browser Warning Icon You are using an older version of Internet Explorer. You are viewing this site with limited functionalities.
Do Earnings Revisions Matter in Asia? Find out if earnings revisions can open up alternative sources of return in Asian markets.
BY Priscilla Luk


Earnings revision strategies have been regularly used by market participants for predicting stock price return or stock selection. In this research paper, we examined earnings revision strategies across seven Pan Asian markets—Australia, China, Hong Kong, India, Japan, South Korea, and Taiwan—between Dec. 31, 2005, and Dec. 31, 2016.


• Stock prices tended to move in the same direction as their earnings revisions in the majority of Pan Asian markets. Earnings revision strategies delivered the most significant excess returns in South Korea, India, and Taiwan, but they did not work in Japan.

• Market participants generally had stronger reactions to the net percentage of upward and downward revisions in earnings estimates rather than the percentage change of the consensus estimate figures.

• Earnings revision strategies tended to generate more alpha in the small-cap universe than in the large-mid-cap universe, although there was no strong sector or size bias.

Download Full Article (416K)

Sign up for email updates

Get our latest insight on the markets.

Thank you for subscribing!