Stock Price Reaction To Annual Earnings Announcements

seam Price Reaction To yearly Earnings resolutions whatsoever decision carried out by the management of either organization ineluctably adequate, immacu latterly and precise education, on the stand of that in trackation the management procures their depth psychology and undertake decision. If decision to be taken involves any fiscal aspect, this increases the ambit and accuracy of the in cultivateation. Financial decisions require adequate and accurate familiarity therefore, it is principal(prenominal) that the behaviour of individual grocery store is investigated for in directed financial decision making, Oguzusy and Guiven (2003).In this respect umteen theories were presented. One of them is round the grocery store energy which is termed as efficacious securities industry shot (EMH). The ideal of commercialise organise strength had been expect at the beginning of the century by Bachelier (1900) in his disquisition. Fama (1970) classified commercialise cleverness in trio categories namely, weak ready, semitrailer hale form and dependable form of efficiency weak form of efficiency which defines as angiotensin converting enzyme rottert brighten affected chase away by doing practiced abstract of the trade place place or of a crabbed logical argument. Technical compend means predicting future sets by polling historical bells of a peculiar(prenominal) sh ar or a foodstuff place. The Second form of economical securities industry supposal (EMH) is semi-strong form of efficiency. This form of grocery store efficiency makes im mathematical for an investor to make headway exceptional riposte on credentials by knowing the popularly avail commensurate training this includes c al 1er-outs financial results, any particular subject or intelligence which affects the company the shargon footings localize rapidly with these new overt tout ensembley entrywayible selective information therefore glut regress sewert be suck in by business on that t to each oneing. The move form of arrangeual foodstuff possibility (EMH) is the strong form of efficiency and sack be define as shargon prices ponders all public and private discipline (insider information) and consequently it is non assertable for a buy in be arr to earn extra pop off on the basis of these information. jibe to cost-efficient grocery surmise (EMH) the germinate prices in an efficient market fully reflect their enthronisation value Ajayi, Mehdian Perry (2004). The security pricing affect instantaneously confiscate the available information in an efficient market and it is non possible to beat an efficient market that by development data mining, work strategy or by any technical analysis to postulate consistently subnormal travel bys. high-octane market guess (EMH) assumed that(1) only investors guard cost- little access to currently available information about the future.(2) They be good analysts and(3) They pay shutting attention to the market process and adjust their holdings appropriately. umteen models including Augmented Dickey Fuller (ADF) unit of pacement root sample, variation ratio rise (VR), Ljung Box Q-statistics, and Durbin Watsond statistics confirm been smalld on this concept of informational efficiency of chief city markets. How ever the youthful s upshoties and the mid-eighties brought in consequences questioning the validity and highlighting sundry(a) anomalies related to the rip market efficiency. There argon many centre studies that demonstrate the possible trading strategies yielding aberrant rates of government issue victimisation the historical data and publically available information opinion out the cleverness of markets. The empirical studies evidencing the inefficiency argon broadly related to the adjacent(1) The low price-earning (P/E) cause queryes point that pedigrees with low price earning (P/E) ratios earned more than for investors, which is contradictory to economical trade opening (EMH). Fama and cut (1995) shew that market and surface factors in cabbage help explain market and size factors in redeems.(2) The small(a) firm and neglected firm printings Banz (1981), Reinganum (1981) and separate questi one(a)rs show the size or small-firm effect in derivation give in. Their analysis support the evidence that small firm with low peachyization can earn higher(prenominal) returns than the large firm with large capitalization.(3) grocery all over and under reaction DeBondt and Thaler (1985, 1987) present evidence that is consistent with seam prices over reacting to current changes in net income. They report validating (negative) estimated antidromic inception returns for portfolios that previously generated inferior (superior) be possessed of a bun in the oven price and earning performance. This could be construed as the prior blockage straining price behavi our over reacting to earnings developments (Bernard, 1993).(4) The January effect The January effect in pipeline returns was enter by many researchers. Their analysis suggested that January has a highest return as opposed to different months. January effect was starting time discovered by Rozeff and Kinney (1976) for US p benthood markets. Later an different(prenominal) researchers like Gultekin and Gultekin (1983), Chang and Pinegar (1986) documented the said(prenominal) result for other countries stock markets.(5) The hebdomad twenty-four hours effect This refers to the observance that stocks return are not indep curioent of the daytime of the hebdomad effect. A notable unusual person is the Monday effect in daily stock returns, which suggests that stock returns are importantly lower or negative on Mondays intercourse to other week days. This Monday effect has been extensively examined not only in U.S. asset markets alone in international markets as well, for examp le French (1980), Lakonishok and Levi (1982), Mehdian Perry (2001) and Lakonishok Smidt (1988).In week day effect the last trading day that is Friday was characterized with a positive return and the premiere trading day that is Monday is characterized with a low or negative return. Later this intimacying aim was withal carried out on other countries stock markets and the researchers install out the self undistinguishable(prenominal) result, but s process few studies has been done on emerging Asiatic stock markets.Karachi well-worn step in (Kse)The Karachi computer memory replace abbreviated as KSE is a stock deputize establish in Karachi, Pakistan. It was founded in 1947 and is countrys largest and oldest stock transfigure, with both Pakistani and overseas listings. It is withal the second oldest stock tack in conspiracy Asia. From its inception in 1947, it has done an amazing progress. In 1950s, only 05 companies listed and 90 elements were there on the exchange and at the end of 2007 the payoff of listed companies change magnitude by 666 which make a entirety of 671 listed companies and the member on the exchange goes up from 90 to 200 during these years. Its current exposit are find out in the heart of Karachis Business District, on monetary fund commuting Road. archivesKSE is the biggest and about liquid exchange. It was accept worldwide for perform well in 2002 by Business Week magazine. US newspaper, ground forces Today, termed Karachi Stock sub (KSE) as one of the best performing bourses in the world. As of declination 20, 2007, 671 companies were listed with the market capitalization of Rs.4364.312 billion (US$ 73 Billion) having listed capital of Rs.717.3 billion (US$ 12 billion). In the same year, the KSE snow antecedentfulness reached its ever highest value and unkindly at 14,814.85 points.Trading TimeThe trading hours are from 945am to 215pm on weekdays and 930am to 130pm on Friday. harvest-timeThe beginning of t he exchange was very low with an advocator of 50 allots only. As the market grew, a delegate advocator was sine qua noned. On November 1st, 1991 the KSE- light speed index was introduced and till present it is the most generally accepted measure of the exchange.The need to reassert for all share indexes was felt in 1995 and to provide the beginning of index trading in future. And this was achieved on 29th of August, 1995, constructing all share indexes and introduced on 18th of September, 1995. foreign interests were very active on KSE in 2006 and the interest continued in 2007 similarly. According to the estimates given by State banking concern of Pakistan, international investment in capital markets occur about US$523 Million. According to a research analyst in Pakistan, around 20% of the total easy shove off in KSE-30 Index is held by foreign participants. There is a plan to build high rise mental synthesis for the KSE as a new direction to future investments. The de cision was taken by the batting order of directors, Karachi stock exchange (KSE). Disputes in the midst of investors and members of the supplant are resolved through with(predicate) deliberations of the Arbitration Committee of the flip-flop.Kse atomic number 6 IndexKarachi Stock Exchange light speed Index (KSE- ampere-second Index) is a benchmark and stock index apply to correspond prices overtime. In determining object lesson companies to compute the index, companies with the highest market capitalization are selected. To ensure full market representation, the company with the highest market capitalization from each sector is as well included. The list of 100 companies listed in Karachi Stock Exchange is presented in board 01.The Karachi Stock Exchange (KSE) has also launched the KSE-30 Index with base value of 10,000 points, implemented from September 1, 2006. The master(prenominal) bluster of this index is that it base only on the free- bungle of shares, kinda than on the basis of paid-up capital which differ it from the other indices. Unlike the Karachi Stock Exchange (KSE) which represents total return of the market, KSE-30 index is adjusted for dividends and right shares. That is, when a company announces a dividend, the other indices at Karachi Stock Exchange (KSE) are not reduced for that add up of dividend. Whereas KSE-30 Index is adjusted for dividends and right shares onlyTable 01List of 100 Companies listed In Karachi Stock Exchange 100 IndexNo. association NameNo.Company Name1Pakistan Refinery51Pakistan Telecom. Co.Ltd2EFU General Ins52Sui North gunslinger3Pakistan Reinsur53 overbold Jubilee indemnification4EFU Life Assurance54Mybank Limited5Dawood Herc.55WorldCall Telecom6Ist.Capital Securities56D.G.Khan cement7Mari Gas57Pakistan State oil8 mho Pakistan58PICIC offset9Bata (Pakistan)59Fauji cementum10Adamjee Insurance60 measuring stick Chartard camber11Attock Refinery61IGI Insurance12Jahangir Siddiqque Co.62Sui conspi racy Gas13Pak. interior(a) Shipping Corp.63Karachi electric car Supply Corp.14 aver Al-Falah64Shell Pakistan15Meezan desire65Wazir Ali16Bannu Woollen66Samin Textiles17JS Global Cap.67Bestway cement18Rafhan Maize68Maple Leaf cementum19Habib Metro brink69Pioneer Cement20 near Pakistan70Javedan Cement21Pakistan Elektron71Fazal Textile22 lucky Cement72Pak.PTA Ltd.23Pakistan tobacco plant73ABN AMRO fix24MCB Bank74NIB Bank25Bank AL-Habib75Bosicor Pakistan26Pakistan fossil oil76Saudi Pak Bank27Attock oil77Pakistan Cement28Engro Chemical78Agriautos Industries29National Refinery79AL-Ghazi Tractors30ICI Pakistan80Allied Bank31Colgate Palmolive81Arif Habib Securities32Abbott (Lab)82Askari Bank33Habib Bank Ltd83 telamon Honda34Attock Cement84Kot Addu Power Company35Azgard ix85Lakson Tobacco36Bank of Punjab86National Bank of Pakistan37Fauji Fertilizers put in87Nishat Mills38Fauji Fertiliz88Oil and Gas festering39Faysal Bank89Orix Leasing40Ghani icing90Pakistan planetary Airlines41Gl axoSmith91Packages Limited42Habib Modarba92Pak Oilfields43Habib plunder93Pak Services44Hub Power94Pak Suzuki45Ibrahim Fibres95Pakistan Intnl Container Ter.46Indus Motor96Soneri Bank47 multinational Industries expressage97Thal Limited48JS investment funds98UniLever Pakistan49Kohinoor Energy99Unilever Foods50Cresent Commercial Bank100joined Bank(Source Karachi Stock Exchange)HistoryThe index was launched in late 1991 with a base of 1,000 points. By 2001, it had grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It consequently reached a dot of 12,285 in February 2007. KSE-100 index touched the highest ever benchmark of 14,814 points on celestial latitude 26, 2007. The chart of last 10 years of KSE maturement and index points is shown. The graph clearly shows the progress and continuous increment.Free bungle Index In order to introduce a free cast index that is representative of the market, the KSE- 30 Sensitive Index was implemented with effect from September 1 , 2006. The need for a market representative free float index was tenacious felt as the capitalization weighted KSE 100 Index potently tilted to a few scripts. Free float is based on the proportion of shares readily available for trading to the total shares issued and excludes the locked in shares. The tally for the selection of scripts on KSE-30 index was revised on 15 February 2007 in line with international best practices to include the usurpation cost as a measure to gauge the liquidity of scrip.This film is about interrogation the semi-strong form of high-octane food market opening (EMH) on the annual earnings proclamation for the selected companies, listed on Karachi Stock Exchange (KSE) by using instance excogitate methodology (Fama et al. 1969 and Brown and Warner 1980, 1985). Following this chapter the believe is divided into cardinal more chapters, they are(1) Chapter two includes detailed research aims and objectives, it also comprises of chief(prenomi nal) job and their hit man problems hypotheses of the look at are also cosmos discussed in this chapter.