NOOR HASHIM, a Dar Al-Hekma, alumna presented her research on cash flow forecasts at the World Finance Conference in the New York this summer. Hashim’s paper titled “Do analysts’ cash flow forecasts improve the accuracy of their target prices?”, which was a development of her PhD thesis, is currently under review with the Contemporary Accounting Review Journal.
“Dar Al-Hekma University focuses on research as a learning and teaching tool; students and graduates find out the best way to acquire knowledge is by creating knowledge. Noor’s achievement is a point of pride to all of us in Dar Al-Hekma University and to the Hekma School of Business and Law,” said Dr. Suhair Hassan Al-Qurashi, the university’s president.
The feedback on Hashim’s presentation was positive. Angela Maddaloni from the European Central Bank was the discussant of the paper and Professor Alexander Kurov from West Virginia University was the chair of the session. It was a very lively discussion and Dr. Amal El-Tigani, vice president for finance and administration in Dar Al-Hekma University, also attended the conference and the presentation.
“The paper is an important contribution to the field of finance. It is an empirical research. It used statistical model to analyze the relationship between prices and analysis of cash flow forecast. The paper was well-received from the audience. Noor was very confident while presenting the paper. She responded to all the questions in a graceful and professional way. I am very proud of Dr. Noor Hashim, who was one of my excellent students in the MIS Department at Dar Al-Hekma,” said Dr. El-Tigani.
The idea of the research came to Hashim while examining individual equity analyst reports. She noticed that some reports include a cash flow forecast and other reports do not. Hashim then started to investigate the reasons behind these variations and whether they have consequences for market outputs. The study seeks to provide evidence about the sophistication of analysts’ cash flow forecasts by examining the association between cash flow forecast issuance and target price accuracy.
The main finding of the paper is that equity analysts who issue cash flow forecasts issue more accurate target prices, and that among issuing analysts, cash flow forecast accuracy is positively associated with target price accuracy. These findings suggest that analysts’ cash flow forecasts are sufficiently sophisticated to inform analysts’ target prices.
Though this is not Hashim’s first published research, her finding is very important because the question of why target prices have low accuracy compared to the analyst earnings forecasts has received a lot of research attention but the evidence on the sophistication of the target price forecasts remained mixed. The main challenge Hashim faced was publishing the paper because it involved a long peer-review process.
Hashim graduated from Dar Al-Hekma back in 2006 with a bachelor’s degree in Management Information Systems (MIS). Though Hashim said she chose MIS because it was the only business major offered at the time, she does not think she would have chosen differently today.
“I believe that my education at Dar Al-Hekma University helped me build excellent foundations. Specifically, the MIS program provided me with good background in business, information system and programming which helped me a lot in my postgraduate studies,” said Hashim reminiscing about her experience at Dar Al-Hekma.
After graduating from Dar Al-Hekma University, Hashim completed her Master of Science in Financial Economics at Cardiff University in the UK in 2007. Then, she worked for two years as an Investment Analyst at Aa’ayn Capital (now known as Sidra Capital) in Jeddah. Two years later, Hashim started her PhD research in 2009 at Manchester University and upon receiving the PhD she started her current job as a lecturer in Accounting and Finance at Lancaster University in the UK.
“In terms of plans, I am open for new experiences and opportunities and in terms of aspiration, I want to make outstanding contributions to research in my academic field. I understand that the field is very competitive but I am very devoted to my dreams and I am willing to go as far as possible to accomplish them,” concluded Hashim. – SG
