Nanaj, Aleksandros

2020-06-16T00:00:35Z

https://repository.ihu.edu.gr//xmlui/handle/11544/29599

Huawei

masterThesis

free

School of Science and Technology, MSc in Energy Management

This dissertation was written as a part of the MSc in Energy & Finance at the International Hellenic University. Tweets of President Donald Trump are related to his mood and sentiment on time, affecting market expectations, just like the one announcing to the public the effective ban of Huawei from selling in the United States market and acquiring technology from American corporations. The purpose of this study is to investigate the impact of baring Huawei from the American market in the American technology sector, with a specific focus on the 21 suppliers of the Chinese tech giant, utilizing event study methodology and daily data to test for significant effect from the actions taken against Huawei on 15 of May 2019. Results support the hypothesis of a clear exogenous event with the market fully unaware of the intuitions before it, followed with negative abnormal returns in the short term and linear relationship between exposed individual firm revenues and price return. Aggregating the abnormal returns and examining the cumulative abnormal return, results indicate a strong negative market reaction for several days. Whereas the day ceasing the effective ban, the most exposed suppliers in real monetary values, suffered from significantly negative abnormal returns. Lastly, an abnormal volatility study proves an explosion in risk the day following the event. This is important to investors and market participants since an unexpected political and economic event may have severe effects, while one may put the episode in the series of Sino-American trade war actions. Aleksandros Nanaj December 2019 This dissertation was written as a part of the MSc in Energy & Finance at the International Hellenic University. Tweets of President Donald Trump are related to his mood and sentiment on time, affecting market expectations, just like the one announcing to the public the effective ban of Huawei from selling in the United States market and acquiring technology from American corporations. The purpose of this study is to investigate the impact of baring Huawei from the American market in the American technology sector, with a specific focus on the 21 suppliers of the Chinese tech giant, utilizing event study methodology and daily data to test for significant effect from the actions taken against Huawei on 15 of May 2019. Results support the hypothesis of a clear exogenous event with the market fully unaware of the intuitions before it, followed with negative abnormal returns in the short term and linear relationship between exposed individual firm revenues and price return. Aggregating the abnormal returns and examining the cumulative abnormal return, results indicate a strong negative market reaction for several days. Whereas the day ceasing the effective ban, the most exposed suppliers in real monetary values, suffered from significantly negative abnormal returns. Lastly, an abnormal volatility study proves an explosion in risk the day following the event. This is important to investors and market participants since an unexpected political and economic event may have severe effects, while one may put the episode in the series of Sino-American trade war actions. Aleksandros Nanaj December 2019

Christopoulou, Reveka

ihu