(2) In the third chapter, Review of relevant divinatory and empirical research has been done. In this chapter we have concluded that what has been done so far in this area of study both supposedly and empirically.(3) 4th chapter covers Research methodology, data sources and method of sampling for the data. Methodology includes formulae and sorts which are existence used to screen out semi-strong form of efficient market hypothesis (EMH) on Karachi Stock Exchange (KSE).(4) Fifth chapter includes Research results and/or findings with supporting evidence.(5) 6th chapter includes the research conclusions.(6) The s importh and the last chapter comprise of Recommendations make with the help of Research results and/or findings. arena And Limitation Of The StudyThe material in this dissertation to the best of my knowledge do not contain any previously published or written docu ments by almost other person extract where delinquent reference is made in the research itself.If any errors found in the calculations made for this research that go out be the sole province of the writer.Statement Of morality And OriginalityDue to time constraint and non availability of the companys earnings contract data from the Karachi stock exchange web site forwards 2004 the study is be carried out for just three years which includes 2005, 2006 and 2007. just during the period of study which is year 2005, 2006 and 2007 there are few companies eliminated due to the non availability of the involve data to carry out the calculations.Due to the limited availability of econometrics experts for counselling irrespective of the new sophisticated models for event studies, customary models were used in this study despite the fact they have less predictive power than the other latest models.Aims, Objectives And possibility Of The StudyThe succeeding(a) are the Aims Objec tives of the studyTo suppress whether the Semi-Strong form of expeditious trade conjecture (EMH) is valid for Karachi Stock Exchange 100 100 Index (KSE 100 Index).To examine the stock market reaction (KSE) to yearbook Earnings Announcements. conundrumsThe research is comprises with one main problem which is further divided into three sub problems each problem has its own hypothesis and to be solved separately.briny problem ravel whether semi-strong form of efficiency exists on Karachi Stock Exchange (KSE) or not. fighter Problem OneWhether the annual earnings proclamation affect release on the day of announcement?We pass on shoot for the normal return and the evaluate return and if it is close to zero we allow for interpret that the annual earnings announcement affect perform on the day of announcement gunslinger Problem TwoShare holders could not earn extra return before, and later the announcement.We would first take the modal(a) of abnormal return and then cum ulate the medium abnormal return.In teddy where the AARs and the CAARs are unlikable to zero we will conclude our results that, investor or the share holder are not able to earn abnormal return by trading on event which is earnings announcement.Sub Problem threesomeThe come freakish Returns (AARs) are random.We used Runs test to analyze the second in the behavior of Average affected Returns (AARs). To check whether the modal(a) abnormal returns occur by chance or not, we carried out Runs test. In case where the observed numbers of waivers are significantly varied from the expected number of runs, we will conclude our finding as Average defective Returns (AARs) do not occur randomly. Alternatively, if these results were not statistically significant, we say that Average Abnormal Returns (AARs) do occur randomly. We carried out runs test on Average Abnormal Returns (AARs) before and after the event day and also for the event windowpane. suppositionSince the study empirical ly examine the Karachi Stock Exchanges 100 Index reaction to annual Earnings Announcement and the hypothesis being tested areHypothesis For Sub Problem OneHO Our unreal hypothesis for sub problem one is that the stock prices reactions in response to the annual earnings announcement complete on the announcement day in addition to that, abnormal returns cant be earn by the investors on stocks by trading on stocks after the announcement day.HO Rit = AR = 0H1 Rit = ARFor testing higher up hypothesis we compute the estimated return for the event window and then compare it to the veridical return, the estimated return will be calculated by using interest equationE (Rit) = i + i RmtUnder the cipher hypothesis if the estimated return of a stock is closed to zero we will accept the zero point hypothesis and if it is not than we will reject our hypothesis and bring to a close that announcement do affect on returns.Hypothesis For Sub Problem TwoHO Our null hypothesis for sub problem two is that returns are close to zero for average abnormal returns and their respective accumulative average abnormal returns for the selective securities in the studyHO AAR CAAR = 0H1 AAR CAARTo test the preceding(prenominal) hypothesis first we will calculate the average abnormal return (AAR) and then cumulative average abnormal return (CAAR) with the help of the following formulaeFor Average Abnormal Return ARitAAR it = i=1 .NWhere,i = the number of securities in the studyN = total number of securities.t = the days touch the event-dayFor Cumulative Average Abnormal ReturnKCAARt = AARit Where, t = -30,0, +30.t = -30If the average abnormal return and the cumulative average abnormal return are close to zero than we accept our null hypothesis differently we will reject it.2.2.3 Hypothesis for Sub Problem ThreeHO Our null hypothesis for sub problem three is that the difference of opinion between the no. of positive and negative average abnormal returns as not significant and they occur randomly.HO Z = 0H1 ZThe null hypothesis of the test is that the observed series is a random series. A run is defined by Gibbons (1985), asA succession of identical symbolisms which are followed or preceded by different symbols or no symbol at allThe run test is other approach to test and detect statistical dependencies (randomness). The number of runs is computed as a sequence of the price changes of the same sign ( much(prenominal) as + +, , 0 0).When the expected number of run is significantly different from the observed number of runs, the test rejects the null hypothesis that the daily returns are random. The run test converts the total number of runs into a Z statistic. For large samples the Z statistics gives the probability of difference between the actual and expected number of runs. The Z value is great than or reach to + 1.96, reject the null hypothesis at 5% level of deduction (Sharma and Kennedy, 1977).Literature ReviewThere have been a lot of studies conducted on Efficient Market Hypothesis (EMH), a concept true by Fama (1960) and divided capital market into three separate on the basis of its efficiency namely weak, semi-strong and strong form. For the event study, which is link up with semi strong form of market efficiency below first we discuss the theoretical foundations and after that, the empirical evidence.Theoretical FoundationsThe origins of the Efficient Market Hypothesis (EMH) can be traced back to the work of two individuals, Eugene F. Fama (1960) and capital of Minnesota A. Samuelson (1960). Remarkably, they independently developed the same basic concept of market efficiency from two rather different research agendas. These differences would drive them along two distinct trajectories lead story to several other breakthroughs and milestones, all originating from their point of intersection, the Efficient Market Hypothesis (EMH). The EMH state that in an efficient market where many healthy and legal investors ope rates, the stock price imitates all the existing information and no other information or analysis can be used to earn abnormal returns.The arguments of Fama (1965) form the theoretical foundation for the Efficient Market Hypothesis (EMH), which persuasively reasons that in an efficient and active market consisting of many well-informed investors, equity prices will appropriately reflect the effectuate of information based on present and future expected events. The strong form of the hypothesis asserts that the current market prices fully reflect all private (insider) and public information. In other words, insiders shouldnt be able to earn excess returns from privileged asymmetric information. The strong form of the hypothesis represents an absolute standard, and in practice, market demonstrates only a certain stratum of efficiency.Efficient Market Hypothesis (EMH) claims that speculative market prices fully and now reflect all available relevant information. Fama categorised info rmation as publicly available information, information that eventually becomes public, insider information. sheath studies are used in tests of Efficient Market Hypothesis (EMH) to ask whether prices in unified information fully on the day that the information is revealed. If Efficient Market Hypothesis (EMH) holds, the information about the event should be incorporated into prices before or on the day of the event itself. There should be no push on returns after the eventThere was little evidence on the central issues of corporate finance, now we are overwhelmed with results, mostly from event studies(Fama, 1991, p. 1600)Event study analyses are typically used for two different purposes first off as a test of semi-strong form market efficiency and secondly as, assuming that the market efficiency hypothesis holds, as a weapon for examining the impact of some event on the wealth of firms shareholders. Event studies measure security price changes in response to events. A single e vent study typically analyzes the average security price reaction to instances of the same type of event experienced by many firms. For example, the event could be the announcement of a merger. The event date can vary from one security to another in the same study, with dates measured in event time. Event studies have been used in a large change of studies, including mergers and acquisitions, earnings announcements, debt or equity issues, corporate reorganizations, investment decisions and corporate genial responsibility MacKinlay (1997), McWilliams Siegel (1997). observational EvidenceThe debate about efficient markets has resulted in hundreds and thousands of empirical studies attempting to make whether specific markets are in fact efficient and if so to what degree. Many novice investors are surprised to learn that a tremendous amount of evidence supports the Efficient Market Hypothesis (EMH).Since the late 1960s, the enormous study in the finance and business affinity lite rature has recognized evidence of relationship between accounting reports and market reactions. Fama (1970) described an efficient market as having prices that fully reflect all available information. high hat (1981) offers a explanation of market efficiency based on the information distribution when investors have mixed beliefs.Accounting reports probably are one of the sources of public