Impact of M&A announcement on stock price in Viet Nam banking industry during 2011-2015
Abstract
From 2011 to 2015, the State Bank of Vietnam set up the project to restructure the credit institutions system. It has led to numerous mergers and acquisitions cases in the banking sector of Vietnam during this period. The main purpose of this research is to observe the stock price of the merged banks around the time officially signing the M&A contract. The event study methodology is used to test the stock price of four merged banks in 10 days before and 10 days after the M&A announcement. The findings prove the slow but positive reaction of the stock market to this information. Basing on the information of the banks and the restructuring project, we also try to explain the reaction of the stock market. The limitation of this study is the small sample. Therefore, the only suggestion for latter studies is that they should enlarge the sample by extending the testing period or increasing the number of industry included.