Asymmetric information influence on efficiency of capital market : case of Egypt stock exchange

Abstract EN

This paper aims at examining the asymmetric information problem effect on the efficacy of the capital market.

The definition and requirement of capital market efficiency, where a market is said to be “efficient” if prices adjust quickly and on average, without bias, to new information.

As a result, the current prices of securities reflect all available information at any given point in time.

Consequently, there is no reason to believe that prices are too high or too low.

Security prices adjust before an investor has time to trade on and profit from the new piece of information.

The study concluded that the Egypt Stock Exchange is not efficient at a semi-strong level.

This is due to the asymmetry of information resulting from leakage of information before announcement date.