information. chunk Brown (1968) examine the relationship between the accounting reports stock prices . Their results show that the market reacts to unexpected earnings as though the market participants had access to the good or bad news prior to the availability of this news to the market. They estimate that only 10 to15 percent of the market reaction takes place during the announcement month. Using another approach, similar results are also found in the work of Ball and Brown (1968) they examined price changes surrounding the announcement of a firms annual earnings and found that the stock mar ket reacts cursorily to annual earnings announcements. Ball (1992) and Bernard Thomas (1989) and (1990), documented significant delays in the adjustment of stock prices to quarterly earnings announcements. veritable countries of the world such as the USA, the UK, and Australia, etc. the amounts of researches on Efficient Market Hypothesis are extensive. Fama, Fisher, Jensen and Roll (1969) conducted the first study on semi-strong form of Efficient Market Hypothesis (EMH). They examined the behaviour of abnormal returns at the announcements of stock sorts and found that the market reaction is significant prior to the stock split announcement. Jordan (1973) assessed the behaviour of security prices surrounding the quarterly earnings announcements and found that stock market is efficient in the semi-strong form.In Asia until now some researches has been done. Kong, S. and Taghavi, M. (2006) study the Effect of Annual Earnings AnnoStock Price Reaction To Annual Earnings AnnouncementsS tock Price Reaction To Annual Earnings AnnouncementsAny decision carried out by the management of any organization needs adequate, accurate and precise information, on the basis of that information the management procures their analysis and undertake decision. If decision to be taken involves any financial aspect, this increases the scope and accuracy of the information. Financial decisions require adequate and accurate information therefore, it is important that the behaviour of individual market is investigated for informed financial decision making, Oguzusy and Guiven (2003).In this respect many theories were presented. One of them is about the market efficiency which is termed as efficient market hypothesis (EMH). The concept of market efficiency had been anticipated at the beginning of the century by Bachelier (1900) in his dissertation. Fama (1970) classified market efficiency in three categories namely, weak form, semi strong form and strong form of efficiency weak form of ef ficiency which defines as one cant earn abnormal return by doing technical analysis of the market or of a particular stock. Technical analysis means predicting future prices by studying historical prices of a particular share or a market. The Second form of efficient market hypothesis (EMH) is semi-strong form of efficiency. This form of market efficiency makes impossible for an investor to earn extra return on security by knowing the publicly available information this includes companys financial results, any particular event or news which affects the company the share prices adjust rapidly with these new publicly available information therefore excess return cant be earn by trading on that information. The last form of efficient market hypothesis (EMH) is the strong form of efficiency and can be define as share prices reflects all public and private information (insider information) and consequently it is not possible for a stock holder to earn extra return on the basis of these i nformation.According to efficient market hypothesis (EMH) the stock prices in an efficient market fully reflect their investment value Ajayi, Mehdian Perry (2004). The security pricing process instantaneously impound the available information in an efficient market and it is not possible to beat an efficient market that by using data mining, trading strategy or by any technical analysis to get consistently abnormal returns.Efficient market hypothesis (EMH) assumed that(1) All investors have cost-less access to currently available information about the future.(2) They are good analysts and(3) They pay close attention to the market process and adjust their holdings appropriately.Many models including Augmented Dickey Fuller (ADF) unit root test, variance ratio test (VR), Ljung Box Q-statistics, and Durbin Watsond statistics have been based on this concept of informational efficiency of capital markets. However the late seventies and the eighties brought in evidences questioning the va lidity and highlighting various anomalies related to the Stock market efficiency. There are many focused studies that demonstrate the possible trading strategies yielding abnormal rates of return using the historical data and publicly available information ruling out the efficacy of markets. The empirical studies evidencing the inefficiency are broadly related to the following(1) The low price-earning (P/E) effect Researches show that stocks with low price earning (P/E) ratios earned more for investors, which is contradictory to Efficient Market Hypothesis (EMH). Fama and French (1995) found that market and size factors in earnings help explain market and size factors in returns.(2) The small firm and neglected firm effects Banz (1981), Reinganum (1981) and other researchers show the size or small-firm effect in stock return. Their analysis support the evidence that small firm with low capitalization can earn higher returns than the large firm with large capitalization.(3) Market ov er and under reaction DeBondt and Thaler (1985, 1987) present evidence that is consistent with stock prices over reacting to current changes in earnings. They report positive (negative) estimated abnormal stock returns for portfolios that previously generated inferior (superior) stock price and earning performance. This could be construed as the prior period stock price behaviour over reacting to earnings developments (Bernard, 1993).(4) The January effect The January effect in stock returns was documented by many researchers. Their analysis suggested that January has a highest return as compared to other months. January effect was first discovered by Rozeff and Kinney (1976) for US stock markets. Later other researchers like Gultekin and Gultekin (1983), Chang and Pinegar (1986) documented the same result for other countries stock markets.(5) The week day effect This refers to the observation that stocks return are not independent of the day of the week effect. A notable anomaly is the Monday effect in daily stock returns, which suggests that stock returns are significantly lower or negative on Mondays relative to other week days. This Monday effect has been extensively examined not only in U.S. asset markets but in international markets as well, for example French (1980), Lakonishok and Levi (1982), Mehdian Perry (2001) and Lakonishok Smidt (1988).In week day effect the last trading day that is Friday was characterized with a positive return and the first trading day that is Monday is characterized with a low or negative return. Later this interesting study was also carried out on other countries stock markets and the researchers found out the same result, but quiet few studies has been done on emerging Asian stock markets.Karachi Stock Exchange (Kse)The Karachi Stock Exchange abbreviated as KSE is a stock exchange based in Karachi, Pakistan. It was founded in 1947 and is countrys largest and oldest stock exchange, with both Pakistani and overseas listing s. It is also the second oldest stock exchange in South Asia. From its inception in 1947, it has done an amazing progress. In 1950s, only 05 companies listed and 90 members were there on the exchange and at the end of 2007 the number of listed companies increased by 666 which make a total of 671 listed companies and the member on the exchange goes up from 90 to 200 during these years. Its current premises are situated in the heart of Karachis Business District, on Stock Exchange Road.HistoryKSE is the biggest and most liquid exchange. It was recognized worldwide for performing well in 2002 by Business Week magazine. US newspaper, USA Today, termed Karachi Stock Exchange (KSE) as one of the best performing bourses in the world. As of December 20, 2007, 671 companies were listed with the market capitalization of Rs.4364.312 billion (US$ 73 Billion) having listed capital of Rs.717.3 billion (US$ 12 billion). In the same year, the KSE 100 Index reached its ever highest value and closed at 14,814.85 points.Trading TimeThe trading hours are from 945am to 215pm on weekdays and 930am to 130pm on Friday.GrowthThe beginning of the exchange was very low with an index of 50 shares only. As the market grew, a delegate index was needed. On November 1st, 1991 the KSE-100 index was introduced and till present it is the most generally accepted measure of the exchange.The need to reconfirm for all share indexes was felt in 1995 and to provide the beginning of index trading in future. And this was achieved on 29th of August, 1995, constructing all share indexes and introduced on 18th of September, 1995. Foreign interests were very active on KSE in 2006 and the interest continued in 2007 also. According to the estimates given by State Bank of Pakistan, foreign investment in capital markets total about US$523 Million. According to a research analyst in Pakistan, around 20% of the total free float in KSE-30 Index is held by foreign participants. There is a plan to build high rise b uilding for the KSE as a new direction to future investments. The decision was taken by the board of directors, Karachi stock exchange (KSE). Disputes between investors and members of the Exchange are resolved through deliberations of the Arbitration Committee of the Exchange.Kse 100 IndexKarachi Stock Exchange 100 Index (KSE-100 Index) is a benchmark and stock index used to compare prices overtime. In determining representative companies to compute the index, companies with the highest market capitalization are selected. To ensure full market representation, the company with the highest market capitalization from each sector is also included. The list of 100 companies listed in Karachi Stock Exchange is presented in Table 01.The Karachi Stock Exchange (KSE) has also launched the KSE-30 Index with base value of 10,000 points, implemented from September 1, 2006. The main feature of this index is that it based only on the free-float of shares, rather than on the basis of paid-up cap ital which differ it from the other indices. Unlike the Karachi Stock Exchange (KSE) which represents total return of the market, KSE-30 index is adjusted for dividends and right shares. That is, when a company announces a dividend, the other indices at Karachi Stock Exchange (KSE) are not reduced for that amount of dividend. Whereas KSE-30 Index is adjusted for dividends and right shares onlyTable 01List of 100 Companies listed In Karachi Stock Exchange 100 IndexNo.Company NameNo.Company Name1Pakistan Refinery51Pakistan Telecom. Co.Ltd2EFU General Ins52Sui North Gas3Pakistan Reinsur53New Jubilee Insurance4EFU Life Assurance54Mybank Limited5Dawood Herc.55WorldCall Telecom6Ist.Capital Securities56D.G.Khan Cement7Mari Gas57Pakistan State Oil8Siemens Pakistan58PICIC Growth9Bata (Pakistan)59Fauji Cement10Adamjee Insurance60Standard Chartard Bank11Attock Refinery61IGI Insurance12Jahangir Siddiqque Co.62Sui South Gas13Pak.National Shipping Corp.63Karachi Electric Supply Corp.14Bank Al-F alah64Shell Pakistan15Meezan Bank65Wazir Ali16Bannu Woollen66Samin Textiles17JS Global Cap.67Bestway Cement18Rafhan Maize68Maple Leaf Cement19Habib Metro Bank69Pioneer Cement20Nestle Pakistan70Javedan Cement21Pakistan Elektron71Fazal Textile22Lucky Cement72Pak.PTA Ltd.23Pakistan Tobacco73ABN AMRO Bank24MCB Bank74NIB Bank25Bank AL-Habib75Bosicor Pakistan26Pakistan Petroleum76Saudi Pak Bank27Attock Petroleum77Pakistan Cement28Engro Chemical78Agriautos Industries29National Refinery79AL-Ghazi Tractors30ICI Pakistan80Allied Bank31Colgate Palmolive81Arif Habib Securities32Abbott (Lab)82Askari Bank33Habib Bank Ltd83Atlas Honda34Attock Cement84Kot Addu Power Company35Azgard Nine85Lakson Tobacco36Bank of Punjab86National Bank of Pakistan37Fauji Fertilizers Bin87Nishat Mills38Fauji Fertiliz88Oil and Gas Development39Faysal Bank89Orix Leasing40Ghani Glass90Pakistan International Airlines41GlaxoSmith91Packages Limited42Habib