Abstract:

This study examined how efficiently companies operating in Borsa Istanbul during the COVID-19 epidemic were priced and the financial effects of the epidemic on different sectors were also tested the validity of the overreaction hypothesis. In the study that included all companies operating in Borsa Istanbul, the companies were divided into 10 percent divisions according to the performance of the stock price and the test method compared the characteristics of the companies in different divisions and the performance of different variables. Companies with lower market value, public market value, market value/register value ratio and foreign investor ratio have seen more negative prices during the COVID-19 epidemic. In terms of the sector, the aviation, transport logistics, tourism, leather clothing and marketing sectors are the sectors that are the worst affected by the COVID-19 epidemic as both share price performance and financial performance. It appears that the companies with the lowest price performance in the period of spread of the bullying have the highest price performance in the subsequent period, which supports the hypothesis of excessive reaction.

Keywords:

Abstract:

In this study, during the COVID-19 pandemic, the efficiency of the market pricing of companies operating in Borsa Istanbul and the financial effects of the pandemic on different sectors were investigated, and the validity of the overreaction hypothesis was tested. In the study in which all companies operating in Borsa Istanbul were included, companies were separated by 10% quantiles according to their stock price performance, and the characteristics of companies in different quantiles and performances of different variables were compared with the t-test method. According to the findings, companies with smaller market capitalization, publicly traded market value, market value/book value, and foreign investor ratio have seen more negative pricing during the COVID-19 pandemic. When viewed from a sectoral perspective, it is seen that airlines, transportation logistics, tourism, leather clothing, and marketing sectors are the worst affected by the COVID-19 pandemic, both in terms of share price performance and financial performance. It is observed that the companies with the lowest price performance in the period during the spread of the pandemic, had the highest price performance in the following period. This is supporting the overreaction hypothesis.