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This thesis uses a sample of 41 financial institutions to explore the impact of the announcement of the Central Bank on raising interest rates by 0.25% on March 17 , 2022 and by 0.125% on June 16,2022 , on the stock prices of financial institutions. The empirical results of this thesis are described as follows:
On March 17 , 2022,the Central Bank announced an interest rate hike of 0.25% , which is generally considered good news for financial institutions by investors. Therefore,the stocks of all financial institution samples , financial holding company subsamples,bank subsamples,and insurance company subsamples have significantly positive abnormal returns during the announcement period. The stock price response of bank sub-samples was the strongest to the announcement of a 0.25% interest rate hike. However , the announcement by the Central Bank to raise the interest rate by 0.25% is bad news for the securities and futures industry. Hence the subsample of securities and futures had negative abnormal returns during the announcement period. Furthermore , compared with the announcement of interest increase on March 17,2022,the Central Bank’s announcement of interest increase on June 16 , 2022 had a smaller positive affect on the stock prices of all financial institution samples,financial holding company subsamples,bank subsamples,and insurance company subsamples,and had a smaller negative affect on the stock prices of the securities and futures subsample.
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