Stock recommendations and stock market effects

Abstract

The aim of this study is to detect whether investors can earn abnormal returns based on market makers’ recommendations in Borsa Istanbul. To test the existence of market maker effect, buy recommendations mentioned by Ak Investment Inc. and stock returns traded on Borsa Istanbul are used. The event study was conducted for combined, pre- and post-event days covering the periods from January 2019 to April 2020. To enhance and compare the results, stocks are divided into five sub-groups based on the sectors they are traded in. The results indicate that stock recommendations do not provide valuable information to investors in Borsa Istanbul. Hovewer, while stocks traded in financial institutions are affected from buy recommendations of the market makers, investment strategies based on these recommendations would not generate any abnormal returns to investors for the rest of the sectors.

Keywords

• stock recommendations
• event study
• borsa istanbul
• hisse senedi tavsiyeleri
• olay çalışması
• borsa i̇stanbul