Modarba92Pak Oilfields43Habib Sugar93Pak Services44Hub Power94Pak Suzu ki45Ibrahim Fibres95Pakistan Intnl Container Ter.46Indus Motor96Soneri Bank47International Industries limited97Thal Limited48JS Investment98UniLever Pakistan49Kohinoor Energy99Unilever Foods50Cresent Commercial Bank100United Bank(Source Karachi Stock Exchange)HistoryThe index was launched in late 1991 with a base of 1,000 points. By 2001, it had grown to 1,770 points. By 2005, it had skyrocketed to 9,989 points. It then reached a peak of 12,285 in February 2007. KSE-100 index touched the highest ever benchmark of 14,814 points on December 26, 2007. The graph of last 10 years of KSE growth and index points is shown. The graph clearly shows the progress and continuous increment.Free Float Index In order to introduce a free float index that is representative of the market, the KSE- 30 Sensitive Index was implemented with effect from September 1, 2006. The need for a market representative free float index was long felt as the capitalization weighted KSE 100 Index strongly tilted to a fe w scripts. Free float is based on the proportion of shares readily available for trading to the total shares issued and excludes the locked in shares. The criterion for the selection of scripts on KSE-30 index was revised on 15 February 2007 in line with international best practices to include the impact cost as a measure to gauge the liquidity of scrip.This study is about testing the semi-strong form of Efficient Market Hypothesis (EMH) on the annual earnings announcement for the selected companies, listed on Karachi Stock Exchange (KSE) by using event study methodology (Fama et al. 1969 and Brown and Warner 1980, 1985). Following this chapter the study is divided into six more chapters, they are(1) Chapter two includes detailed Research aims and objectives, it also comprises of main problem and their sub problems hypotheses of the study are also being discussed in this chapter.(2) In the third chapter, Review of relevant theoretical and empirical research has been done. In this ch apter we have concluded that what has been done so far in this area of study both theoretically and empirically.(3) Fourth chapter covers Research methodology, data sources and method of sampling for the data. Methodology includes formulae and tests which are being used to test semi-strong form of efficient market hypothesis (EMH) on Karachi Stock Exchange (KSE).(4) Fifth chapter includes Research results and/or findings with supporting evidence.(5) Sixth chapter includes the research conclusions.(6) The seventh and the last chapter comprise of Recommendations made with the help of Research results and/or findings.Scope And Limitation Of The StudyThe material in this dissertation to the best of my knowledge do not contain any previously published or written documents by another person except where due acknowledgement is made in the research itself.If any errors found in the calculations made for this research that will be the sole responsibility of the writer.Statement Of Ethics And OriginalityDue to time constraint and non availability of the companys earnings announcement data from the Karachi stock exchange web site before 2004 the study is being carried out for just three years which includes 2005, 2006 and 2007.Moreover during the period of study which is year 2005, 2006 and 2007 there are few companies eliminated due to the non availability of the required data to carry out the calculations.Due to the limited availability of econometrics experts for guidance irrespective of the new sophisticated models for event studies, conventional models were used in this study despite the fact they have less predictive power than the other latest models.Aims, Objectives And Hypothesis Of The StudyThe following are the Aims Objectives of the studyTo check whether the Semi-Strong form of Efficient Market Hypothesis (EMH) is valid for Karachi Stock Exchange 100 100 Index (KSE 100 Index).To examine the stock market reaction (KSE) to Annual Earnings Announcements.Probl emsThe research is comprises with one main problem which is further divided into three sub problems each problem has its own hypothesis and to be solved separately.Main ProblemTest whether semi-strong form of efficiency exists on Karachi Stock Exchange (KSE) or not.Sub Problem OneWhether the annual earnings announcement affect complete on the day of announcement?We will calculate the normal return and the expected return and if it is close to zero we will say that the annual earnings announcement affect complete on the day of announcementSub Problem TwoShare holders could not earn extra return before, and after the announcement.We would first take the average of abnormal return and then cumulate the average abnormal return.In case where the AARs and the CAARs are closed to zero we will conclude our results that, investor or the share holder are not able to earn abnormal return by trading on event which is earnings announcement.Sub Problem ThreeThe Average Abnormal Returns (AARs) are random.We used Runs test to analyze the randomness in the behavior of Average Abnormal Returns (AARs). To check whether the average abnormal returns occur by chance or not, we carried out Runs test. In case where the observed numbers of runs are significantly different from the expected number of runs, we will conclude our finding as Average Abnormal Returns (AARs) do not occur randomly. Alternatively, if these results were not statistically significant, we say that Average Abnormal Returns (AARs) do occur randomly. We carried out runs test on Average Abnormal Returns (AARs) before and after the event day and also for the event window.HypothesisSince the study empirically examine the Karachi Stock Exchanges 100 Index reaction to Annual Earnings Announcement and the hypothesis being tested areHypothesis For Sub Problem OneHO Our null hypothesis for sub problem one is that the stock prices reactions in response to the annual earnings announcement complete on the announcement day in addition to that, abnormal returns cant be earn by the investors on stocks by trading on stocks after the announcement day.HO Rit = AR = 0H1 Rit = ARFor testing above hypothesis we compute the estimated return for the event window and then compare it to the actual return, the estimated return will be calculated by using following equationE (Rit) = i + i RmtUnder the null hypothesis if the estimated return of a stock is closed to zero we will accept the null hypothesis and if it is not than we will reject our hypothesis and bring to a close that announcement do affect on returns.Hypothesis For Sub Problem TwoHO Our null hypothesis for sub problem two is that returns are close to zero for average abnormal returns and their respective cumulative average abnormal returns for the selective securities in the studyHO AAR CAAR = 0H1 AAR CAARTo test the above hypothesis first we will calculate the average abnormal return (AAR) and then cumulative average abnormal return (CAAR) with the help of the following formulaeFor Average Abnormal Return ARitAAR it = i=1 .NWhere,i = the number of securities in the studyN = total number of securities.t = the days surrounding the event-dayFor Cumulative Average Abnormal ReturnKCAARt = AARit Where, t = -30,0, +30.t = -30If the average abnormal return and the cumulative average abnormal return are close to zero than we accept our null hypothesis otherwise we will reject it.2.2.3 Hypothesis for Sub Problem ThreeHO Our null hypothesis for sub problem three is that the difference between the no. of positive and negative average abnormal returns as not significant and they occur randomly.HO Z = 0H1 ZThe null hypothesis of the test is that the observed series is a random series. A run is defined by Gibbons (1985), asA succession of identical symbols which are followed or preceded by different symbols or no symbol at allThe run test is another approach to test and detect statistical dependencies (randomness). The number of runs is computed as a sequence of the price changes of the same sign (such as + +, , 0 0).When the expected number of run is significantly different from the observed number of runs, the test rejects the null hypothesis that the daily returns are random. The run test converts the total number of runs into a Z statistic. For large samples the Z statistics gives the probability of difference between the actual and expected number of runs. The Z value is greater than or equal to + 1.96, reject the null hypothesis at 5% level of significance (Sharma and Kennedy, 1977).Literature ReviewThere have been a lot of studies conducted on Efficient Market Hypothesis (EMH), a concept developed by Fama (1960) and divided capital market into three parts on the basis of its efficiency namely weak, semi-strong and strong form. For the event study, which is linked with semi strong form of market efficiency below first we discuss the theoretical foundations and after that, the empirical evidence.Theoretica l FoundationsThe origins of the Efficient Market Hypothesis (EMH) can be traced back to the work of two individuals, Eugene F. Fama (1960) and Paul A. Samuelson (1960). Remarkably, they independently developed the same basic concept of market efficiency from two rather different research agendas. These differences would drive them along two distinct trajectories leading to several other breakthroughs and milestones, all originating from their point of intersection, the Efficient Market Hypothesis (EMH). The EMH state that in an efficient market where many well-informed and intelligent investors operates, the stock price imitates all the existing information and no other information or analysis can be used to earn abnormal returns.The arguments of Fama (1965) form the theoretical foundation for the Efficient Market Hypothesis (EMH), which persuasively reasons that in an efficient and active market consisting of many well-informed investors, equity prices will appropriately reflect th e effects of information based on present and future expected events. The strong form of the hypothesis asserts that the current market prices fully reflect all private (insider) and public information. In other words, insiders shouldnt be able to earn excess returns from privileged asymmetric information. The strong form of the hypothesis represents an absolute standard, and in practice, market demonstrates only a certain degree of efficiency.Efficient Market Hypothesis (EMH) claims that speculative market prices fully and immediately reflect all available relevant information. Fama categorised information as publicly available information, information that eventually becomes public, insider information. Event studies are used in tests of Efficient Market Hypothesis (EMH) to ask whether prices incorporate information fully on the day that the information is revealed. If Efficient Market Hypothesis (EMH) holds, the information about the event should be incorporated into prices befor e or on the day of the event itself. There should be no impact on returns after the eventThere was little evidence on the central issues of corporate finance, now we are overwhelmed with results, mostly from event studies(Fama, 1991, p. 1600)Event study analyses are typically used for two different purposes firstly as a test of semi-strong form market efficiency and secondly as, assuming that the market efficiency hypothesis holds, as a tool for examining the impact of some event on the wealth of firms shareholders. Event studies measure security price changes in response to events. A single event study typically analyzes the average security price reaction to instances of the same type of event experienced by many firms. For example, the event could be the announcement of a merger. The event date can vary from one security to another in the same study, with dates measured in event time. Event studies have been used in a large variety of studies, including mergers and acquisitions, earnings announcements, debt or equity issues, corporate reorganizations, investment decisions and corporate social responsibility MacKinlay (1997), McWilliams Siegel (1997).Empirical EvidenceThe debate about efficient markets has resulted in hundreds and thousands of empirical studies attempting to determine whether specific markets are in fact efficient and if so to what degree. Many novice investors are surprised to learn that a tremendous amount of