Brazil’s Stock Market: What Happened with the Price of the Stocks Recommended by Independent House of Analysis
The capital market can be defined as a union of institutions and instruments that enables the transactions of
securities, and so facilitating resources transfers between buyers and sellers. Currently in this market, there are plenty of
opinion-forming companies, called independent houses of analysis, which make financial suggestions for their readers.
Considering the importance of this topic, this research aims to analyze the price of the stocksre commended by Brazil’s largest
independent house of analysis, through them abnormal returns. We studied 28 stocks that received a purchase recommendation
between January 2015 and October 2018.These stocks were grouped by segment, totaling 11 segments, and we calculated the
abnormal returns (AR) on the day of recommendation (AR0,j), on the subsequent day of the recommendation (AR1,j) and on
two subsequent days after the recommendation (AR2,j), using Brazil’s most important stock market index (IBOVESPA) as
reference. For the statistics purpose we used the T-Test and the ANOVA, adopting an error of 5%. As the result, we found a
positive mean abnormal return on the day of the stock purchase recommendation and on the two subsequent days (AR0,j =
1.15%, AR1,j = 0.27% and AR2,j = 0.21%). The ANOVA test showed that there was no statistical difference between the
abnormal return analysis of the distinct days (p = 0.1143). However, the T-test indicated a statistical difference between AR0,j
and AR1,j (p = 0.0450) and between AR0,j and AR2,j (p = 0.0320), but not between AR1,j and AR2,j (p=0.8911).
Keywords - Abnormal Return, Brazilian Stock Market, Independent House of Analysis, IBOVESPA