Shariah compliance status and value of analysts’ recommendation revisions: evidence from Malaysia

“We find that analysts’ recommendation revisions that are not directly related to earnings announcements lead to stronger price reactions. This finding implies that analysts’ private research embodies more valuable information than earnings announcements. Therefore, asset management firms in Malaysia have a profit opportunity if they set up an equity research department employing qualified researchers and release their equity reports to influence investors rather than following passive investment strategies…”

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