Session on Event Study Methodology
The Harmoney Club, consisting of MBA Finance Specialization students and faculties, recently organized an informative session focused on the Event Study Methodology. An event study is an empirical analysis that assesses the impact of a significant catalyst or contingent event on the value of a security, such as a company's stock. It serves as a valuable tool for examining the effects of events on individual securities, industries, sectors, or even the overall market, by observing the changes in supply and demand. By conducting event studies, researchers gain valuable insights into how securities are likely to respond to specific events. The session conducted by the Harmoney Club aimed to provide students with a comprehensive understanding of the Event Study Methodology. To facilitate this, the students were trained in conducting event studies using Microsoft Excel, a widely utilized tool in the finance industry. This hands-on training enabled the students to gain practical knowledge and appreciate both the Behavioural and Traditional schools of thought in stock market analysis. Traditional finance and behavioral finance are two different schools of thought in finance. Traditional finance assumes that investors are rational and make decisions based on all available information. Behavioral finance, on the other hand, acknowledges that investors are often irrational and make decisions based on emotions, biases, and heuristics.. Additionally, the workshop aimed to enhance the students' research acumen, an essential skill for their future master's theses.
The session primarily focused on analyzing the stock market crash of Adani Enterprises that occurred in February. The event study methodology was employed to examine the impact of the Hindenburg report on the company's share prices. Through the analysis, it was concluded that the market took at least 5 days to absorb and reflect this information in the share prices. This provided the students with a real-world example of how events can influence security prices and reinforced their understanding of the event study methodology. The workshop was not limited to MBA Finance students alone; students from the Business Analytics specialization also participated. This inclusive approach allowed for cross-disciplinary learning and fostered a collaborative environment where students could exchange ideas and perspectives. The event study methodology was highlighted as a valuable tool for the students, particularly in the context of their master's theses, as it enables them to measure the impact of news or events on security prices.
The workshop was expertly conducted by Prof. Shrutika Mishra, who guided the students on effectively utilizing the event study analysis tool. The faculties from the finance department, including Prof. Danish Hussain, Prof. Mohit Boralkar, and Prof. Maaz Khan, also played an instrumental role in creating an interactive learning environment. Students were encouraged to ask questions and engage in discussions, allowing for a deeper understanding of the subject matter. Overall, the Harmoney Club successfully organized a workshop on the Event Study Methodology, which proved to be an enriching experience for the MBA Finance and Business Analytics students. The training provided them with a valuable skillset for conducting empirical analysis and analysing the impact of events on security prices. With the guidance of the dedicated faculties, the workshop fostered a vibrant learning environment that encouraged student participation and facilitated the development of research acumen.
OUTCOMES OF THE EVENT
Outcome 1: Students were equipped with new skills and techniques of the Event Study methodology which will be useful for the students who want to conduct research on the stock market.
Outcome 2: Students gained in depth knowledge about both traditional and behavioural school of finance.