IMPACT OF EXCHANGE RATE FLUCTUATIONS ON PHARMACEUTICAL INDUSTRIES STOCK PRICES IN INDIA

2016 ◽  
Vol 12 (1) ◽  
Author(s):  
Roshan Kumar ◽  
Dr. Manisha Gupta
Keyword(s):  
Exchange Rate ◽  
Pharmaceutical Industry ◽  
Stock Prices ◽  
Stock Price ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Domestic Currency ◽  
Pharmaceutical Sector ◽  
Pharmaceutical Industries ◽  
The Government

Exchange rate is parameter to measure the International competition between the different countries. It is also known as index of competitiveness of currency of any country and an inverse relationship between this index and competitiveness exists. An exchange rate has two important component, the domestic currency and a foreign currency and it can be represent by the directly or indirectly. In the first way the price of a unit foreign currency is represent in terms of the domestic currency. In indirect way, the price of a unit of domestic currency is representing in terms of the foreign currency. The foreign exchange market is the place where the currency of one country is exchanged for that another country where the rate of exchange is determined. The Indian pharmaceutical industry currently occupies the top position among science based industries. Indian pharma industry is organized sector and it has to be total market value of 4.5 US billion dollars. It growth rate is near about 8% to10% per annum. The Indian pharmaceutical sector is highly structured with Approx 20,000 units. It market capitalization is expected to grow to US$ 85 billion by the year 2020. The purpose of this paper is to investigate the exchange rate exposure of pharmaceutical Industry in india.For this stock price of selected companies (Yearly and exchange rate data) are taken from the government websites. The time periods are taken from 2003 to 2013. The result indicate that weaken rupee has significant positive relationship with pharmaceutical sector.

scholarly journals The Role of Exchange Rates in the Stock Price Development of Chemical Companies in the Visegrad Four Countries

2019 ◽  
Vol 22 (3) ◽  
pp. 117-129
Author(s):  
Jana Šimáková ◽  
Nikola Rusková
Keyword(s):  
Exchange Rate ◽  
Pharmaceutical Industry ◽  
Exchange Rates ◽  
Stock Prices ◽  
Stock Price ◽  
Stock Exchanges ◽  
The Exchange Rate ◽  
Chemical Companies ◽  
The Empirical Analysis

The aim of the paper is to evaluate the effect of exchange rates on the stock prices of companies in the chemical industry listed on the stock exchanges in the Visegrad Four countries. The empirical analysis was performed from September 2003 to June 2016 on companies from the petrochemical and pharmaceutical industry. The effect of the exchange rate on stock prices is analyzed using Jorion’s approach on monthly data. In contrast to the selected petrochemical companies, the pharmaceutical companies did not use any hedging instruments in the tested period. The effect of the exchange rate on the stock price was proved only in the case of companies from the pharmaceutical industry. This suggests that exchange rate risk could be eliminated by using hedging instruments.

scholarly journals Impact of Exchange Rate Volatility to Stocks’ Return in Indonesia: The Augmented Markov-Switching Egarch Approach

2020 ◽  
Vol 21 (2) ◽  
pp. 161-173
Author(s):  
Wasiaturrahma Wasiaturrahma ◽  
Dita Normalaksana Putri ◽  
Shochrul Rohmatul Ajija
Keyword(s):  
Exchange Rate ◽  
Stock Returns ◽  
Stock Prices ◽  
Stock Price ◽  
Foreign Exchange Market ◽  
Markov Switching ◽  
High Volatility ◽  
Volatility Regimes ◽  
The Exchange Rate ◽  
Exchange Rate Changes

