Financial analyst as market movers

This paper examines the effect of analysts’ recommendation on stock return by investigating the usefulness of analysts’ recommendation on firms listed in Kuala Lumpur Stock Exchange (KLSE) or known as Bursa Malaysia. The study covers all recommendations made on a sample of 30 top companies that trades in Bursa Malaysia. Literature documents that recommended stocks experience abnormal returns on the announcement date, and these issues drive investors to trade, thus moving the recommended stock prices. Though financial analysts’ recommendation becomes one of the issues that move the stock price, how strong the impact of the recommendation released into the market and the investors' actions to follow the recommendation is still unknown. Financial analysts’ issue “buy”, “sell’ or “hold” recommendations for highly profitable stocks. These recommendations have value if investors trade upon them in the market, which will then affect the stock prices