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| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | Hong Kong protests 2019 - Impacts on different industry sectors in the financial market based on an event study |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 51 |
| Date | 2020 |
| Zusammenfassung | The anti-extradition bill protests in 2019 are challenging both the politics and the economy in Hong Kong. Official statistics have shown that Hong Kong has slipped into recession after the start of the protests. The stock market, as a fundamental element of the economy, could not stay unscathed as well. Using stock returns as an economic indicator, this study aims to examine the impacts of three selected protest-related events on different industries in Hong Kong based on an event study. The study takes constituent stocks of industry sub-indices of the Hang Seng Composite Index (HSCI) as sample. First, the constituents’ daily abnormal returns in the event windows are estimated using the market model. Then, the aggregated abnormal returns are tested for significance using the generalized rank (GRANK) test. Findings from the estimated industry-level cumulative averaged abnormal returns (CAAR) suggest that the events have a↵ected the industries to different extents. While the escalation of the protests in June 2019 caused negative CAARs in all industries, the Yuen Long attack and the announcement of the withdrawal of the bill have impacted the industries differently. Overall, the properties & construction industry and the telecommunications industry generated lower CAARs than other industries in two of three event windows. Contrary to expectations, the consumer discretionary industry was not substantially influenced by any of the events mentioned. Results of the GRANK tests suggest that the industry-level abnormal returns in the event windows are insignificant. Hence, no statistical evidence can be provided that the protests have significantly imposed e↵ects on the stock market, which indicates that investors have anticipated that the protests will not harm the value and profitability of HSCI constituents and Hong Kong’s prestige as a financial center will remain. This study aims to contribute to the literature on understanding the impacts of protests on stock market performance. Identifying industries which are negatively a↵ected by the social incidents could support investors, companies and authorities in their relevant decision-makings, as events of this kind are likely to reoccur in the future. |
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