Investigating the Effects of Natural Disasters on the Stock Market on a Sectoral Basis: The Case of 2023 Kahramanmaraş/Türkiye Earthquake

Abstract

The aim of this study is to examine the effects of two earthquakes in Kahramanmaraş/Türkiye on February 06, 2023 on Borsa Istanbul (BIST) stock markets on a sectoral basis. In this context, it is investigated whether there is a statistically significant difference between sectoral stock returns before and after the earthquake. In the study, 18 BIST sectoral index returns are divided into two sub-samples as pre-earthquake and post-earthquake and analyzed by event study method. For this purpose, Paired Samples t-Test, a parametric test, and Wilcoxon Signed Rank Test, which is the non-parametric equivalent of this test, are used. According to the results of the research, no statistically significant difference was found between the pre-earthquake and post-earthquake returns of BIST sector indices. The findings show that, in case of investing in BIST sectoral indices, abnormal returns cannot be obtained depending on the earthquake event. Accordingly, it can be stated that BIST sectoral indices are an efficient market in semi-strong form.