scholarly journals The Effect of Oil Price on Stock Market Returns with Moderating Effect of Foreign Direct Investment & Foreign Portfolio Investment: Evidence from Pakistan Stock Market

2019 ◽  
Vol 7 (2) ◽  
pp. 45-61 ◽  
Author(s):  
Muhammad Usman ◽  
Danish Ahmed Siddiqui
Keyword(s):  
Foreign Direct Investment ◽  
Stock Market ◽  
Direct Investment ◽  
Moderating Effect ◽  
Oil Price ◽  
Portfolio Investment ◽  
Market Returns ◽  
Stock Market Returns ◽  
Foreign Portfolio Investment

scholarly journals Effects of Selected Macroeconomic Variables on Stock Market Returns in Nigeria

2020 ◽  
pp. 56-70
Author(s):  
Adeleke Gabriel Aremo ◽  
Olabode Eric Olabisi ◽  
Oyinlola O. Adeboye
Keyword(s):  
Foreign Direct Investment ◽  
Stock Market ◽  
Direct Investment ◽  
Trade Openness ◽  
Series Data ◽  
Market Returns ◽  
Stock Market Returns ◽  
Macroeconomic Variables ◽  
Long Run ◽  
Foreign Direct Investment Inflows

The paper empirically examines the effects of selected macroeconomic variables on stock market returns in Nigeria within the period 1985 and 2014 with a view to determining the macro-factors determining stock market returns in Nigeria. The Autoregressive Distributed Lag (ARDL) approach was employed to examine both the short and long-run effects of selected macroeconomic variables on stock market returns using annual time series data spanning 1985 to 2014. The findings show that both foreign direct investment inflows and external debt do not have significant impact on stock market returns in Nigeria while money supply and trade openness have significant positive effect on stock market returns in the long-run. The annual speed of adjustment towards equilibrium is 91 per cent.  The causality results show two-way causality between the nominal stock market returns and foreign direct investment inflows, while one-way causality runs from nominal stock market returns to trade openness.

Relationship between Foreign Portfolio Investments (FPI), Domestic Institutional Investors, and Stock Market Returns in India

GIS Business ◽  
2017 ◽  
Vol 12 (6) ◽  
pp. 1-9
Author(s):  
Dhananjaya Kadanda ◽  
Krishna Raj
Keyword(s):  
Stock Market ◽  
Institutional Investors ◽  
Negative Relationship ◽  
Trading Strategies ◽  
Market Returns ◽  
Stock Market Returns ◽  
Foreign Portfolio Investment ◽  
Stock Market Return ◽  
Indian Stock Market ◽  
Feedback Trading

The present article attempts to understand the relationship between foreign portfolio investment (FPI), domestic institutional investors (DIIs), and stock market returns in India using high frequency data. The study analyses the trading strategies of FPIs, DIIs and its impact on the stock market return. We found that the trading strategies of FIIs and DIIs differ in Indian stock market. While FIIs follow positive feedback trading strategy, DIIs pursue the strategy of negative feedback trading which was more pronounced during the crisis. Further, there is negative relationship between FPI flows and DII flows. The results indicate the importance of developing strong domestic institutional investors to counteract the destabilising nature FIIs, particularly during turbulent times.

scholarly journals An Empirical Investigation on Foreign Capital Inflows and Economic Development in Nigeria

2020 ◽  
pp. 63-76
Author(s):  
G. Tunde, Monogbe ◽  
J. Emeka, Okereke ◽  
P. Ebele, Ifionu
Keyword(s):  
Economic Development ◽  
Foreign Direct Investment ◽  
Capital Flows ◽  
Direct Investment ◽  
Foreign Capital ◽  
Capital Inflows ◽  
Portfolio Investment ◽  
Foreign Portfolio Investment ◽  
Foreign Capital Flows ◽  
Foreign Capital Inflows

In an attempt to attained sustainable level of economic development in a nation, empirical studies as well as financial theories posit that foreign capital inflows play a lead role. As such, this study set out to empirically investigate the extent to which foreign capital flows promotes economic development in Nigeria. Time series data between the periods 1986 to 2018 were sourced from the central bank of Nigeria statistical bulletin and world bank data based. The study proxied foreign capital flows using foreign direct investment, foreign portfolio investment, foreign aids and external borrowings which is decomposed into multilateral and bilateral loans while Human development index is used as proxy for economic development. The study further employed unit root test, co-integration test, error correction model and granger causality test to ascertain the direction of relationship. Findings reveal that of the five indices of foreign capital inflows, three (foreign  portfolio investment, foreign aids and bilateral loan) prove to be significant in promoting economic development in Nigeria, while foreign direct investment and multilateral loan are negatively  related to economic development in Nigeria. As such, the study conclude that foreign capital inflows in the form of foreign portfolio investment, foreign aids and bilateral loans are significant in boosting economic development in Nigeria. Therefore, we recommend that managers of the Nigerian economic should create an enabling financial environment as this will help in accelerating further inflows of portfolio investment and thus boost economic development in Nigeria.

