Abstract:
The main purpose of this was to investigate the effect of credit rating on listed insurance company of Pakistan stock exchange during the period of 2010-2017. This investigation is made to explore the role played by the credit rating by analyzing the link between announcement of credit ratings and efficiency of Pakistan Stock exchange. For this investigation event study is used with the sample of 8 years from 2010-2017 of Pakistan stock exchange index, stock price and credit ratings announced by (PACRA) Pakistan credit rating agency limited. Event window of 21days, (-10, 0, +10) is used along with ttest is used to check the significance and insignificance. The result of this study shows that there is no effect of credit rating on insurance companies of Pakistan. This empirical study has insignificant effect of credit rating on stock return of insurance sector listed at Pakistan stock exchange. Form the result this study goes with null hypothesis that there is no effect of credit rating on stock return of listed insurance company.
