Stock market reactions of Malaysian firms and industries towards events surrounding COVID-19 announcements and number of confirmed cases

IF 2.1 Q2 BUSINESS, FINANCE Pacific Accounting Review Pub Date : 2022-06-06 DOI:10.1108/par-08-2020-0125
Redhwan Aldhamari, Ku Nor Izah Ku Ismail, Haithm Mohammed Al-sabri, M. Saleh
{"title":"Stock market reactions of Malaysian firms and industries towards events surrounding COVID-19 announcements and number of confirmed cases","authors":"Redhwan Aldhamari, Ku Nor Izah Ku Ismail, Haithm Mohammed Al-sabri, M. Saleh","doi":"10.1108/par-08-2020-0125","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThis paper aims to examine the stock market reactions of firms and industries in Malaysia to the government’s COVID-19 movement control order (MCO) announcement. As China is Malaysia’s leading trading partner, the authors also observe if the Chinese Government’s confirmation of human-to-human coronavirus transmission affects firms’ stock market reactions. In addition, this study examines whether the Malaysian Government’s ease of restrictions on economic activities affects firms’ stock market reactions. Finally, this study analyses the effect of COVID-19 number of confirmed cases on firms’ abnormal returns.\n\n\nDesign/methodology/approach\nThis study uses an event study methodology to determine the abnormal returns between day −30 to day 30 of the announcements. In addition, this study uses the regression estimation to determine whether the COVID-19 number of confirmed cases explain the abnormal returns.\n\n\nFindings\nThis study finds that investors react negatively to the announcement of the MCO and confirmation of the human-to-human transmission of coronavirus over the event windows. However, the cumulative average abnormal returns (CAARs) started to recover when stimulus packages were introduced, and the lockdown measures were eased, allowing businesses to reopen. This study also finds that only firms in the health-care sector reported significant positive CAARs. Stock returns of the utilities and telecommunication firms showed no changes, while eight other sectors fell remarkably. The results also show that the COVID-19 number of confirmed cases adversely affects firms’ abnormal returns.\n\n\nPractical implications\nThis study suggests that stock prices incorporate bad and good news surrounding the announcements of major international and local events related to the COVID-19 pandemic. Thus, investors should consider such factors in making investment decisions.\n\n\nOriginality/value\nTo the best of the authors’ knowledge, this paper is one of the early research works investigating the stock market reactions to the COVID-19 major announcements (MCO, human-to-human transmission and ease of restrictions on economic activities) using an event study methodology in an emerging market, namely, Malaysia. This study is timely in light of the recently increasing calls for researchers to analyse the potential economic impacts of COVID-19 on global capital markets, especially in emerging markets whose evidence is scarce.\n","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1000,"publicationDate":"2022-06-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Pacific Accounting Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/par-08-2020-0125","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 3

Abstract

Purpose This paper aims to examine the stock market reactions of firms and industries in Malaysia to the government’s COVID-19 movement control order (MCO) announcement. As China is Malaysia’s leading trading partner, the authors also observe if the Chinese Government’s confirmation of human-to-human coronavirus transmission affects firms’ stock market reactions. In addition, this study examines whether the Malaysian Government’s ease of restrictions on economic activities affects firms’ stock market reactions. Finally, this study analyses the effect of COVID-19 number of confirmed cases on firms’ abnormal returns. Design/methodology/approach This study uses an event study methodology to determine the abnormal returns between day −30 to day 30 of the announcements. In addition, this study uses the regression estimation to determine whether the COVID-19 number of confirmed cases explain the abnormal returns. Findings This study finds that investors react negatively to the announcement of the MCO and confirmation of the human-to-human transmission of coronavirus over the event windows. However, the cumulative average abnormal returns (CAARs) started to recover when stimulus packages were introduced, and the lockdown measures were eased, allowing businesses to reopen. This study also finds that only firms in the health-care sector reported significant positive CAARs. Stock returns of the utilities and telecommunication firms showed no changes, while eight other sectors fell remarkably. The results also show that the COVID-19 number of confirmed cases adversely affects firms’ abnormal returns. Practical implications This study suggests that stock prices incorporate bad and good news surrounding the announcements of major international and local events related to the COVID-19 pandemic. Thus, investors should consider such factors in making investment decisions. Originality/value To the best of the authors’ knowledge, this paper is one of the early research works investigating the stock market reactions to the COVID-19 major announcements (MCO, human-to-human transmission and ease of restrictions on economic activities) using an event study methodology in an emerging market, namely, Malaysia. This study is timely in light of the recently increasing calls for researchers to analyse the potential economic impacts of COVID-19 on global capital markets, especially in emerging markets whose evidence is scarce.
查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
马来西亚公司和行业对围绕新冠肺炎公告和确诊病例数的事件的股市反应
目的本文旨在研究马来西亚企业和行业对政府新冠肺炎运动控制令(MCO)公告的股票市场反应。由于中国是马来西亚的主要贸易伙伴,作者还观察了中国政府对冠状病毒人传人的确认是否会影响企业的股市反应。此外,本研究还考察了马来西亚政府放松对经济活动的限制是否会影响企业的股市反应。最后,本研究分析了新冠肺炎确诊病例数对企业异常回报的影响。设计/方法/方法本研究使用事件研究方法来确定公告第−30天至第30天之间的异常回报。此外,本研究使用回归估计来确定新冠肺炎确诊病例数是否解释了异常回报。发现这项研究发现,投资者对MCO的宣布和冠状病毒在事件窗口人际传播的确认反应消极。然而,当刺激计划出台时,累计平均异常回报率(CAAR)开始恢复,封锁措施放松,允许企业重新开业。这项研究还发现,只有医疗保健部门的公司报告了显著的积极CAAR。公用事业和电信公司的股票回报率没有变化,而其他八个行业的股价则大幅下跌。结果还表明,新冠肺炎确诊病例数量对企业的异常回报产生了不利影响。实际含义这项研究表明,股价包含了与新冠肺炎大流行有关的重大国际和地方事件的公告的坏消息和好消息。因此,投资者在作出投资决策时应考虑这些因素。原创/价值据作者所知,本文是早期的研究作品之一,采用事件研究方法,调查了新兴市场(即马来西亚)股市对新冠肺炎重大公告(MCO、人与人之间的传播和经济活动限制的放松)的反应。鉴于最近越来越多的人要求研究人员分析新冠肺炎对全球资本市场的潜在经济影响,特别是在证据不足的新兴市场,这项研究是及时的。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
Pacific Accounting Review
Pacific Accounting Review BUSINESS, FINANCE-
CiteScore
3.80
自引率
9.50%
发文量
36
期刊介绍: Pacific Accounting Review is a quarterly journal publishing original research papers and book reviews. The journal is supported by all New Zealand Universities and has the backing of academics from many universities in the Pacific region. The journal publishes papers from both empirical and theoretical forms of research into current developments in accounting and finance and provides insight into how present practice is shaped and formed. Specific areas include but are not limited to: - Emerging Markets and Economies - Political/Social contexts - Financial Reporting - Auditing and Governance - Management Accounting.
期刊最新文献
Auditor mood and audit quality: evidence from music sentiment measure Dissatisfaction with professional accountant training: the role of learning styles CSR disclosure quantity to CSR disclosure quality – in pursuit of a disclosure quality index Social capital and business strategy Corporate tax performance and the COVID-19 pandemic: empirical evidence from Indonesia
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1