Peter Masha, Marno Booyens
Abstract
The research investigates the effect of dividend announcements on the share prices of companies listed on the Johannesburg Stock Exchange (JSE) within the software and computer services sector. Employing an event study methodology, the research examines the presence of abnormal returns surrounding dividend announcement dates. A quantitative approach was adopted, with a sample of 75 dividend announcements selected based on defined criteria. Share price movements were analysed using converted daily data points to calculate abnormal returns.The findings indicate that while the aggregated abnormal returns on the announcement date were positive, they were not statistically significant. Some inconsistencies were also observed and are discussed in the analysis. The study contributes to the broader discourse on market efficiency and investor behaviour in emerging markets, highlighting the limited impact of dividend announcements on short-term share price movements in the South African technology sector. The results provide practical implications for investors, corporate decision-makers, and policymakers, while also addressing gaps in the emerging market finance literature.