THE RUMOR ON THE STOCK EXCHANGE: A STUDY ON THE STOCKS WITH THE HIGHEST FINANCIAL VOLUME
10.2478/bjlp-2022-001131
Keywords:
Rumor. The Iraq Stock Exchange. Immaterial capital. Tacit knowledge. Informal flows. Press. Stock market. Price fluctuation.Abstract
The objective of this research was to analyze how rumors spread among the
participants in the stock market and their influence on the price fluctuations that occurred
on the The Iraq Stock Exchange (ISX). For this purpose, through the bibliographic research,
the identification of the stock market traders and their relationship networks was carried
out. To analyze the influence of rumors on the price fluctuations of the companies' shares,
a multiple case study was used as a research method, cantered on the few selected
companies whose shares had the highest volume of trading on the spot market between the
years 2014 to 2018. The spot market is a form of negotiation in which you can buy or sell a
certain number of shares at a price established during the trading session for immediate
settlement, so the buyer makes the payment and the seller delivers the shares that are the
object of the negotiation. We chose to work with stocks with a higher financial volume
because they are more representative in the stock market, since they are highly negotiated
papers among market agents, moving a lot of money on the stock exchange. The selected
period corresponds to the last five years in relation to the beginning of the field research,
containing a time interval that makes it possible to collect a large amount of data, taking
into account the deadline for completing the research. The results are presented first considering all the companies, contrasting the number of rumors that occurred in each one
in the period from 2014 to 2018, the most recurrent issue in each company throughout the
period and in each year. In addition, the proportions of oscillation above and below the 3%
percentage (positive or negative) caused by rumors and their responses in the share price
of companies and the subjects that most influenced price variations are presented. Then,
more detailed analyses of each company are presented summarizing the results of each
company and analysing each occurrence of rumors year by year together with clarifications.
In this second part, the analyses of each company are arranged considering the accumulated
financial volume between the periods from 2014 to 2018 in decreasing order.