The impact of international terrorist attacks on the risk and return of Malaysian equity portfolios

Date

2012

Authors

Ramiah, V.

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Journal article

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Review of Pacific Basin Financial Markets and Policies, 2012; 15(4, article no. 1250020):1250020-1250020

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Abstract

How are the risks and returns of industrial and market portfolios altered as a result of terrorist events? This paper investigates the effects of five international terrorist attacks on equities listed on the Malaysian Stock Exchange. It uses an event study methodology to explore the relationship between equity stock returns, terrorist attacks and asset pricing models to assess whether systematic risks change after these events. The evidence demonstrates that strategies such as closing down an exchange during a crisis are ineffective. Furthermore, after the September 11, 2001 attacks, Malaysian equity markets were insensitive to subsequent terrorist attacks in other countries.

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Link to a related website: http://pdfs.semanticscholar.org/8333/0f26f7b74dfb8a9a4db2a03498dd5bb7de55.pdf, Open Access via Unpaywall

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Copyright 2015 World Scientific Publishing Co.

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