IMPACT OF INTERNATIONAL MONETARY FUND BAILOUTS ON PAKISTAN STOCK EXCHANGE: AN EVENT STUDY

Syed Irtaza Hussain , Zain Ullah , Shah Khalid , Abdul waheed khan
  • Syed Irtaza Hussain MS Scholar, City University Peshawar
  • Zain Ullah Lecturer, City University Peshawar,
  • Shah Khalid MS Scholar, City University Peshawar,
  • Abdul Waheed Khan Senior Auditor, Accounts general office Peshawar,

Abstract

This study is to light the impact of the International Monetary Fund bailouts/ lending packages on Pakistan stock exchange because Pakistan's economy is having under influence of the International Monetary Fund by various packages with its terms and conditions. Therefore, it is essential to study the behavior of indices of Pakistan stock exchange upon the announcement of lending packages. To find the stock market behavior author uses five recent lending package in the last 20 years i.e. from 2000 to 2019 on all indices of Pakistan stock exchange. The event study methodology is employed through the mean adjusted model for the conduction of the study. Results suggested that there is a significant behavior of the stock market indices of Pakistan stock exchange. The positively significant impact of bailouts is recorded on event day, whereas, entire event windows were found to be negatively significant because there are positive and negative impacts recorded before and after the event date. Moreover, the post-event windows were found to be negatively significant for all of the events and indices. As results show that investor behaves abnormally upon announcement of the International Monetary Fund lending package.

Key Words: IMF bailout, Stock Exchange, Event Study

Published
2020-09-11
How to Cite
[1]
S. Hussain, Z. Ullah, S. Khalid, and A. Khan, “IMPACT OF INTERNATIONAL MONETARY FUND BAILOUTS ON PAKISTAN STOCK EXCHANGE: AN EVENT STUDY”, jmr, vol. 5, no. 1, pp. 14-41, Sep. 2020.