and 30 days after were analyzed. The tools used for the analysis were theCumulative Abnormal Returns, Market Adjusted – Abnormal Returns and t-test of the returns from stocks.
Commentary of the Article
The sample frame for the article included the 137 enlisted companies that declareddividends during the period from October 2001 to September 2002. This frame waschosen as the period was considered to be politically and economically stable. Thegeneral elections have been concluded a while back and so political unrest wasconsidered to be low. However, the author failed to incorporate the after effects of the September 11, 2001 bombings that shook the global economy. These did havesome repercussions on the local Stock Exchanges as well. Also, comparisons oughtto have been made with a different time-period after the ironing out of the marketfrom the fall out in the 1997 crash. In addition, the second stock exchange in thecountry, the Chittagong Stock Exchange (CSE), should have been incorporated inorder to find the impact in the overall securities markets in Bangladesh. The comparisons in calculations of the CAR and the MARR were made with the DSEGeneral Index and not the indices of the individual industries to which the firmsbelonged. Industry-wide trends would have provided a more useful output from thestudy. However, as the focus of the study was purely academic, the general trend isperhaps not such a drawback either. The Cumulative Abnormal Return and Market Adjusted-Average Return tests werecombined with a t-test. The MAAR calculated the fluctuations in the returns from theindividual securities by comparing the returns on the security with the marketreturn. This tool is justifiable for gauging the effect of changes in security prices asa result of a particular event that affects prices. The CAR calculates a summation of all the MAARs in the market over the period of the study. Again, this is a goodindicator of the shifts in overall market as a result of dividend announcement. The t-test compares the means of the sample with the mean from the market. In order tocalculate this value, we do not need to know the standard deviation for the entirepopulation (all the shares in the market) and only 30 sample sizes would berequired. As we use 137 sample units, the author should have used a z-test as the