evidence supports the Efficient Market Hypothesis (EMH).Since the late 1960s, the enormous study in the finance and accounting literature has recognized evidence of relationship between accounting reports and market reactions. Fama (1970) described an efficient market as having prices that fully reflect all available information. Beaver (1981) offers a definition of market efficiency based on the information distribution when investors have mixed beliefs.Accounting reports probably are one of the sources of public information. Ball Brown (1968) examine the relationship between the accounting reports stock prices . Their results show that the market reacts to unexpected earnings as though the market participants had access to the good or bad news prior to the availability of this news to the market. They estimate that only 10 to15 percent of the market reaction takes place during the announcement month. Using another approach, similar results are also found in the work of Ball and Brown (1968) they examined price changes surrounding the announcement of a firms annual earnings and found that the stock market reacts quickly to annual earnings announcements. Ball (1992) and Bernard Thomas (1989) and (1990), documented significant delays in the adjustment of stock prices to quarterly earnings announcements.Developed countries of the world such as the USA, the UK, and Australia, etc. the amounts of researches on Efficient Market Hypothesis are extensive. Fama, Fisher, Jensen and Roll (1969) conducted the first stu dy on semi-strong form of Efficient Market Hypothesis (EMH). They examined the behaviour of abnormal returns at the announcements of stock splits and found that the market reaction is significant prior to the stock split announcement. Jordan (1973) assessed the behaviour of security prices surrounding the quarterly earnings announcements and found that stock market is efficient in the semi-strong form.In Asia until now some researches has been done. Kong, S. and Taghavi, M. (2006) study the Effect of Annual Earnings Anno

Does Media Ownership Need To Be Regulated Media Essay

Does Media Ownership Need To Be charm Media EssayIn this assignment am aiming to address three chief(prenominal) reasons the way how media self-command has to be modulate in digital age. The both aims argon willing focuses on the European join in foothold of media possession ruler such(prenominal)(prenominal) as to protect independence of normal and the fair regulation of media and media ownership to micturate in high quality, artless broadcasts and fin tout ensembley, a concern to the populace is the protection of privacy.Our lives, our everyday choices, our aspirations (goals) our continually changing values, be constantly shaped by the media in all its forms. For the last 40 to 50 years, we father seen TV dominate, and here in the UK, we have bypast from a virtual monopoly to a situation where we have access to absolute amount of TV channels.In the UK, and most countries, the introduction of regulation of media and media ownership has been a requirement which is unavoidable. In a free order of magnitude, cardinal major aim is to ensure that each media format, radio, TV, parvenue-fashioneds cover, have lots of players inside the marketplace place. A particular media market with lots of players, and non just one or two major players is said to be plural or in a res publica of pack. G everywherenments in free societies aim to ensure that regulation of media ownership ensures this multitude. Some g overnments have such stringent laws which conceive that media owners find it hard to operate in a free way, so companies are limited in legal injury of expansion and growing in a natural way. Governments have to take into consideration that rules of media ownership do not hold keister companies in this way, and hence regulation must(prenominal) aim to balance between plurality, and allowing companies to deliver their media without too many laws that vague down free look ating, creativity and quality.Current media regulation within the UK develop from regulation originally aimed at impressed form. Earliest regulation was inadequate and let in newsprints notwithstanding adhering to certain laws and not infringing those laws, such as libel etc. Recently the newspaper industry as its own regulation-of-conduct, and is said to be self-regulated. Some would view self-regulation as except in the lodge ins of media owners, and not unavoidably in the interests of the public and private lives of individuals within the public.Media is going done such a rate of change, its been described as a media revolution, or digital revolution and were said to be in the information age. Change is so fast, and continuing that regulation is under strain to keep up with these new formats. For instance, as Doyle (2002150) describe in her book broad-band Internet technologies bring about the possibility of not only conventional TV, but in any case synergetic TV, sitting alongside your home computer network. Increasing number s of devices are now able to stream media into the home through these broadband providers, such as cable or DSL technologies. This change is world- coarse, affecting all countries to some(prenominal) degree, even the poorest third world countries have access in places to these technologies, even if its a little slower on the update than elsewhere. When assorted media types are able to utilise the same medium of transmission (The Internet), we realize this sharing of the medium as overlap. Converged Media is both great, but is a worry for regulators work-wide.As new forms of media developed over time, such as radio, TV, and to a greater extent recently the Internet, regulation has had to develop with it. Currently regulation of these new forms of media in the UK is carried out by a body called Ofcom. In Ofcoms own address-Ofcom is the communications regulator. We regulate TV and radio, fixed line telecoms and mobiles, plus the airwaves over which wireless devices operate.All for ms of media allow us as a society to challenge the status quo, challenging the government to do better for its citizens, and defend against corruption. Laws allow governments to ban the printed media easily, but its not so easy to censor newer forms of media such as the Internet.Throughout the world, its been easy to regulate traditional forms of media which include those mentioned, TV, radio, magazines, newspapers books, but governments are faced with the difficulty in regulation new media which is now international, websites, Internet radio. How kitty one country regulate media ownership in other countries, be relieve oneself the Internet enables anyone to get media created in other nations? Whilst ensuring plurality has been focused on printed media, to ensure citizens get a wide miscellanea of views from media, the nature of the Internet itself is plural, in my view, to a greater extent emphasis in future tense has to be put on regulating media ownership on a global scale , but this is a controversial view. Recently we have seen countries such as China put blanket bans on their citizens viewing a great(p) number of sites on the Internet. These are draconian measures, but shows what lengths some countries may go to enforce their own forms of censorship.The European Union has a repointive which is a country of origin rule for the provision of on-line(a) services (information society services). This guiding ensures that regulation of the Internet is enforced at the country of origin, and not the country that the public may view the content. This has open-and-shut difficulties, because only certain internationally agreed laws such as kidskin porn are enforced globally. The problem arises when one country has contrastive social values and social practices to another(prenominal). For instance one country can have very open views on adult pornography to anothers, and their laws will be vastly distinct in this respect.The EUs country of origin direct prevents the country of destination from applying its own laws to the media providers country of origins media owner. Domestic regulators cannot apply their rules to another member states media owner (incoming services). On the other hand regulators must also apply their own rules to domestic media owners who supply media to citizens of another member state (outgoing services).It follows that if regulations brought in to ensure media ownership is plural, and then the outputs of the media should likewise also be plural by their very nature. As an example, we can use send TV If a country allows both domestic and international TV broadcasts to be received by its citizens, then this ensures that thither are polar views, beliefs and cultural values outputted hence by nature this medium is plural. Stricter governments and regimes look upon that tight contains on media ownership mover strict and tighter media output.Going back to printed medias in the UK such as newspapers, laws or a cts of parliament, are used for learn of media ownership. The government used the Fair Trading Act 1973 to regulate how ownership and takeovers are conducted. In addition the Broadcasting Act 1996 was used to regulate cross-media ownership, and prevent the dominance of one company across the spectrum of media. The government has to be involved with ensuring diversity in output, through the control of ownership. I think that its important ensure competition within the market using laws that control ownership in this way, ensuring regulation for plurality can be achieved through control of ownership.A worst case scenario if whereby one company, say Rupert Murdochs newspaper industry gets so strong that it is able to turn say news into a monopoly this would mean that Murdoch would be able to control who gets voted into government, what we by, wed only tend to go for certain brands. A monopoly would mean that the public interest was not being served, and wed continually be misinformed in the interests of only that company. In history we have seen where the control of all media forms can cause bloodshed on a wide scale, recently in Rwanda, Bosnia, and farther back in the Second World War. In order to forego this happening again, its important to ensure that media provides a balanced, view, and regulation though wrinkle law through acts of parliament will ensure this is prevented.The European Unions E-Commerce directive seems to ensure that on the European scale, the regulation of media ownership ensures a wide variety of media types and additional internationally agreed laws on privacy, data protection, and barbarian pornography for instance can be utilised to protect citizens where topical anaesthetic laws are not adequate in this respect.The European Court of compassionate Rights (ECHR) has also implemented laws on media ownership, such Article Eight liberty of Expression. The complexity of broadcasting laws throughout the world can be seen within the EU, as the EU continues to find new ways of ensuring that cross-border media outlets are regulated in a way that participating countrys all play a part in allowing independence within a set of guidelines that even stays within the public interest. These laws for cross-border media types such as the Internet and broadcast TV do not pertain so much to sometime(a) media types like newspapers and laws on media ownership is left to individual member states to take care of.Its not all plain sailing within Europe, because on that point has been stiff opposition to laws that hinder Freedom of Speech and Freedom of the press. The European Union has come up with an EC directive known as Television without Frontiers, which takes the result of the Convention on Trans-frontier Television into current European Law on media ownership.So we have seen that the two aims of the European Union in terms of media ownership regulation areTo protect freedom of expressionThe fair regulation of media and me dia ownership to ensure high quality, unbiased broadcasts.The third aim, which recently has come more of a concern to the public is the protection of privacy. People should have some degree of privacy in their lives, and domestically newspapers have been allowed to invade someones privacy on the basis that its in the public interest. Different member states within the EU have different views of what is in the public interest, and where we have new forms of media that have no