The impact of financial sector merger on shareholder return / Nurul Aini Mohd Hatta

This study focus on the reaction of abnormal return to the announcement of merger and acquisition of acquired firm especially for companies and bank that involve in financial industry. The objective of this study is to determine the impact of abnormal return before and after merger announcement. This study will using 30 companies and bank which is listed in Bursa Malaysia and involve in merger and acquisition. Time horizon is during 1998 until 2003 which is 6 years. The sample data are the 220 daily stock prices before and 100 daily stock price after merger announcement. This study using Event Study Method to examine the stock price reaction to the announcement of merger. This method determine the abnormal return and statistical test are using to test for their significant. For their significant this study using Paired Sample T-test. There are some previous researchers have concludes that there are positive abnormal return that earn by acquired firm before and after merger announcement. There are also some of them says oppositely which is negative effect.