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Title: | Testing the efficiency of Indian stock market vis-à-vis merger and acquisitions - a study of Indian banking sector |
Authors: | Ahmad Khan, Azeem Ikram, Sana |
Keywords: | Markets -- India Efficient market theory Hypothesis Bank mergers -- India Consolidation and merger of corporations -- India |
Issue Date: | 2012 |
Publisher: | ISMASYSTEMS Scientific Research |
Citation: | Ahmad Khan, A., & Ikram, S. (2012). Testing the efficiency of Indian stock market vis-à-vis merger and acquisitions - a study of Indian banking sector. International Journal of Finance, Insurance and Risk Management, 2(2), 155-168. |
Abstract: | The objective of the present study is to test the efficiency of the Indian Stock Market with respect to the announcement of Mergers and Acquisitions (M&As) in the Indian Banking Sector by employing the Standard Risk Adjusted Event Study Methodology. In order to analyze the effects of the announcements of Bank’s Merger and Acquisitions on Stock Price’s Risk Adjusted Rate of Return using 6 recent mergers as of 21st Jan 2003 to 19th May 2009. All the acquiring banks are either traded on the SENSEX, BSE 200 or BSE 100. The three forms of Efficient Market Hypothesis (EMH) i.e., weak, semi-strong and strong form of EMH are being tested under this study in order to test the investor’s ability to earn positive abnormal return on the merger announcement. Specifically, Semi-strong form of EMH is being tested in this study to analyze how quickly the market reacts to the new information, exploring the idea of an investor’s ability to earn an abnormal return against the market. Evidence here supports the efficiency of the market in its semi-strong form of EMH by accepting both the null hypotheses. It is observed that neither before nor after the merger announcement investors are able to earn abnormal/excess return. |
URI: | https://www.um.edu.mt/library/oar/handle/123456789/69106 |
Appears in Collections: | Volume 2, Issue 2, 2012 |
Files in This Item:
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Testing_the_efficiency_of_indian_stock_market_vis_a_vis_merger_and_acquisitions.pdf | 227.46 kB | Adobe PDF | View/Open |
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