Title: Is corporate fundamental analysis transparent to shareholders in transitional markets? Perspectives from Egypt

Authors: Tarek I. Eldomiaty, Ehab K.A. Mohamed, Mohamed H. Abdel-Azim

Addresses: Department of Finance, College of Business and Economics, United Arab Emirates University P.O. Box 17555 AL Ain, UAE. ' College of Commerce & Economics, Sultan Qaboos University, P.O. Box 20, AlKhod 123, Muscat, Oman. ' College of Business and Economics, United Arab Emirates University, P.O. Box 17555 AL Ain, UAE

Abstract: This study examines the extent to which the disclosed fundamental financial information is transparent to shareholders in Egypt|s stock market. The methodology employs the partial adjustment model to compare between three cases: disclosed, undisclosed and integrated fundamental financial information. The speed of adjusting market-to-book ratio can fairly be used to examine the issue of transparency. The results show that the disclosed financial information is relatively more transparent to the shareholders than the other two cases (undisclosed and integrated). Therefore, the disclosed financial information can fairly be used in the course of fundamental analysis in the Egyptian stock market.

Keywords: financial fundamental analysis; transparency; financial reporting; income statements; balance sheet; financial ratios; Egypt; transitional markets; financial information; shareholders; stock markets; disclosure.

DOI: 10.1504/IJLSE.2007.014580

International Journal of Liability and Scientific Enquiry, 2007 Vol.1 No.1/2, pp.50 - 65

Published online: 17 Jul 2007 *

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