Stock market impact of visual and verbal clues from bank CEO interviews on CNBC during financial crisis

• Main Authors: Fam, Suen Li, Liew, Siqi, Goh, Hui Min
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business
• Online Access: http://hdl.handle.net/10356/51561
• Institution: Nanyang Technological University

This paper investigates how media exposure of CEO via CNBC interviews affects investors’ response and trading behavior during the 08/09 financial crisis period. It had been proven that media coverage is endogenous, and hence we assume that CEOs bears specific intentions for their media appearance. When the financial markets are suffering and panicking during the crisis, one of the intentions of CEO interviews would be to reduce investors’ uncertainty, thereby increasing the company’s stock price and reducing price volatility (perceived risk level). In our report, we seek to investigate which aspects of a CEO interview correlate with the stock price and volatility of the company via a short run event study surrounding the interview day. In this event study, we captured interview transcripts, characteristics of CEOs and hosts, interview details, and stock price behaviour over the event. Some firm and CEO characteristics were also collected, as they served as control variables. The results show that various interview characteristics had a relationship on stock price movement and price volatility on different trading day interval. The characteristics’ varying degrees of impact were also examined and compared.