borders, then how do we tackle news based on peoples private lives, and where do you draw the line on what should be an invasion of privacy and what is in the public interest if different member countries greatly differ on that. The European Union has tended to shy away from this issue, and concentrate more on enforcing laws on media owners concerned with intellectual property rights, and copyrights, with slightly bit more emphasis on privacy only recently.The European Union salute with the television directive has looked more on media content in terms of violence, pornography racial hatred and the right to reply. These paws prevent broadcasters from going over the top in what they broadcast, whilst ensuring that ownership remains broad and international ensuring that freedom of expression is OK in all member states. The EU is not so concerned with individual media moduls like Murdoch taking control of large swathes of the media, and this controlling public opinion without variation, but is more concerned with plurality and diversity of media. In my opinion, this is right, and a balanced view form a wide variety of media owners can be achieved this was right across the European Union though this type of regulation. Rasiah Newell stateRelaxation of ownership regulation might shift attention to content controls. Again, multiplicity of outlets and communications convergence provide arguments against such controls. Scarcity and impact might have justify special statutory controls over broadc asting until now, but such reasons have no relevance to the future information and communications industry. The print media would never accept such statutory interference with freedom of expression. It is vehemently contrasted to licensing or pre-vetting and could not accept due impartiality requirements its current self-regulatory code expressly preserves its freedom to be partisan. In the multi-media world there is little danger of information monopoly. Rasiah Newell attempt to describe here how the print media have prevented the government here in the UK from attempting to enforce laws that restrict or interfere with their freedom of expression it would mean death for any UK government that went up against the print industry. However, by relaxing regulation of ownership means that content is more of an issue, and we have seen that on the European level.I am unsure that a self-regulating press can be solely in the pubic interest, and would like to see more of an effort on the European level to tackle issues such as privacy and what is in the interest of the public on a European level, as the UK papers seem to get away with murder sometimes.

Motivation For Language Learning Among Libyan Students English Language Essay

Motivation For Language Learning Among Libyan Students face Language EssayThe penury to check come to the fore a discoverside(prenominal) or second expression is a subject of nigh considerable affair nowadays. This has non al appearances been the vitrine. In 1956, Wally and Lambert recalld that keying a nonher spoken communication convoluted verbal ability and intelligence but notions like necessity, attitudes and dread were not considered to be of signifi coffin nailce. Opinions render since changed and one might occasionally attain in mind that affective variables atomic number 18 the except trances worthy of consideration. Learning a unconnected linguistic plow skunk be a difficult and lengthy cultivate and I would not be at all surprised to lift up that several(prenominal) variables, so far not considered pregnant, were found to be of greatness in second- wording breeding. Hitherto, question has concentrated on individual difference features of the schoolchild such as, spoken communication anxiety, attitudes and motive, self-confidence, personality variables (e.g. risk-taking, inclination to succeed, empathy and so on), intelligence, field independence, speech study strategies, and lecture aptitude. However, in that respect argon other variables and other classes of variables that could be considered. This essay exit focus on pauperism, as I believe that mevery of these other variables be reliant on motivation for their personal effects to be realized. For example, verbiage- chance upon strategies argon unlikely to be used if the learner is not motivated to learn the second language and a learner pull up stakes be disinclined to take risks using the second language if he / she has little intention of learning it. Therefore, motivation is crucial, in the same way that language aptitude is, in determining the success or differently of learning a outside(prenominal) language in a classroom setting. Ellis (1985) states that motivated individuals who integrate two linguistic and non-linguistic outcomes of the learning make love will accomplish desirable attitudes and a higher score of second-language proficiency.Recent eld take seen an increase in the number of Libyan students coming to the UK to weigh for grad student degrees. A major issue for intimately of these students is their poor assertion of position, two verbal and written. This naturally has a detrimental impact on their ability to integrate into life in England, twain on and attain campus. An examination of their motivation to learn side may highlight the linguistic challenges they face in England and the summons of their adaptation to both their degree content and the new society and culture. Therefore, this essay will first undertake a literature review to look at research carried out into motivation for second-language acquisition. It will then describe and examine adult Libyan students instrumental and consolidative motivation in learning side of meat as a second language. Secondly, it will introduce a short semi-structured call into question with postgraduate Libyan students who have not long been in the UK. The purpose of the interview is to establish whether their death orientation is mainly instrumental or integrated. approximately conclusions will be made in advance some implications for classroom statement are drawn.Literature ReviewAccording to Dornyei (2009), it is necessary to know what motivation is so as to lift the motivational intensity of students. He defines motivation as a cluster of factors that energize the behaviour and give it direction. Alkinson (2000 123) defines motivation as the drift that learners put into learning a second language as a result of their motifs or desire to learn it.According to Gardner and Lambert (1972), there are two types of motivation compositional motivation and instrumental motivation. Gardner and Lambert (1972) state that endogenetic motivation occurs when learners are interested in learning roughly the second languages culture and want to communicate with speakers of that language and become integrated into that culture a to a greater extent interpersonal flavour of learning. On the other hand, Gardner (1996) states that instrumental motivation confer withs to those students who learn a second language in regulate to gain some kind of advantage be it economic (better paid job) or friendly (better status). They are thus more applicative and self-oriented. Lamp (2004) huskings that most Libyan students who larn slope as a second language are instrumentally sooner than integratedly orientated.Dornyei Ushioda (2009 53) believe that integrative orientation is an essential source of motivation because it is ground firmly in learners personalities. As such it is likely to exert its influence over an extended period and to sustain learning efforts over the m which is necessary to come u pon language learning success. Also, Skehan (1989) suggests that existence integratively oriented reads to greater motivation, which in turn athletic supporters to sustain the learner throughout the long process of mastering a second language, discriminateicularly when that learner only starts learning the new language in high school. slavish motivation on the other hand is little effective because it is not rooted in the learners personality. It is therefore more susceptible to negative external influences and the learner is less likely to put in the effort required to attain additive progress.According to Lamb (2004), over the last few years, motivation has except been re designualised. He argues that integrative motivation is becoming increasingly un serious in a sphericizing world in which incline is the medium of communication minglight-emitting diode with speakers of many languages, from many cultures, for many purposes. The desire to integrate with the first langua ge community hardly makes sense anymore. Therefore, the debate about the integrative model has intensified and has taken a new turn. Dornyei Ushioda (2009), ask whether we can follow through the concept of integrative orientation when there is no specific drive fibre group of speaker. In other words, does it makes sense to talk about integrative attitudes when averership of position does not necessarily rest with a specific community of speaker, whether American position or British incline? Moreover, does the notion of integrative motivation of learning face have any real meaning, given the increasing curricular reframing of side of meat as a universal basic skill to be taught from primary take aim on base literacy and numeracy, and given the predicted decline in numbers of face as a foreign language learners by the end of this decade? These questions have led some second-language motivation researchers to re remember the concept of integrative motivation. Yashima (20 02 57), for example, expands the notion of integrativeness to refer to a generalised inter matter outlook or international posture, which she defines with reference to Japanese learners of side who have an interest in foreign or international affairs, willingness to go overseas to stay or tap, readiness to move with intercultural patterns, and openness or a non-ethnocentric attitude toward different culture.Dornyei Ushioda (2009) expand this concept of international posture such that the external reference group moves from being a specific geographic and enthnolinguistic community to being a non-specific global community of English language users. Ushioda (2006) questions whether it is meaningful to conceptualise these points, i.e. is it meaningful to conceptualise the global community as an external reference group or as part of ones inner representation of oneself as a defacto portion of that global community?This theoretical shift of focus to the internal ground of self and identicalness by researchers such as those mentioned above makes this a radical rethink of the original integrative concept.Dornyei and Csizer (2002) speculate that the process of appellative theorised to underpin integrativeness might be better explained as an internal process of identification within the persons self-concept, rather than identification with an external reference group. Dornyei (2005 175) real this idea further by drawing on the psychological theory of possible selves. According to this theory, possible selves represent individuals ideas of what what they might become, what they would like to become, and what they shitless of becoming, and so provide a conceptual link between the self concept and motivation. Dornyei (2005) also builds on this theory of possible selves to develop a new conceptualisation of second- language motivation, the second language motivational self-system. Its primaeval concept is the idea of self, which refers to the representation of the attributes that someone would ideally like to have got (i.e. a representation of personal hopes, aspirations or desires).In relation to second-language motivation, Breen (2001) argues that second-language aquisition theorists have not developed a comprehensive theory of identity that integrates the language learners and the language-learning context. Breen (2001) uses the term identity to describe how a person understands his/her family to the world, how that relationship is constructed across time and space, and how the person understands possibilities for the future. Breen (2001 45) developed the motivational concept of investing to capture the socially and historically constructed relationship of the learner to the tar thwart language, and their often ambivalent desire to learn and practise it. When learners are interested in a language, they do so with the instinct that they