Market Reactions on Corporate Actions in Growing and Nongrowing Energy Consuming Companies

Andini Nurwulandari, Hasanudin Hasanudin and Melati Melati
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Andini Nurwulandari: Nasional University, Jakarta, Indonesia
Hasanudin Hasanudin: Nasional University, Jakarta, Indonesia
Melati Melati: Nasional University, Jakarta, Indonesia

International Journal of Energy Economics and Policy, 2021, vol. 11, issue 3, 290-295

Abstract: This paper aims to analyze the market reactions on corporate actions in the form of split-up, reverse split, right issue, and mergers and acquisitions in growing and non-growing energy consuming companies in Indonesia. The market reaction is analyzed based on stock price, trading volume, and abnormal returns movements using paired sample t-tests from the results of the event study for five days before and after corporate actions in the form of split-up, reverse split, right issue, and mergers and acquisitions. The results showed that stock prices reacted positively on the split-up in growing energy consuming companies, while in non-growing energy consuming companies, stock prices did not react significantly. However, the abnormal returns of growing and non-growing energy consuming companies both showed a negative movement, while the trading volumes did not react significantly. This paper specifically analyzes the market reaction on corporate actions in growing and non-growing energy consuming companies to provide interesting insights about the different reactions given by the market to corporate actions carried out by the companies with different growth categories.

Keywords: Market reaction; corporate action; split-up; reverse split; right issue; merger and acquisition (search for similar items in EconPapers)
JEL-codes: D81 P48 Q35 Q42 (search for similar items in EconPapers)
Date: 2021
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