Effects of 2011 Southeast Asia flood on agriculture stocks in Thailand, Malaysia and The United States

• Main Author: Tang, Yoke Man
• Format: Final Year Project Report
• Language: English; English
• Published: Universiti Malaysia Sarawak, (UNIMAS) 2015
• Subjects: S Agriculture (General)
• Online Access: http://ir.unimas.my/id/eprint/12311/1/Effects%20of%202011%20Southeast%20Asia%20flood%20on%20agriculture%20stocks%20in%20Thailand%2C%20Malaysia%20and%20The%20United%20States%20%2824pgs%29.pdf; http://ir.unimas.my/id/eprint/12311/8/Tang%20Yoke%20Man.pdf; http://ir.unimas.my/id/eprint/12311/

The main objective for this study is to deliberate the effects of natural disasters on the sources of food by studying on the impacts of 2011 Southeast Asian Flood on agriculture stocks in Thailand, Malaysia and the United States. 2011 Southeast Asian Flood that started in Thailand is the recent most serious tragedy and it had become the headlights in whole world. Thailand has always been in close relationship with Malaysia and so as United States of America. Event study methodology is applied to examine whether floods do significantly affect the performance of agriculture stocks in the selected countries. The results found that agriculture stocks in Thailand, Malaysia and the United States are not significantly affected by the negative event. The results also indicated that the stock markets in all the countries are considered efficient as significant negative abnormal returns are absent. However, stock market in the United State is the most efficient while stock market in Thailand is the least efficient when comes into comparison. Anyhow, it is good to include agriculture stocks in the portfolio for diversification purpose. The companies in agribusiness should be getting involved in other kinds of business to offset damages. The limitation is the small sample size and abnormal returns are observed from sample companies only in food industry to reflect the performance of agriculture sector which decrease the accuracy of results. A longer event period and estimation period are recommended for getting a more reliable and clear result.