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This research project explores how the credibility of financial reporting communication (CFRC) is perceived by the receiver i.e. financial analysts in Egyptian capital market (ECM) and investigates the credibility consequences in financial reporting communication. The study mainly focuses on exploring non-quantitative factors since their impact on credibility perceptions of financial analysts has not been sufficiently discussed in the financial reporting literature. Furthermore, the study also aims to explore to the role of the Egyptian Investor Relations managers' activities in general and regarding credibility in particular. Within this context, an attempt to suggest a credibility framework for financial reporting communication has been made since the perception of credibility is a subjective concept that cannot be quantified. In this thesis, the credibility components are categorised into dimensions of the CFRC perception and into factors relating to context that affect the perception of these dimensions. Following the socio-cultural perspective that treats credibility as a perceptual variable, credibility here is not an objective property of a source or a piece of information but rather a subjective perception on the part of the information receiver. This perspective underlines the receiver's perceptions of credibility rather than the objective credibility of a source or a piece of information (Flanagin and Metzger, 2008; Gradwell, 2004). A review is made of the relevant literature on the role of financial analysts, Investor Relations function, and credibility in the financial reporting and communication disciplines. An investigation of the legal and regulatory framework governing company communications with investors and financial analysts in Egypt is carried out. The credibility theoretical framework is based on the Pornpitakpan's (2004) approach for source credibility theory and credibility assessment framework presented by Hilligoss and Rieh (2008). Actually, this framework is modified to be implemented in the financial reporting communication in the ECM. The lack of previous empirical research on the role of the receivers' perceptions of credibility in capital market communications suggests the choice of an interpretative paradigm. The benefit of an interpretative perspective is that it helps to enrich the understanding of complex, ambiguous, and paradoxical phenomena (Lewis and Grimes, 1999). The data is collected through semi-structured interviews with twenty financial analysts and eight Investor Relations managers. The research site is companies registered in the Egyptian Stock Exchange (ESX). After that, the collected data has been summarised by applying the pattern coding technique suggested by Miles and Huberman (1994). To analyse the data, the pattern matching technique suggested by Trochim (1999) has been employed to compare the results of interviews and the patterns or categories from the CFRC's theoretical framework. The main findings from this thesis can be summarised as follows. First, credibility in financial reporting communication is a receiver-based construct, a multidimensional construct and a contextual construct. Second, the credibility dimensions and factors affecting the perception of these dimensions are found to be six dimensions and factors, namely, sender dimensions, disclosure dimensions, channel dimensions, receiver dimensions, destination dimensions and context factors. Finally, there are many challenges for Investor Relations functions in general and for enhancing credibility in particular in the Egyptian context. This study contributes to the credibility of financial reporting literature by indicating the following. Firstly, credibility perception represents an important factor in financial reporting communication. Secondly, this study provides empirical evidence of the credibility dimensions in financial reporting communication. Thirdly, this study also provides empirical evidence of the factors that affect the perception of credibility dimensions in financial reporting communication. Finally, this study proposes a credibility framework for financial reporting communication between managers and financial analysts. This study also contributes to Investor Relations practices by attempting to call the attention of Investor Relations scholars to the area of communication through studying the credibility of communication and its effects on this communication process. In addition, it contributes to theory by extending the constructionist model of source credibility theory in financial reporting communication. The key limitation for this thesis is that the findings are limited to generalisation as it is a qualitative exploratory study limited to financial analysts and Investor Relations managers within ECM. Although generalisation of the findings is the main limitation for most qualitative studies, the possibility of making generalisations for the theoretical framework is one of the main advantages of qualitative studies to overcome this limitation. As indicated earlier the theoretical framework in this thesis is based on the constructionist model of source credibility theory. Finally, the implications for future research arising from this thesis can be applied to research in the following areas. Firstly, this study can be applied to investigate how investors or shareholders perceive the dimensions of credibility in financial reporting communication with managers and or financial analysts. Secondly, it can also be deployed to investigate to what extent the internet reporting or using internet as a channel of communication is perceived as credible method of communication. The findings of these suggested studies may be helpful to build a general model of credibility which would be applied in different business communication.

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The study of the bid-ask spreads of stocks is important since they constitute the mechanism through which trading costs are incorporated into prices and recovered by market-makers. Realized spreads are a measure of the trading costs which private and institutional investors have to cover whereas quoted spreads are important in revealing the price-generating mechanisms involved. A comprehensive trade-indicator model of the bid-ask spread of common stocks has been developed which, unlike previous research, has incorporated trading volume, the depth at the quoted prices, the waiting-time between trades, as well as the fixed-cost-of-trade into equations for the changes in the quoted-spread, the ask, the bid and the transaction prices. The parameters of the models have been estimated using intraday data of NYSE and NASDAQ stocks, split into deciles on the basis of their trading activity as measured by the number of shares traded. For both exchange mechanisms I find that a large adverse-selection cost, which depends on the trading volume and a smaller inventory-holding cost are present in the quoted spread and that the parameters of both of these vary with trading activity. These costs are asymmetric in the bid and ask sides of the quoted spread, a feature not analyzed in previous empirical work. Only a small part of these costs is recovered in the realized spread through trading. My estimates of the adverse-selection cost present in the realized spread are close to the values given by other researchers but the size of the inventory-holding cost is found to be much lower probably owing to the shorter time-horizon of the data employed. The depth at the quotes is found to be symmetric, to affect the size of the spread of both the NYSE and NASDAQ stocks and also to be present in the realized spread. The parameters of the above components, as well as the fixed-cost-of-trade, are estimated and their patterns for the two trading mechanisms examined are compared and contrasted. Weak evidence is found for the waiting-time between trades both in the quoted and the realized spread. The results of this thesis, apart from offering support for recent empirical evidence which indicates that information first enters the price-process through the depths of the quotes and not the spread, also contribute to the formation of a more theoretically sound explanation. Moreover, the finding in this thesis that the adverse-selection cost for NASDAQ is larger compared to that of NYSE stocks is in line with other recent empirical research

Technical analysis is the study of price movements in traded markets so as to forecast future movements or identify trading opportunities. Following a review of the history and research of technical analysis, three empirical chapters evaluate a number of propositions popular among technical analysts. One approach used widely over the last century assumes that support and resistance levels can be predicted by projecting the ratios between the length and duration of successive trends, in particular using Fibonacci ratios like 1.618. This proposition is rejected for the Dow Jones Industrial Average by identifying turning points and testing for clustering by developing a block bootstrap procedure. A few significant ratios appear to support such anchoring by the market, but no more than would be expected by chance. The thesis then reports a survey based experiment that tests whether individuals themselves do have an in-built tendency to anchor forecasts of future trends on previous trends. The significance of the survey results are tested using a novel kernel density estimator based bootstrap methodology. Respondents' forecasts do bear some relationship to the size of the most recent trend by certain whole-number ratios by more often than would be expected by chance. The third experiment addresses the criticism that academic studies do not use a rich enough characterisation of technical analysis. 120 active market-timing strategies are tested using a regression based framework of equity fundamentals, macroeconomic fundamentals, behavioural variables and a diverse set of mainstream statistical indicators from technical analysis. Our recursive approach uses time-invariant rolling and expanding estimation windows as well as conditional windows based on the presence of structural breaks, identified using the conditional reverse ordered cusum method (ROC), of Pesaran and Timmermann (2002). Models that include both fundamental and technical indicators perform well, even allowing for realistic levels of transactions costs. And accounting for structural instability via the ROC method also improves performance.

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