There has been lot of reseach with respect to the impact of events on the stock prices. To help better understand the consequences of investors behavior it will be useful to examine the relationship between internal events and stock market reaction. With this respect, I will graph simple time series of events annoucements such as Stake Purchases, Merger & Acquisitions, Follow-on(Right-Issue), Stock Split, IPO etc. The more common types of announcements such as Dividends and Earning Annoucemnent has been included in the analyses as they jitters the time-series.
I’ve developed only Seven time series plots where each graphs represents an industry. The scrips in each industry are allocation with respect GICS Industry specification as per Thomson Reuters.
To start with the banking sector, the graph below shows different banks. On each series, the events has been marked with a alphabet. The detail of the corresponding event in shown in the right annotation box mapped with the alphabet. For example, the MCB bank as shown with the blue series, the marker B shows that price increased immediately after MC announced that it acquires undisclosed bank in Kenya. Similarly, the pink series represent HBL. If look the market N, the price increased after HBL acquires Barclays PLC.
We can witness different reaction to annoucements in the Cement Sector
As we have witnessed changes in Prices when there is a corporate event or annoucements, going forward a econometric model can developed to analyse it statistically. As mentioned, I have only took a sample of few companies and events, just to have an overview of how the event effects prices. Going forward, to analyze it statistically, all the companies along with all events events including
can be used.