Stocks’ prices manipulation around national elections?

Abstract

Purpose The purpose of this paper is to examine the influence of major non-economic events such as the results of five Greek national Parliamentary elections during 1996-2009 on the Greek banks’ stocks. Design/methodology/approach Using daily data from the Athens Stock Exchange, event study methodology and market model, the results of this paper claim that the five Greek national Parliamentary elections during the 1996-2009 period had no statistically significant effect on the Greek banks’ stocks. The results show that cumulative average abnormal returns (CAARs) were slightly positive or negative for Greek banks’ stocks but not statistically significant at 5 and 10 per cent confidence levels. Findings Investors were not surprised and the political information caused no change and no influence on the future and course of the stock market. Expected winning political party was the same as the actual winning political party. Results showed that during pre-event period of 2000 and 2004 Greek national Parliamentary elections, CAARs for Greek banks’ stocks were slightly positive and after the event period were slightly negative but not statistically significant at all periods. During 2007 Greek national Parliamentary elections, the effect of elections changed because CAARs were generally slightly negative during the pre-event period and positive after the event period. Also, non-statistically significant CAARs indicate that there is no evidence that either political party was able to manipulate bank stocks’ prices for election purposes. Originality/value The main contribution of this paper is to provide evidence about effects of national elections to bank stocks’ prices which have important implications for stockbrokers, investors, politicians and political analysts.

Do firms harvest from political connections during general elections? Case of Pakistan

“…A wide range of studies (Bialkowski et al , 2008; Iyengar et al , 2017; Liew and Rowland, 2016; Sajid Nazir et al , 2014; Repousis, 2016) highlighted the effect of elections on stock price returns of firms.…”

“…Repousis (2016) used event study methodology to investigate Greece stocks behavior around the parliamentary election and found an insignificant effect on stock returns. Ahmed (2017) and Sajid Nazir et al (2014) found a significant effect of political events on stock market performance.…”

“…It is learned that stock prices show more volatility on specific event day as compare to other days. In general, it is found that general elections have a significant impact on stock returns (Ahmed, 2017; Khan et al , 2016; Masood and Sergi, 2008; Murtaza et al , 2015; Repousis, 2016). National elections have been a crucial event in the context of stock market performance in various countries, e.g.…”

Reaksi Pasar Modal Atas Kenaikan The Federal Funds Rate Pada Tanggal 26 September 2018

“…Kenaikan FFR pada tanggal 26 September 2018 yang telah diprediksi dengan baik oleh pasar menyebabkan peristiwa tersebut tidak lagi relevan sebagai dasar pengambilan keputusan investasi pada periode peristiwa yang dibuktikan dengan tidak adanya signifikansi average abnormal return di sekitar periode peristiwa. Hasil ini didukung oleh beberapa penelitian terdahulu diantaranya Prameswari & Wirakusuma (2018), Cahyaningdyah & Cahyasani (2017), Yuniarthi (2016), Repousis (2016), serta (Lucia et. al.…”

Assessing four decades of global research studies on stock market manipulations: a sceintometric analysis

“…Affuso and Lahtinen (2019), Cwynar et al (2019), Rosati et al (2019), Strauss and Smith (2019), Teti et al (2019). While searching for bibliographic records, the stock price manipulation appears to be dealt with various facets in the market such as trading frequency (Viljoen et al , 2015), trading volume (Huang and Cheng, 2015; Adams et al , 2018), the magnitude of stock price volatility (Punniyamoorthy and Thoppan, 2013; Zhai et al , 2018; Griffith et al , 2019), abnormal returns; order size (Jiang et al , 2013; Huang and Cheng, 2015; Repousis, 2016; Shi et al , 2018), Bid-Ask Spread (Hillion and Suominen, 2004; Aitken et al , 2005; Wang and Zhou, 2014; Chan et al , 2018) and also the closing prices (Kadioglu et al , 2015; Saputra and Prijadi, 2017; Cordi et al , 2018; Davies, 2018).…”