Effects of the COVID-19 pandemic on stock market returns and volatilities: evidence from selected emerging economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bijoy Rakshit ◽  
Yadawananda Neog
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Emerging Economies ◽  
Market Performance ◽  
Exchange Rate Volatility ◽  
Oil Price ◽  
Market Returns ◽  
Stock Market Returns ◽  
Content Type ◽  
Stock Market Performance

Purpose The purpose of this paper is to investigate the effects of exchange rate volatility, oil price return and COVID-19 cases on the stock market returns and volatility for selected emerging market economies. Additionally, this study compares the market performance in the emerging economies during the COVID-19 pandemic with the pre-COVID and global financial crisis (GFC) period. Design/methodology/approach The authors apply the arbitrage pricing theory to model the risk-return relationship between the risk-based factors (exchange rate volatility and COVID-19 cases) and stock market returns. By applying the exponential generalized autoregressive conditional heteroskedasticity model, the study captures the asymmetric volatility spillover from the stock markets to foreign exchange markets and vice versa. Findings Findings reveal that exchange rate volatility exerts a negative and significant effect on the market returns in Brazil (BOVESPA), Chile (S&P CLX IPSA), India (SENSEX), Mexico (S&P BMV IPC) and Russia (MOEX) during the coronavirus pandemic. Regarding the effect of oil price returns, the authors find a positive relationship between oil price and stock market returns across all the economies in the study. The market returns of Russia, India, Brazil and Peru appeared more volatile during the pandemic than the GFC period. Practical implications As the exchange rate volatility is causing higher risk and uncertainty in the stock market’s performance, the central bank’s effort to maintain a stabilizing effect on the exchange rate sale can be proven crucial for the economies under consideration. Emphasized should also be given to boost investors’ confidence in the stock market, and for this, the government policy actions in reducing the transmission of the disease are the need of the hour. Originality/value While a large volume of literature on stock market performance in times of COVID-19 has emerged from developed economies, this study adds to the literature by exploring the emerging economies’ stock market performance during the COVID-19 pandemic. Unlike previous literature, this study examines the volatility spillover between stock and exchange rate markets in the worst affected emerging economies during the crisis.

scholarly journals The Global Financial Crisis, Inflation Rate And Stock Market Returns In Kenya

2017 ◽  
Vol 13 (19) ◽  
pp. 191
Author(s):  
Donald A. Otieno ◽  
Rose W. Ngugi ◽  
Nelson H. W. Wawire
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Regression Model ◽  
Inflation Rate ◽  
Global Financial Crisis ◽  
Moderating Effect ◽  
Market Returns ◽  
Stock Market Returns ◽  
Crisis Period ◽  
Product Term

The moderating effect of events such as the 2008 Global Financial Crisis (GFC) on the relation between stock market returns and macroeconomic variables has attracted very little attention. This study investigates the extent to which the 2008 GFC moderated the relationship between inflation rate and stock market returns. The study uses month-onmonth inflation rate and year-on-year inflation rate from 1st January 1993 to 31st December 2015 and divides the sample data into pre-crisis period (from 1st January 1993 to 31st December 2007); crisis period (from 1st January 2008 to 30th June 2009); and post-crisis period (from 1st July 2009 to 31st December 2015). It uses a product-term regression model instead of the most widely applied additive regression model. Results indicate that a unit increase in the both measures of inflation rate had significant depressing effects on stock market returns after the crisis compared to before the crisis. Likewise, the results reveal that average stock market returns were significantly higher after the crisis compared to before the crisis at low rather than medium or high values of the two measures of inflation rate. These results suggest that the Kenyan stock market is highly sensitive to variations in inflation rate, especially as it emerges from a financial or political turmoil. This study is empirically innovative in the sense that it is the first to examine the moderating effect of the 2008 GFC on the relation between inflation rate and stock market returns in Kenya using a product-term model.

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