choices of shareholders, investors, creditors and others interested in its performance. This knowledge is consider relevant news and should be disclosed as it happens, but not restrained to any regular interval. The facts disclosed usually occur in the narrative form, with no pre-established format, and it’s not subject to any audit inspection. This raises the issue of how the language used on these disclosures is able to affect the value of a share in the market. The approach of event study was used to conduct the study of a possible influence on the market price tendency for shares of companies listed on the Bolsa de Valores de São Paulo, during the years of 2006 and 2007. The press-releases disclosed during these years were extracted from the archives of Bovespa and Comissão de Valores Mobiliários, and classified subjectively as optimistic, pessimistic or neutral, according to the expression used in the narrative. The study investigates the behavior of the abnormal returns of shares in the period-enclosed prior and after the disclosure, on a total of 419 optimistic facts and 79 pessimistic. As a result, was observed a general tendency of decrease of the abnormal return of companies after the disclosure of pessimistic facts, while the abnormal returns linked to optimistic news showed no significant variation. Such observations show a conservative approach of the market, in considering good and bad news with caution, giving more importance to pessimistic announcements, rather than to optimistic ones.  Furthermore, the user should be able to identify the communication essence of the expression when it is revealed.