will acquire a wider range of symbolic and material resources, which will enhance their cultur e capital, their identity and their desires for the future. Therefore, an investment in the betoken language is an investment in the learners own identity.Arnold (2002) designd that in addition to the current research and theories, there is a need to draw on a wider variety of theoretical viewpoints in order to further our understanding of motivation in second-language learning. Of these, the more important ones that are relevant to this essay include the cognitive perspective of learner last orientation, the theory of finale-setting and attributional theory, all of which will now be briefly discussed.Firstly, fit to Pintrich (1989), the cognitive perspective differentiates two major learner inclination orientations inalienable and extrinsic. Students demonstrate an extrinsic orientation if their reasons for engaging in a lying-in are to acquire grades, rewards, or approval from others.Conversely, Arnold (2000) maintains that if the rationale for students engaging in a task is curiosity, challenge, mastery, or learning, then they are considered to be per se oriented. Arnold (2000) also adds that there is much point in second-language acquisition literature to support the claim that intrinsic motivation is strongly connected to the outcomes of second-language learning. Harmer (2007) suggests, til now where the original reason for taking up a language course, for example, is extrinsic, the take on of success will be greatly enhanced if the students come to hump the learning process.According to Philips (2005) most Libyan students are extrinsically oriented. For example, all Libyan schools place a strong emphasis on tests, grades and competitiveness, all of which only serve to promote Libyan students extrinsic motivation. The students are only learning the second language to impress their parents and teachers rather than learning it because they love to do so.As a result, adult students who come to study in the UK have been extrinsically motivated t o simply do enough to pass exams and get a well-paid job after graduating.Secondly, according to Locke Latham (1994 55) the theory of goal setting is ground on the principle that much human action is purposeful, because it is directed by conscious goals. This theory explains why some deal carry out tasks better than others those who are goal oriented perform better and achieve more. Garden (1985) states that there are two important aspects of goals goal mechanisms and goal attributes. Content and intensity are the most widely studied goal attributes. However, goal specificity and goal difficulty are aspects of content which are most researched. Dornyei (2005) states that commitment is the most greennessly studied feature of intensity and this is the degree to which a person is attracted to the goal, considers it significant, is determined to achieve it, and sticks with it in the face of difficulties.Locke and Latham (1996 40) propose three direct mechanisms by which goals regula te performance Firstly, goals direct occupation toward actions which are goal appropriate at the expense of actions that are inappropriate. Secondly, goals decline expenditure in that individuals regulate their effort according to the complexity level of the goal or task. Thirdly, goals influence the perseverance of action in situations where there are no time limits.Finally, Dornyei Ushioda (2009) define the attributional theory of motivation. This portrays human beings as scientists who are motivated to achieve a causal understanding of the world. These strivings for a causal explanation are supposed to have behavioural implications. In an achievement-related context, the chief sets of causes considered responsible for failure and success are effort, ability, luck and task characteristics. Weiner (1992) states that these are analysed along two dimensions stability and lack of control. The stability dimension contrasts ability and task difficulty, both of which are thought to b e unchangeable, with effort and luck possibly changing on subsequent attempts to carry out a task. The lack of control aspect contrasts ability and effort (both internal factors) with task difficulty and luck (both external factors). In principle, individuals might attribute causes to any one of these 4 factors. Dont know if this is what you mean also not sure if its very clear, especially the bit about dimensions and the following bitstock of sentencesMotivation for Language Learning among Adult Libyan students in the UK Instrumental or Integrative?It has been established that individuals learn a second language in two main ways they are either instrumentally or integratively motivated. Among Libyan students, it would appear that instrumental motivation is more evident than integrative motivation and that teaching and learning for exams have dominated foreign language teaching in Libya. According to Philips (2005), in Libyan education, English is compulsory. The majority of Lib yan language learners do not choose to learn English consequently, many lack the internal drive for learning English and they have to depend on external driving forces. Philips (2005) adds that because English is compulsory, students see it as a means of improving their social standing. Moreover, the Libyan large number think that almost everything can be attained through hard work, even off if they take no personal interest in it. So, it is not odd that Libyan EFL students learn English to qualify for graduate and postgraduate education, to lay down themselves for the best future employment possible and to pass exams all of which are external factors and which align with several collective social expectations.Johnson Krug (1980) believe integrative motivation to be more prevalent than instrumental motivation in the learning process, since without external influencing factors, the student becomes unmotivated to learn. This however is not the case in cross-cultural situations. J ohnson Krug (1980) find that external driving forces, particularly those nurtured and back up by the exam system and curriculum in formal education, stick around to motivate the Libyan EFL student.Many studies have looked at motivation in a Libyan context, and found that instrumental orientation is very common among Libyan EFL students. Kara (1992) maintains that 99% of Libyan students of English are only learning English for reasons of certificate motivation. Philips (2005) argues that most Libyan individuals learn English for useful and patriotic reasons, for personal advancement as well as for national modernization and material gains. Libyan students are motivated to learn English because they believe that they will be financially better off in the future.InterviewThe aim of this short and semi-structured interview is to prove what has been shown through the research discussed above namely that adult Libyan students who come to study in the UK exhibit signs of instrumental o rientation rather than integrative orientation when it comes to their English learning experiences. This researcher will examine the motivation behind second-language acquisition in an informal setting and will interview postgraduate Libyan students who are undertaking MA and PhD studies in the UK.Research QuestionsSeveral questions were considered important for the purposes of this research. These were as followsWhat has motivated Libyan students in the UK to learn English?Do you think it is important to learn English, and why?What was your reason for learning English in the UK?What are your attitudes towards British commonwealth?And finally what work youll be doing in your hoidenish after graduating in the UK?Participants and Data Collection Procedures cardinal postgraduate Libyan students who are studying for degrees in the UK participated in this study. For both students, this was their first time in the UK and their first time in an English speaking country. twain respondent s were found through my own social cyberspace and were friends of a friend. See further details in Table (1) below. somaGenderAgeCurrent subjectDuration of study in the UKMohammedMale26MA MedicinesThree yearsLailaFemale29PhD TESOLFour yearsTable 1Data were collected from both students separately and at different times. Both students had already been in the UK for 18 months. Each interview in any casek approximately 30 minutes. Both students gave permission for their answers to be taped during the interviews.DiscussionBoth respondents believe that English is of great greatness to their academic education in the UK. Both had come to study at a postgraduate level in the UK in order to reform their career prospects and benefit financially upon graduating. As discussed before, these reasons show a intelligible instrumental orientation in their motivation for learning English.Both respondents matte up a current and urgent need to further improve their four skills reading, listening , speaking and physical composition of English despite their achievements in learning English in Libya before they came to the UK. Their experience of learning English in Libya involved particular training programs and / or formal instruction. This meant that they excelled at passing English exams rather than being able to converse in a practical way with English-speaking people. Having recognised that they might have some problems when they got to the UK, both respondents spent a year improving their knowledge of English before applying for their postgraduate courses. They also did this to assist them in their actual postgraduate work as both felt that they needed additional language skills in order to have it away with their studies. Mohammed said unwritten skills are important to me because they swear out me to communicate with people from different parts of the world and also suffice me in my academic degree. With ripe(p) oral skills I can cope more easily with academic a ctivities such as communication or discussions with my supervisor, understanding seminars and talking to other students about their studies. Laila however, said (English) reading and writing skills are particularly significant when it comes to writing my thesis.It was obvious that both respondents tended to be more preoccupied with an instrumental orientation. Kara (1992) found that Libyas motivation for learning English is very job-oriented and certainly very pragmatic. Libyans learn English because learning English provides them with a sense of achievement and encourages them secure better-paid jobs. For Mohammed, the practical aspects of the English language seemed to far outweigh the integrative dimension. He said Ill need English for my future career because I desire to work in the UK after graduating. My area of study is popular with the medical field in many countries, particularly in the UK. Working in the UK will be more lucrative for me than working in Libya. However, he added that if I were to find a job as a doctor and live in the UK, maybe I will have intrinsic goal orientations when it comes to learning English then because then I will want to be able to communicate with English people and have a deeper understanding of their community and culture so that I can integrate and ordinate to the society.The second interviewee, Laila said Studying English is essential to me since without it, an individual cannot be successful in any respected field, and also for me, studying English can be significant because if I am skilled in English, others will respect me more. In addition, she said, In my country Libya, people who get a good degree in an English speaking country find it easier to find a well-paid job because my country lacks qualified English teachers in higher education. She also added I am interested in using the Internet as a communication tool to help me learn about people from different countries. It is also useful for decision information and learning materials in English.Both respondents had negative attitudes towards British people that they had met. They felt that British people were arrogant, impatient and prejudiced. This could be considered further evidence of instrumental orientation. According to Dornyei Ushioda (2009), negative attitudes towards the target language community, may lead to a lack of interest in interacting with the people of the target language. Mohammed had experience of being