The Impact of The COVID-19 Vaccine Validation Announcement by WHO on Abnormal Return: Event Study of the Composite Stock Indices in the Asia-Pacific Region Fulka Ilmy Avicenna Ralinas (a*), Intan Nurul Awwaliyah (b), Marmono Singgih (c)
a) Faculty of Economics and Business, Universitas Jember
Jl. Kalimantan Tegalboto 37, Jember 68121, Indonesia
*Fulkaralinas[at]gmail.com
b) Faculty of Economics and Business, Universitas Jember
Jl. Kalimantan Tegalboto 37, Jember 68121, Indonesia
in.awwaliyah.feb[at]unej.ac.id
c) Faculty of Economics and Business, Universitas Jember
Jl. Kalimantan Tegalboto 37, Jember 68121, Indonesia
marmono.singgih[at]unej.ac.id
Abstract
With a sample of 14 stock market indices of the developed and emerging markets in the Asia-Pacific Region, this paper aims to examine the impacts of the Covid-19 Vaccine Usage Validation Announcement by the World Health Organization on the stock markets in the Asia-Pacific region. Previous study concludes that the 2019-nCoV outbreak hit stock markets in Asia regions the hardest. Preceding studies have also supported that stock market returns can be impacted by macroeconomic news and firm-specific news. This study provides evidence of how stock markets in the Asia-Pacific region reacted to the awaited news during the pandemic, which was about the Covid-19 Vaccine. Using the OLS Market Model, this study calculates stock returns through abnormal return, average abnormal return, and the cumulative average abnormal return across 14 stock markets in the Asia-Pacific region. This study evidences several significant abnormal returns around the announcement date. This study concludes that the Covid-19 vaccine usage validation announcement by the World Health Organization has significantly impacted the cumulative average abnormal return around the Covid-19 vaccine validation announcement. These results highlight the importance of such events for investors towards their investment decisions and for the policymakers to be aware of the potential impact that such announcements can have on stock markets.
