Easter attack 2019 and Hotel and Travel sector in Sri Lanka: An event study approach

Abstract

In this paper, the impact of the Easter Sunday Attack on the Hotel and Travel Sector in Sri Lanka has been investigated by using the Event Study Methodology following the Efficient Market Hypothesis (EMH). The Market Model is used in analyzing the Abnormal Returns of stocks by using daily stock prices on thirty-three (33) companies belong to Hotel and Travel Sector in CSE and for the Market Return data, daily ASPI is considered. This empirical study's major objective is to measure and quantify the effects of the Easter Sunday attack on the Hotel and Travel Sector with the Market Efficiency by using Graphical presentation of Average Abnormal Return and Cumulative Average Abnormal Return and t - Statistics Analysis. Consistent with the observed findings, the market has been identified as an efficient and negatively responded market regarding Easter Sunday Attack's event since the quick drop on the event day. Practically, the investors of Hotel and Travel Sector Companies will be able to trade securities in a market where the possibility of beating was eliminated.