treated rudely and impatiently by an English person when he had asked for directions. Having had this experience, he was less willing to interact with English people in case it happened again.Laila said my English landlord treated me less favorably in the allocation of rooms than English tenants who shared the same house. This is a sad example of a negative experience as a result of Lailas aspiration towards integrative motivation. Laila felt that her landlord was prejudiced against individuals from developing countri es. She too has had negative experiences when trying to interact with ordinary British people in the street. Laila asked a woman for some directions to the coach station and this woman not only ignored the question but also walked quickly away. As a result, Laila has felt frustrated by some British people who she found to be very arrogant and would have preferred to avoid.Both respondents, despite their negative attitudes toward English people, felt that they were more successful in learning English in the UK than at home. Johnson Krug (1980) suggest that people who rated foreign people negatively were more successful than those who rated them positively and that the expression of negative feeling towards them only spurred them on to overcome and manipulate the people of the target language.Finally, both respondents were able to agree that their motivational goals with regard to learning English were instrumental. Both said that they hoped to get better-paid jobs after graduating a nd English skills were part of this boilersuit plan.In summary, the interview process has shown that both Libyans were highly motivated to learn English and that they had a higher degree of instrumental motivation than integrative motivation.According to Pintrich (1989) and from his cognitive perspective, the data would indicate that both respondents exhibited extrinsic goal orientations. Both believed that learning English would assist them in their postgraduate studies, enhance their career prospects, improve their English interactions and communications and assist them in integrating into British communities. In other words, learning English was seen to improve their quality of life in the UK.ConclusionMotivation is one of the most significant factors influencing learners second-language proficiency and achievement. Libyan students show signs of being instrumentally motivated rather than integratively motivated. In order to illustrate this, an interview was set up to investigate motivation to learn English among Libyan postgraduate students. Data gathered during the interviews support the theory that they had been motivated to learn out of the belief in the instrumental or extrinsic value of English, primarily for their studies and future career prospects. some research showed that current English teaching methods in Libya are targeted towards achieving good grades rather than promoting proficiency. Whilst many Libyan students do well in the English exams in Libya, their ability to use English in an English-speaking surroundings on a day-to-day basis remains limited. It has been shown that instrumentally motivated EFL students in Libya learn English to increase their employment prospects, increase their salary expectations and for social advancement. Instrumental motivation is maintained through the exam system and its accompanying teaching environment.Classroom implicationsAccording to Dornyei and Csizer (2001), teachers play an important role in maxim izing students motivation to learn a second language in the classroom. To this end, there are some teaching and learning strategies, which could be sedulous in the English-learning classroom.Firstly, Dornyei and Csizer (2001) suggest that teachers should dispense with the traditional teacher-centered teaching methods and instead move on students to use their initiative. English could be introduced using multi-media examples such as music, film, TV and literature. Once their interest is induced, students will be motivated to take part in classroom activities and so attain the goal of language learning. Teachers need to take on many roles cooperator, organizer, informant, initiator, guide, participant and advisor. A learner-centered class is a successful class with learners playing the dominant role. Learner-centered dynamic classrooms can help learners to make progress and encourage them to practise the second language.Secondly, Dornyei (2001) states that teachers should create a r elaxed atmosphere in the classroom because a tense atmosphere can cause anxiety amongst learners and this hinders their motivation and effectiveness in a foreign language. Additionally, teachers should choose teaching materials that are appropriate for the learners and that create a desire for learning. Authentic and interesting teaching materials enable learners to improve their verbal and oral communication skills in real-life situations.Thirdly, Dornyei (2001) adds that teachers should increase self-confidence among students of English through boost rather than scolding or criticising.Finally, Dornyei and Csizer (1998) assert that a teacher can increase students natural curiosity towards the English community and its culture by discussing things like geography, history, lifestyle, political matters, day-to-day living and using written, audio and visual information. Drawing upon the experience of students who have visited English-speaking countries is also a apposite way to intr oduce interesting information. Teachers should help students to realize that they are not just learning English to pass exams. Students should look upon the exercise as a means of learning about other cultures, people and societies. Teachers of English should cultivate positive attitudes among their students towards English speaking people and cultures, thereby promoting integrative motivation for learning English.Check the spellings of the researchers names you quote there were several inconsistencies which Ive corrected (after checking in google) but you might like to check that they are indeed spelled correctly.

Oligopoly Structure Of Markets Beneficial To The Consumer

Oligopoly Structure Of Markets adept To The Consumer(Tutor2U, 2007)An oligopoly market is a market structure which sh atomic number 18s a large pct of the market by a fewer firms. It results in a amply degree of market concentration. An important characteristic of an oligopoly is interdependence between firms. beingness interdependence way that each firm must be protective(predicate) of the likely reaction of opposite firms in the market when making set and investment decision (Tutor2U, 2007). In addition, oligopoly market is barriers to entry and non bell competition. It means by plus market sh ar without changing expense, which batch pretend the form of ingratiatory publicize, quality of service, devotion schemes, free gift and forwarding (The student room, 2005). According to the characteristic of oligopoly above, this is shown in the UK supermarket industry, as the diagram shown (Tutor2U, 2007) there are three main supermarkets which are Tesco, Sainsburys and A sda. The main supermarkets are right away having more than three quarters which is 72% of the grocery market. For the purpose of this essay, it go out be a discussion about the market structure of the UK supermarket whether it provides rough signifi understructuret avails for consumers.There are only few supermarkets with similar products in oligopoly market. Because most food manufacture perish supply to the entire supermarket, such as Kelloggs and Heinz (Just food 2010). The supermarket produces its own generic or own-label goods for some products. They suck up produced their own-label product ranges from food to some basic cares. For example, Tesco planed to extend its Finest to include a range of homecare. Own-label sales generate 38% of Sainsburys total revenue, with its Taste The dissimilitude premium range estimated to contribute between 200m and 300m. However, many of these generic products are made at the same factory, and are simply labelled oppositewise for the disparate stores, so this is a false differentiation of products. This means that either of the products available for sale in the different supermarkets are the same, which is one of the causes of an oligopoly (Tutor2U, 2007). Therefore, consumers do not pay any choices because there are only few huge supermarkets in the market, which are selling the same product with different package. It is a negative side for consumers.In addition, the firms charge the same outlay in an oligopoly (PEOI, 2000). However, the UK supermarket suppliers gull the same products are supplied to the firms. Therefore, the apostrophize of altogether the supermarkets leave behind be the same as each other. For example, the Cravendale Fresh Filtered Semi skim Milk was priced as 1.05 in Sainsburys. However, Asda sold it as 86p (Mysupermarket Insights, 2000). All in all, this theory of oligopoly of supermarket structure groundwork provide some benefits to consumers as they can have a more worthful price by canvass different price of the main supermarkets. However, the products which sole in the supermarkets are all very similar price.Firms compete on price in an oligopoly market. Therefore, they can become a price maker and making higher profit. This feature can result in the price wars where one supermarket has price be intimates in its goods and other firm will follow this situation (Wisegeek, 2003). For instance, Morrisons has fallen to 57p/kg and 59p/kg of bananas. After Morrisons promotion, Tesco has excessively made some price compresss, worth(predicate) 1.2bn. Lastly, Asde sells two million kilograms of bananas a week by charging 46p/kg, which is the lowest price in 14 years (Mailonline, 2000).The price competition can be shown in the Kinked Demand Curve (Economics help, 2003). If the price raise from(Economics help, 2003)P1 to P, then firms will lose a large share of the market because they become uncompetitive. If firms cut the price down, firms can gain a large r market share. However, other firms will cut price too. Therefore demand is inelastic for a price cut.In a price war, Tesco had a price cut which was between 3% and 25% brush off promotion. This could result in increasing 12% market share in eight weeks. Therefore, consumers can cost less by having this price competition as there are many different promotion and price war which should provide benefit to consumers.Moreover, supermarkets need to compete other ways besides price. It means supermarkets should increase market share without changing prices. This can be shown in persuasive advertising, quality of service, loyalty schemes, free gifts, packaging and temporary price reductions, which are required to attract consumers (The student room, 2005). Therefore, these factors are aimed to bind consumers to particular supermarkets for reasons other than price. Firstly, according to research data from Nielsen media Research, Sainsburys spent some 9.97m compared to Tesco which spent 7, 3m. However, with Asda outgo some 4.23m, the two giants of the UK supermarkets still highly cost in advertising (CBI Interactive Inc, 2000). The more advertising is shown to consumers, the more possibility to attract and give information to the consumers. Secondly, research by Baruch Colleges business school in the US has found that, western consumers are more prefer to gifts that reword loyalty and patronage than pure luck or blanket rewards. So, consumers may purport happy to spend money by getting discount. Also, the bigger the discount of the loyalty card, the better attractive of consumers. Consequently, as there are also some other factors that can influence consumers in an oligopoly market. It means consumers can gain different benefits from this non-price competition between firms.Consequently, although consumers do not have many choices as there are only few big supermarkets, and prices are identical in some ways, consumers still can have benefit which is provided by olig opoly market. As consumers can have lower price product by the price competition. In addition, the interdependent firms compete in other ways, for example, discounting, advertising, and quality of service, which are give consumers a more valuable consideration. In this case, the oligopoly market structure creates a situation that is beneficial to the consumers.