ASEAN stock market reaction on the issuance of green bonds

• Main Authors: Agarao, Margaret L., Ebeo, Gabriel Kean T., Jimenea, Richard Allen A., Jr., Yason, Victoria Elizabeth P.
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Sustainable development—Southeast Asia; Stock exchanges—Southeast Asia; Accounting; Corporate Finance; Environmental Studies; International Business; Management Sciences and Quantitative Methods
• Online Access: https://animorepository.dlsu.edu.ph/etdb_acc/32; https://animorepository.dlsu.edu.ph/cgi/viewcontent.cgi?article=1051&context=etdb_acc
• Institution: De La Salle University

Climate change and environmental issues have been continuously arising throughout the years and because of this organizations have been incorporating more sustainable practices into their decisions and strategies. One of the activities done by companies to contribute to this and their firm’s sustainable development is through the issuance of green bonds. With the growing demand for green investment opportunities, the primary objective of the study was to determine if the issuance of green bonds and their announcement affected the stock performance of publicly-listed companies in the ASEAN region. The study focused on the five issuers from the region, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. The companies also belonged to five sectors: diversified, finance, industrial services, real estate, and utility. Furthermore, this was assessed through an event study methodology with the announcement and issuance dates as the events of interest. This was examined by testing the cumulative average abnormal returns in the duration of the event windows identified. The significance testing on the ASEAN as a whole showed no effect on the stock performance of the companies. However, on a per-country and per-industry level, favorable stock market reactions were found for the Philippines, Singapore, and the real estate sector.