Impact of ceo assignment announcements on stock returns in case of BIST companies

There are several internal and external factors affect stock returns. To make a correct investment decision investors evaluate all of the factors, news and announcements that affect stock returns. Specific variables of the companies are among these factors. And this issue is intensively investigated in the literature. Company's CEO deeply affect for their company's performance and success. For this reason, top managers' resignation announcements are widely considered by investors. The purpose of this study is to analyze the impact of the CEO changing announcements on the stock returns of the companies whose stocks are traded in BIST (Borsa Istanbul). For data analysis event study is used. Event study is a method that measures the response of stock returns to specific announcements of companies. The samples consist of 107 CEO' changing announcements by 80 companies over the 2011-2016 periods. Each company's announcement day is used as event day and +5/-5 trading days are used as event window. Abnormal returns and t-statistics are calculated for each day during the event window. The findings suggest that the company's stocks react significantly to top managers' resignation. Results also show that Borsa Istanbul is not efficient at a semi-strong form. Key Words: CEO changing announcement, event study, efficient market hypothesis