Purpose This paper aims to examine the stock market reactions of firms and industries in Malaysia to the government’s COVID-19 movement control order (MCO) announcement. As China is Malaysia’s leading trading partner, the authors also observe if the Chinese Government’s confirmation of human-to-human coronavirus transmission affects firms’ stock market reactions. In addition, this study examines whether the Malaysian Government’s ease of restrictions on economic activities affects firms’ stock market reactions. Finally, this study analyses the effect of COVID-19 number of confirmed cases on firms’ abnormal returns. Design/methodology/approach This study uses an event study methodology to determine the abnormal returns between day −30 to day 30 of the announcements. In addition, this study uses the regression estimation to determine whether the COVID-19 number of confirmed cases explain the abnormal returns. Findings This study finds that investors react negatively to the announcement of the MCO and confirmation of the human-to-human transmission of coronavirus over the event windows. However, the cumulative average abnormal returns (CAARs) started to recover when stimulus packages were introduced, and the lockdown measures were eased, allowing businesses to reopen. This study also finds that only firms in the health-care sector reported significant positive CAARs. Stock returns of the utilities and telecommunication firms showed no changes, while eight other sectors fell remarkably. The results also show that the COVID-19 number of confirmed cases adversely affects firms’ abnormal returns. Practical implications This study suggests that stock prices incorporate bad and good news surrounding the announcements of major international and local events related to the COVID-19 pandemic. Thus, investors should consider such factors in making investment decisions. Originality/value To the best of the authors’ knowledge, this paper is one of the early research works investigating the stock market reactions to the COVID-19 major announcements (MCO, human-to-human transmission and ease of restrictions on economic activities) using an event study methodology in an emerging market, namely, Malaysia. This study is timely in light of the recently increasing calls for researchers to analyse the potential economic impacts of COVID-19 on global capital markets, especially in emerging markets whose evidence is scarce.

Most of the researchers analyzed the impact of ownership structure on dividends and capital structure decisions separately. Drawing upon preceding empirical studies, the interdependence between dividends and capital structure raises the potential of the endogeneity bias when interdependent factors are segmented. Therefore, this study examined the effect of corporate ownership structure on capital structure and dividend policy simultaneously. This study utilized 407 Malaysian-listed firms over the period from 2012 to 2016 and adopted simultaneous modelling using 2SLS and 3SLS regression techniques. The results changed markedly in sign, magnitude and significance when moving from OLS estimator to 2SLS and 3SLS estimators. The findings show that both dividend and capital structure policies have positive interdependence. The substantial, family, government and foreign ownership affect dividends positively and capital structure negatively. The study provides various theoretical and practical implications to improve corporate governance and corporate financial policies. This study contributes to the growing literature on corporate finance and corporate ownership. Particularly, it provides simultaneous investigation on the effect of family, government and foreign ownership on dividends and capital structure for Malaysian firms.