Open AccessInternational Real Estate Review
Author(s) -
Klaus S. Beckmann,
AUTHOR_ID,
Changha Jin,
AUTHOR_ID
Publication year - 2013
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100167
Subject(s) - real estate investment trust , diversification (marketing strategy) , real estate , financial economics , economics , stock market , abnormal return , business , stock (firearms) , information asymmetry , monetary economics , finance , stock exchange , geography , context (archaeology) , archaeology , marketing
We have analyzed the market reaction to REIT preferred stock ratings announced by Moody's Investors Service from 1999 to 2009 that are related to four types of rating events; first time ratings, outlook changes, reviews and actual rating changes. The results suggest a significant market reaction to rating upgrades of 1.08% abnormal return, and downgrades and negative outlooks of -2.28% and -2.67% abnormal returns, respectively. Compared to the non-REIT literature, the abnormal returns are smaller in magnitude which implies a relatively smaller information asymmetry within the REIT market with diversification opportunities for global investors.