Net equity issuance effect in the UK

Hang Zhou, Seth Armitage, Maria Michou

Research output: Journal PublicationArticlepeer-review

5 Citations (Scopus)


Net equity issuance (NEI) by firms has predictive power for US stock returns. This paper examines the NEI anomaly for UK stocks, using regression on firm characteristics and sorted portfolios with several factor models. The anomaly generalises to the UK only in part. We confirm the existence of a large NEI effect for small and midsize stocks, but not for large stocks. The repurchase effect, of positive abnormal returns following repurchases, is absent in the UK. We also find that the NEI effect in smaller stocks is not exploitable by investors, allowing for transaction costs.

Original languageEnglish
Pages (from-to)1420-1439
Number of pages20
JournalEuropean Journal of Finance
Issue number15
Publication statusPublished - 13 Oct 2019
Externally publishedYes


  • Net equity issuance
  • abnormal returns
  • asset pricing anomalies
  • factor models
  • net repurchases

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)


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