publication . Article . 2009

The Effect of Merger and Acquisition Announcements on Stock Price Behaviour and Financial Performance Changes: A Case of Banks in Malaysia

Harjito, D. Agus; Sulong, Zunaidah;
Open Access English
  • Published: 12 May 2009
  • Publisher: Universitas Islam Indonesia
Abstract
This study attempts to examine the effect of mergers and acquisitions completion announcements on the stock price behavior for two anchor banks; Hong Leong Bank Berhad and Arab Malaysian Bank Berhad. The analysis uses the event study technique, the Naïve Model, a model that is based on Market Model with constrained  = 0 and  = 1 to compute the abnormal returns surrounding the mergers and acquisitions completion announcement date; also to evaluate the effect of mergers and acquisitions completion announcement on the banks’ return. This study also analyses the financial performance changes to provide a naïve analytical framework by using financial ratios for the...
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