As a first-ever of cancelling the whole session’s trades and returns of listed banks

ABSTRACT

We examine the effect of the Capital Market Authority’s decision to cancel an entire day’s trades on the returns of listed banks. To investigate the impact of this event, we use the event-study method and apply it over a defined period. Our results provide evidence of a significant negative effect from the cancellation of a day’s trading on banks’ returns over the examined period. However, further analysis indicates that this effect turned insignificant once additional announcements that found favour with investors were made. These findings confirm the harmful cost of cancellation decision that first-ever happened in the financial markets.

KEYWORDS:

• Trading cancellation
• stock returns
• event study
• listed banks
• central bank

JEL CLASSIFICATION:

• G10
• G20
• G30

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ The Premier Market includes companies that tend to be larger in terms of market capitalization and have greater liquidity (see https://www.boursakuwait.com.kw/api/documents/boursa/1640858950911.pdf chap. 8).

² Available at https://www.cma.gov.kw/en/web/cma/cma-board-releases/-/cmaboardreleases/detail/1009868