Terrorist Activities, Investor Sentiment, and Stock Returns: Evidence From Pakistan

Ali, Hashmat; Memon, Zulfiqar Ali; Khan, Ajab; Khan, Muhammad Muddassar; Ali, Irfan; Baz, Khan; Arif, Muhammad; Hussain, Manzoor; Jalal, Waqar

doi:10.32479/ijefi.9591

Cited by 4 publications

(6 citation statements)

References 26 publications

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“…Research conducted by Siswantoro (2020) found that there was a significant difference in the TVA variables of hotel, restaurant, and tourism sub-sector stocks. Another study with a similar result was conducted by Ali et al (2020) who tested the impact of the terrorist incidents on the Pakistan stock exchange. It was concluded that the event has affected investor sentiment and confidence because there was a significant trading volume activity difference before and after the event.…”

Section: The Effect Of Emergency Ppkm Policy Announcement On Trading ...mentioning

confidence: 79%

Market Reactions to Emergency Community Activity Restrictions Policy

Salsabella

Widiyanti²,

Muthia³

et al. 2022

ajeks

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This research uses the event study method to test the reaction of capital markets before and after the announcement of the Emergency Community Activity Restrictions (PPKM) policy. The observation period includes 7 days before and 7 days after the event. By using purposive sampling method, the research sample amounts to 29 stocks of the hotel, restaurant, and tourism companies listed on the Indonesia Stock Exchange. The hypothesis is tested with Paired Samples T-Test for those with normal distribution and Wilcoxon Signed Ranks Test for those with no normal distribution. The results showed that there was a difference in average trading volume activity. While average abnormal return and average security return variability did not have significant differences around the announcement. This research implies that stock investors need to consider information about government policies or other non-economic events to appropriately sort out relevant information to sell or maintain stocks under the risks and returns expected by investors. Keywords: Abnormal Return, Trading Volume Activity, Security Return Variability, The Emergency PPKM Policy, Event Study

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Section: The Effect Of Emergency Ppkm Policy Announcement On Trading ...mentioning

confidence: 79%

Market Reactions to Emergency Community Activity Restrictions Policy

Salsabella

Widiyanti²,

Muthia³

et al. 2022

ajeks

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“…This result aligns with the studies of Caldara and Iacoviello (2018) and Salisu et al (2022), which also report that threats of GPRs impacted more on the market than actual realization or occurrence of these risks. Similarly, from the analysis of cumulative abnormal returns in the aftermaths of terrorist incidents, Ali et al (2020) provide strong evidence that the terrorist incidents adversely affect investors' sentiments and confidence in the market as manifested through relatively feeble trading volumes. Recent studies such as Eldor and Melnick (2004), Farooq and Ahmed (2008), Kollias et al (2010, 2011), Wijeweera (2015), Narayan et al (2018), and Khan et al (2020) involving different countries that are prone to some of the components of GPRs, such as terrorist attacks, political tension, and war, have demonstrated the broad and destructive effects of GPRs on investors' confidence with effects on the performance of stock, forex, and money markets.…”

Section: Discussion Of Resultsmentioning

confidence: 99%

“…Here, we formulate an empirical model that examines the impact of GPR on GFCy. There are already numerous studies analyzing the relationship between GPR and financial assets especially stocks, on the basis of the risk-return hypothesis and other portfolio management theories (see Ali et al, 2020;Apergis et al, 2017;Balcilar et al, 2018;Bouras et al, 2019;Brounen & Derwall, 2010;Chen & Siems, 2004;Chesney et al, 2011;Hoque & Zaidi, 2020;Hui, 2020;Narayan et al, 2018;Yang et al, 2021). We construct a predictive model that connects high-risk events to investment in risky assets.…”

Section: Methodsmentioning

confidence: 99%

Section: Main Findingsmentioning

confidence: 96%

See 1 more Smart Citation

Geopolitical risk and global financial cycle: Some forecasting experiments

Salisu

Omoke

Sikiru³

2022

Journal of Forecasting

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In this study, we investigate the connection between geopolitical risk (GPR) and global financial cycle (GFCy) as well as whether the former has predictive value for the out‐of‐sample predictability of the latter. We utilize both the historical and recent GPR data and their variants, namely, GPR act covering all “acts” that constitute GPR such as war, nuclear invasion and terrorism, and GPR threat, which represents threats of these acts. We construct a predictive model that accommodates the salient features of the predicted and predictor series while the forecast evaluation is conducted for both in‐sample and out‐of‐sample periods. Our findings reveal that a rise in GPR discourages investments in risky assets and by implication worsens GFCy. The impact is more severe after the global financial crisis (gfc), and the GPR threat exerts more adverse effect on GFCy compared with GPR act regardless of whether historical GPR or recent GPR is used. Meanwhile, the predictive model of GFCy that accommodates the GPR data outperforms the benchmark model that ignores it both in the in‐sample and out‐of‐sample estimates albeit with improved forecast performance during the post‐gfc period and at a longer forecast horizon. However, the recent GPR data, which are broader in scope, offer better forecast accuracy than the historical GPR data. Additional analyses involving the vulnerability of global economic conditions reveal similar outcomes as GFCy.

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“…The study recommends that the government focus on equipping young people with useful skills to engage them in constructive activities. Ali, Qingshi, Memon, Baz, & Ali (2017) explored the impact of different terrorist attacks on the Pakistan Stock Exchange. Their study utilized a model that incorporates the effects of new and good news on changing volatility.…”

Section: Empirical Reviewmentioning

confidence: 99%

Analysis of the Impact of Insecurity on Youth Unemployment (1990-2020)

Musa

2024

IJMEBE

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Using the ordinary least square estimation technique (OLS), this research examines the impact of insecurity on youth unemployment in Nigeria between 1990 and 2020. The study focuses on the relationship between the dependent variable, unemployment (UNE), and two independent variables, the National Terrorism Index (NTI) and Crime Rate (CR). The results reveal that NTI has a positive and statistically significant effect on UNE. Specifically, a unit increase in NTI leads to a 0.000827 rise in unemployment. Additionally, Nigerian CR demonstrates a significant and positive influence on UNE, with an increase in CR resulting in a 0.005653 increase in unemployment. Given that heightened insecurity directly contributes to unemployment, the study proposes several policy recommendations. Firstly, the government should consider reducing interest rates in commercial banks to enhance the availability of loans for small business owners, enabling them to hire more employees. Furthermore, addressing corruption in both public and private sectors, combating kidnappings, and establishing additional skill acquisition centers are crucial measures to tackle the issue of insecurity and promote employment opportunities.

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Terrorist Activities, Investor Sentiment, and Stock Returns: Evidence From Pakistan

Cited by 4 publications

References 26 publications

Market Reactions to Emergency Community Activity Restrictions Policy

Market Reactions to Emergency Community Activity Restrictions Policy

Geopolitical risk and global financial cycle: Some forecasting experiments

Analysis of the Impact of Insecurity on Youth Unemployment (1990-2020)

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