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Original Article

Ekonomik Yaklasim. 2019; 30(112): 19-43

Impact of Regulatory Sanctions on Stok Prices: Evidence from Turkey

Saim KILIÇ, İhsan Uğur DELİKANLI, Ali ALP.

Cited by 0 Articles

In this study, the impact of regulatory sanction announcements by the Capital Markets Board (CMB) for the companies listed on Borsa İstanbul, their executives or investors holding shares on stock prices has been examined. It was also investigated whether it makes any difference according to (i) the index and the market in which the stock is traded, (ii) to whom the sanction was applied, and (iii) the type of sanction. For these purposes, in the period of March 2016 - March 2019, 42 sanction announcement cases by CMB were taken into consideration in the study and analyzed with the Case Study method. According to the results of the study; first, it has been found that the announcements of CMB’s sanctions have no a statistically significant impact on stock prices, in general. Second, no significant difference has been observed between the impact of criminal sanctions and of administrative sanctions on stock prices. Third, it has been observed that the index or market in which the stock is traded does not make a statistically significant difference in terms of the impact. Fourth, there was a weak evidence that the sanctions imposed directly on companies and/ or their managers had a statistically significant negative impact over the four-day time window. To sum up, it has been concluded that the Turkish capital market generally does not react to the CMB’s sanctions, but it rarely considers the sanctions imposed directly on the company and/or the executives of the company.

Key words: Regulatory sanctions, Capital Markets Board’s sanctions, Regulatory announcements, Abnormal return, Event study. JEL Codes: G14, G19.

Article Language: EnglishTurkish

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