Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2002

A research submitted in partial fulfillment of the requirements for the degree of Master of Business and Administration, School of Management

In emerging market, individual investors face a lot of risks, especially information risks. Because of these risks, the investors could not behave consistently with true value of information. One of the biggest reasons is lack of the effective communication between the listed companies and investors. Using a database of daily return, this research investigates the reaction of stock price to firm-specific information. Moreover, interviews concerning people and a survey on individual investors were conducted in order to examine the behaviours of Vietnamese individual investors, risks that they face and the IR activities of listed companies. Main finding indicates that the reaction of stock price to firm-specific information is considerably delayed or inexistent. The individual investors mostly behave upon their psychological movements. The listed companies do not concern much about investor communication activities. Therefore, investors cannot either access to information, or have enough information or assess correctly. Finally, a dedicated IR program is designed for listed companies, based on the findings from this research.