Impacts of bank mergers on shareholder's wealth

Kumar, Arun; Yadav, Kumari Preeti; Mallik, Altaf; Gupta, Piyush

doi:10.55429/ijabf.v1i1.16

Cited by 6 publications

(2 citation statements)

References 16 publications

(20 reference statements)

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“…Furthermore, the impact of various events on different financial services and banking stocks has been a focal point for numerous studies (Hanif et al. , 2022; Rai et al. , 2022; Rai and Pandey, 2022).…”

Section: Background Of the Studymentioning

confidence: 99%

The impact of Credit Suisse takeover on Indian banking and financial services sector stocks: an event study analysis

Goyal,

Soni

2023

JES

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PurposeThe present study aims to comprehensively examine the impact of the Union Bank of Switzerland (UBS) takeover of Credit Suisse on the banking and financial services sector in the Indian stock market. To fully comprehend the impact of the event, the study separately investigates the response of private sector banks, public sector banks, overall banking companies and financial services companies to the takeover of the second-largest financial institution in Switzerland.Design/methodology/approachThe study employs event study methodology, using the market model, to analyze the event's impact on Indian banking and financial services sector stocks. The data consists of daily closing prices of companies included in the Nifty Private Bank Index, Nifty PSU Bank Index, Nifty Bank Index and Nifty Financial Services Index from the National Stock Exchange (NSE). Furthermore, cross-sectional regression analysis has been conducted to explore the factors that drive abnormal returns.FindingsThe empirical findings of the study suggest the event had a heterogeneous impact on the stock prices of Indian banks and financial services companies. While public sector banks experienced a significant negative impact on select days within the event window, the overall Indian banking sector and financial services companies also witnessed notable declines. In contrast, Indian private sector banks were relatively resilient, exhibiting minimal effects. However, the cumulative effect is found to be insignificant for all four categories across different event windows. The study also observed that the cumulative abnormal returns (CARs) were significantly influenced by certain variables during different event windows.Originality/valueTo the best of the authors' knowledge, the present study is the earliest attempt that investigates the impact of the UBS takeover of Credit Suisse on the Indian banking and financial services sector using event study methodology and cross-sectional regression model.

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Section: Background Of the Studymentioning

confidence: 99%

The impact of Credit Suisse takeover on Indian banking and financial services sector stocks: an event study analysis

Goyal,

Soni

2023

JES

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“…The literature also evidenced several methodological developments (Ataullah et al , 2011; Brown and Warner, 1980, 1985; Corrado, 1989). The focus of these studies has expanded from just stock splits and mergers to other events such as the announcement of dividends (Chatterjee and Dutta, 2017; Pandey et al , 2022; Pandey and Kumari, 2021b; Rosario and Chavali, 2016), share repurchases (Hackethal and Zdantchouk, 2006; Rees, 1996), debt offerings (Spiess and Affleck-Graves, 1999), mergers (Pandey and Kumari, 2020; Rai et al , 2022) and corporate restructuring (Poon et al , 2001; Renneboog and Szilagyi, 2008). Apart from these corporate events, event studies have been introduced to examine the effects of privatization (Rai and Pandey, 2021), terrorist attacks (Kim et al , 2022; Papakyriakou et al , 2019), natural disasters (Chen et al , 2023; Malik et al , 2020) and geopolitical events (Egger and Zhu, 2020; Hassan et al , 2022; Kumari et al , 2022) on stock prices.…”

Section: Introductionmentioning

confidence: 99%

Impacts of climate pact on global oil and gas sector stocks

Kumari

Assaf

Moussa

et al. 2023

SEF

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Purpose The purpose of this study is to examine the impacts of the Glasgow Climate Pact on global oil and gas sector stocks. Further, this study also examines if the nations' Climate Change Performance Index (CCPI) and World Energy Trilemma Index (WETI) drive the abnormal returns around the event. Design/methodology/approach The authors apply the event study analysis to 691 global oil and gas firms across 52 countries. Further, they apply the cross-sectional examination of cumulative abnormal returns (CARs) across 502 firms. Findings The emerging markets experienced significant negative abnormal returns on the event day. The CCPI negatively affects longer pre-event CARs, while WETI significantly negatively associates with CARs during longer pre- and post-event windows. Volatility is negatively related to pre- and post-event abnormal returns, while past returns positively drive pre-event period CARs but negatively drive post-event window CARs. This study finds an interesting association between liquidity (CACL) and CARs, as CACL positively drives pre-event CARs, but post-event CARs are negatively associated with CACL. The CARs do not significantly correlate with leverage, size and book-to-market ratio. Practical implications This study's findings on the impact of climate risks on financial markets have significant implications for global regulatory bodies. Policymakers should reduce stock volatility and enhance environmental disclosures by publicly traded companies to accurately price and assess the potential impacts of climate risks. Governments should examine the effects of environmental restrictions on investor behavior, especially in developing countries with limited access to capital. Therefore, policymakers need to consider the far-reaching impacts of environmental regulations while introducing them. Originality/value Climate risks are expected to impact the global financial market significantly. Prior studies provide limited evidence on how such climate pacts impact the oil and gas sector. Hence, this study, while bridging this gap, provides important implications for policymakers and stakeholders, particularly the emerging markets that are more sensitive.

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