Fundamental investor ownership lower market reactions | KPMG | GLOBAL

When fundamental investors relieve market pressures on management: Evidence from Europe

Fundamental investor ownership lower market reactions

This latest management paper shows that firms with greater fundamental investor ownership experience lower market reactions to earnings announcements and lower mispricing.

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KPMG in the UK

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KPMG’s Global Valuation Institute (GVI) is pleased to introduce its eighth management paper, When fundamental investors relieve market pressures on management: Evidence from Europe.

This latest management paper shows that firms with greater fundamental investor ownership experience lower market reactions to earnings announcements and lower mispricing. Fundamental investors – defined as investors who, on average, hold their shares for at least two years – are not focused on short-term performance and have a longer investment horizon. Based on a comprehensive sample of listed European companies, the paper’s findings suggest that fundamental investor ownership reduces the degree of market mispricing and overreactions, which, in turn, serves long-run shareholder value maximization.

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