Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

PurposeThe authors analyze the impact of COVID-19 on listed European electricity companies and differentiate between renewable and traditional electricity, to show the heterogenous characteristics of electricity subsectors and the differences between renewable and traditional electricity.Design/methodology/approachUsing the event study method, the authors calculate the cumulative average abnormal returns (ARs) before and after the World Health Organization pandemic announcement and the declaration of national lockdowns in Europe.FindingsThe results show that while the European electricity sector was overall negatively impacted by the COVID-19 announcement, this impact was larger for renewable companies due to their riskier investment profile. Moreover, after the national lockdowns came into effect, the recovery in the financial markets return was smaller for the latter.Research limitations/implicationsThere may be variables to be included in the model to analyze possible differences between companies and countries, as well as alternative econometric models. Limited to the data, the authors did not investigate the different impact of the economic policy uncertainty from various countries inside or outside the EU.Practical implicationsThe results have important implications for both investors and policymakers since the heterogenous characteristics of electricity subsectors. This heterogeneity prompts different investor reactions, which are necessary to know and to understand.Originality/valueAs far as the authors know, this is the first study that analyses the effect of COVID-19 in heterogeneity profile of both types of electricity, renewable and traditional.

An Empirical Analysis of the Annual Report Effect of High Market Capitalization Companies in China

In this paper, we study the abnormal stock price returns of the top 10 stocks in the Chinese stock market in terms of total market capitalization before and after the release of their annual reports in the past 10 years, using the event study method implemented by the Event Study package of the Alpha Library under Python, using a market model to estimate normal returns. The results find that and most of the events have insider phenomenon.

FINANCIAL SECTOR STOCKS REACTION TO COVID-19 EVENTS

Price fluctuations in the financial sector are often of major interest when projecting the general performance and state of the economy. The implications of the COVID-19 pandemic in the sector are analyzed through the event study method. A random sample portfolio of 20 financial sector stocks listed on the NYSE is used and its reaction on 15 different events throughout 2020 is observed. Results indicate that events in the earlier stage of the pandemic exhibit both higher abnormal returns and significance, compared to the ones at the latter stages, with a larger proportion of them being bad news. The financial sector is perceived to react significantly in such cases, usually anticipating them beforehand. As adjustment windows are rarely significant, the market’s reaction is deemed as efficient. The general conclusion is that the financial sector stocks react to important COVID-19 news, generating abnormal rather than expected returns.

Food and beverage stocks responding to COVID-19

This paper investigated how food and beverage (F&B) stocks react to COVID-19. The event study method was applied to four events including the first and second events, were the first COVID-19 positive patients detected in the largest and second-largest economic center of Vietnam. The third and fourth events are related to strong measures to prevent the spread of COVID-19: the nationwide lockdown at the beginning of the second quarter of 2020, and the lockdown of Danang at the beginning of the third quarter of 2020. The results show that the reaction of F&B stock prices to events supports the semi-strong form of efficient market theory. The strong and lasting negative reaction of F&B stocks to the first event can be explained by surprise (first case in Vietnam) and Hochiminh city’s economic engine driving role in the development of Vietnam’s economy. The study finds that heuristic decision-making from nationwide lockdowns (suppression of supply chains during lockdowns) can explain the sub-sector of farming-fishing-ranching products reacted more strongly to the lockdown event in Danang. Based on the research results, this paper provides some policy implications for managers and notes for securities investors.

Epidemics and Chinese firms' stock returns: is COVID-19 different?

PurposeThis study investigates the Chinese stocks' returns during different epidemic periods to assess their effects on firms' market performance.Design/methodology/approachThe study employs an event study method on more than 3,000 firms listed on Shanghai and Shenzhen stock exchanges during periods of SARS, H5N1, H7N9 and COVID-19FindingsEpidemics' effect on firms' stock returns is persistent up to 10 days after the event dates. Although the impact varies with types and development of the disease, most firms experience a negative impact of the epidemics. Among the epidemics, COVID-19 has the greatest impact, especially when it grows into a pandemic. The epidemics' impact is uneven across industries. In addition, B-shares and stocks listed on Shanghai Stock Exchange are more negatively influenced by the epidemic than A-shares and those listed on Shenzhen Stock Exchange.Research limitations/implicationsThe results of the study contribute to the limited literature on the effects of disease outbreaks as an economic shock on firm market performance. Given the possibility of other epidemics in the future, the study provides guidance for investors in designing an appropriate investing strategy to cope with the epidemic shocks to the market.Originality/valueThe research is novel in the way it compares and assesses the economic impact of different epidemics on firms and considers their impact at different development stages.

A time to throw stones, a time to reap: how long does it take for democratic transitions to improve institutional outcomes?

We study the impact of democratic transitions on institutional outcomes. Using an event study method and a sample of 135 countries over the period 1984–2016, we observe that democratic transitions improve institutional outcomes. The effect appears within 3 years after the transition year. The results are robust to alternative definitions of transitions, alternative codings of pre- and post-transition years, and changing the set of control variables. We also find that both full and partial democratizations improve institutional outcomes. Transitions out of military regimes or communist autocracies do not. The effect of democratization depends on GDP per capita, education, and the regularity of the transition. Finally, the evidence suggests that the effect is particularly clear on the corruption, law and order, and military in politics dimensions of the index.

The Effect of Ramadan on the Indonesian Sharia Stock Index

<p><em>As the most prominent Muslim majority country globally, Ramadan is a viral religious celebration in Indonesia. This study aims to determine the effect of the month of Ramadan on the performance of Islamic stocks in food and beverage companies. This study uses the event study method with a paired sample t-test as a test instrument. Sharia stock performance uses variable returns, abnormal returns, trading volume activity, and variability of securities returns from 2013-2020 during Shaban, Ramadan, and Syawal. This study indicates that the return variable and trading volume activity have a significant difference at the moment and after the month of Ramadan. In contrast, the other tests have no difference. Directly, during the month of Ramadan, the level of public consumption increases along with increasing needs. Indirectly, the traditions of the month of Ramadan also affect performance in the capital market. This phenomenon will affect sentiment in stock transactions based on the festive atmosphere brought by the month of Ramadan.</em></p>