Mustafa Kevser

  Mesut Doğan

  Ayşenur Tarakçioğlu Altinay


The aim of this research was to investigate the impact of stock buy-sell recommendations of brokerage houses on the stock returns of banks operating in Borsa Istanbul (BIST). Accordingly, it has been attempted to assess if investors can receive abnormal returns in accordance with the recommendations of brokerage houses using the case study technique. The validity of the semi-strong effective form of investors who made a buying-selling decision based on brokerage house recommendations was investigated. The returns of the banks' stocks were obtained from the data-stream database. The study evaluated buy-sell recommendations for four large brokerage houses and analyzed data from January 2018 through December 2020. The event study method was used, and t-test was performed in order to determine the difference of abnormal returns from zero in the research. As a result of the research, a negative abnormal return was determined on the day of the event and the day after the sell recommendation was given. Besides, a positive abnormal return was determined on the day before the announcement and on the day of the event in the bank stocks on which buy recommendation has been given. In this respect, the average abnormal and cumulative abnormal returns indicated that BIST was not an efficient market in a semi-strong form for the banking sector. When the sell recommendations and their effects are examined within the scope of the research, it is seen that the day before [-1] p=0.016 value was obtained, on the day, [0] p=0.018 value was obtained, the next day and two days later [+1, +2] p=0.077 and 0.046 values were obtained. On the other hand, when the buy recommendations and their effects are examined, it is seen that the day before [-1] p=0.000 and on the day [0] p=0.098 values were obtained. T-test results and p values show that brokerage house recommendations are effective on stock returns in the BIST banking sector, and therefore BIST banking sector is effective in a weak form. The obtained results of the study were crucial for investors who invested in short-term stocks.

How to Cite

Kevser, M., Doğan, M., & Tarakçioğlu Altinay, A. (2022). THE IMPACT OF BUY – SELL RECOMMENDATIONS ON BANKS’ STOCK RETURNS. Baltic Journal of Economic Studies, 8(2), 1-10.
Article views: 182 | PDF Downloads: 93



Stock markets, BIST, event study, efficient market hypothesis


Arun, S., Shankaran, B., & Jayadev, M. (2016). Investment Value of Analyst Recommendations: Evidence from the Indian Stock Market. South Asian Journal of Management, 23(2).

Bedelova, L., Yıldız, Y., & Karan, M. B. (2017). Aracı Kurum Tavsiyelerinin Hisse Senedi Fiyatı Üzerindeki Etkisi: Türkiye Örneği. Muhasebe ve Finansman Dergisi, 74, 97–118.

Berkman, H., & Yang, W. (2019). Country-Level Analyst Recommendations and International Stock Market Returns. Journal of Banking and Finance, 103, 1–17.

Chatterjee, D., Kumar, S., & Chatterjee, P. (2020). Time to Payoff. Efficacy of Analyst Recommendations in the Indian Stock Market. Industrial and Management Engineering, 32, 153–165.

Fama, E. F. (1965). The Behavior of Stock-Market Prices. The Journal of Business, 38(1), 34–105.

Grossman, S. J., & Stiglitz, J. E. (1980). On the Impossibility of Informationally Efficient Markets. American Economic Review, 70, 393–408.

Groth, J. C., Lewellen, W. G., Schlarbaum, G. G., & Lease, R. C. (1979) An Analysis of Brokerage House Securities Recommendations. Financial Analysts Journal, 35, 32–40.

Jiang, G. J., & Kim, W. (2013). Evaluating Analysts’ Value: Evidence from Recommendation Revisions Around Stock Price Jumps. The European Journal of Finance, 22(3), 167–194.

Karan, M. B., & Ressamoğlu, Y. (1996). Haftalık Borsa Dergilerindeki Uzman Görüşlerinin Hisse Senetleri Performanslarına Etkileri. H.Ü. İktisadi ve İdari Bilimler Fakültesi Dergisi, 14(2), 121–137.

Kudryavtsev, A. (2021). The Correlation Between Stock Returns Before and After Analyst Recommendation Revisions. Economic Annals, 66(228), 69–100.

Malkiel, B. G. (2003). The Efficient Market Hypothesis and Its Critics. Journal of Economic Perspectives, 17(1), 59–82.

Mandacı, P. E. (2018). Etkin Piyasa Hipotezi. Gündoğdu, A. (Ed.), Finansın Temel Teorileri (2018) içinde (83-111). İstanbul: Beta Yayınları.

Murg, M., Pachler, M., & Zeitlberger, A.C.M. (2016). The Impact of Analyst Recommendations on Stock Prices in Austria (2000-2014): Evidence from a Small and Thinly Traded Market. Central European Journal of Operations Research (CEJOR), 24, 595–616.

Stickel, S. E. (1995). The Anatomy of the Performance of Buy and Sell Recommendations. Financial Analysts Journal, 51(5), 25–39. DOI:

Sharda, S. (2021). The Short-Term Impact of Analyst Recommendations: Evidence from the Indian Stock Market. Vilakshan-XIMB Journal of Management.

Song, S. I., & Chu, E. Y. (2017). The Accuracy of Analysts’ Recommendations on Malaysian Stock Prices. Available at SSRN 3095364.

Su, C., Zhang, H., & Joseph, N. L. (2020). The performance of UK stock recommendation revisions: Does brokerage house reputation matter? International Journal of Finance & Economics.

Su, C., Zhang, H., Bangassa, K., & Joseph, N. L. (2019). On the investment value of sell-side analyst recommendation revisions in the UK. Review of Quantitative Finance and Accounting, 53(1), 257–293.

Taze Arısoy, Müge. (2020). Aracı Kurumların Tavsiye Performanslarının Değerlendirilmesi: Öncü Beş Aracı Kurum Üzerine Çalışma, Yüksek Lisans Tezi, Ankara, 2020.

Tiniç, M., Tanyeri, B., & Bodur, M. (2021). Who to trust? Reactions to Analyst Recommendations of Domestic Versus Foreign Brokerage Houses in a Developing Stock Market. Finance Research Letters, 101950.

Yazıcı, B., & Muradoğlu, G. (2002). Dissemination of Stock Recommendations and Small Investors: Who Benefits? Multinational Finance Journal, 6(1), 29–42.