The stock price is one indicator that represents the economic performance in a country. Changes in stock prices, including various factors, as an example, is the exchange rate changes as the representation from the foreign exchange market. The fluctuating exchange rate price also influences the volatility of the stock price. Furthermore, volatility has different high and low regime stages that will cause a disparate impact on the outcome of the relationship changes. This study aims to examine the presence of asymmetric volatility and its effects on the volatility of LQ45 stock returns, as well as the changes in exchange rates of Rupiah against USD from 1997 to 2017. Using the Augmented Markov Switching EGARCH  approach,  the  results  of  this  study  indicate  an  asymmetric  behavior  in  the  volatility  of LQ45 stock returns. High volatility regimes are more dependent and more unstable than low volatility regimes, and low volatility regimes dominate the duration compared to the high volatility regime. The good and bad news give different impact on LQ45 stock return volatility and exchange rate changes. Moreover, the unstable economies will respond faster than the stable economies in terms of facing the exchange rate changes.

MODELING THE INTERACTIONS OF STOCK PRICE AND EXCHANGE RATE IN MALAYSIA

2009 ◽  
Vol 54 (04) ◽  
pp. 605-619 ◽  
Author(s):  
MOHD TAHIR ISMAIL ◽  
ZAIDI BIN ISA
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Stock Prices ◽  
Stock Price ◽  
Price Index ◽  
Composite Index ◽  
Regime Shifts ◽  
Var Model ◽  
Vector Autoregressive ◽  
Stock Price Index

After the East Asian crisis in 1997, the issue of whether stock prices and exchange rates are related or not have received much attention. This is due to realization that during the crisis the countries affected saw turmoil in both their currencies and stock markets. This paper studies the non-linear interactions between stock price and exchange rate in Malaysia using a two regimes multivariate Markov switching vector autoregression (MS-VAR) model with regime shifts in both the mean and the variance. In the study, the Kuala Lumpur Composite Index (KLCI) and the exchange rates of Malaysia ringgit against four other countries namely the Singapore dollar, the Japanese yen, the British pound sterling and the Australian dollar between 1990 and 2005 are used. The empirical results show that all the series are not cointegrated but the MS-VAR model with two regimes manage to detect common regime shifts behavior in all the series. The estimated MS-VAR model reveals that as the stock price index falls the exchange rates depreciate and when the stock price index gains the exchange rates appreciate. In addition, the MS-VAR model fitted the data better than the linear vector autoregressive model (VAR).

scholarly journals HEDGING CURRENCY RISKS IN INTERNATIONAL BUSINESS USING THE OPPORTUNITIES OF THE INTERNATIONAL FOREIGN EXCHANGE MARKET

2021 ◽  
Author(s):  
Olena Liegostaieva
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
International Business ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Exchange Market ◽  
Currency Risk ◽  
Exchange Rate Fluctuations ◽  
Current Value ◽  
Financial Result

The article is devoted to the study of currency risk hedging in international business. The article notes that the international foreign exchange market is the largest and fastest growing of all world markets. The characteristic features of the international currency market are substantiated and offered. It is also noted that foreign exchange transactions provide economic ties between participants located on different sides of state borders: settlements between firms from different countries for the supply of goods and services, foreign investment, international tourism and business travel. It is determined that hedging of currency risks is the protection of funds from the unfavorable movement of exchange rates, and is carried out in fixing the current value of funds by concluding an agreement on the foreign exchange market. When hedging, the risk of exchange rate changes disappears, and this makes it possible to forecast the company's activities and see the financial result, which is not distorted by exchange rate fluctuations, which will allow you to determine product prices, calculate profits, etc. The main difference between hedging and other types of transactions is that its purpose is not to generate additional profits, but to reduce the risk of potential losses, as risk reduction is almost always necessary to pay, hedging, of course, involves additional costs. Hedging is a way to improve business planning. An enterprise wishing to use this service shall pledge the specified amount, from which losses on its positions will be deducted. In today's conditions, thanks to the foreign exchange market, there is a very reliable way to hedge currency risk. This method is to fix the current value of funds by concluding agreements in this market. With hedging, the company eliminates the risk of exchange rate fluctuations, and this allows you to forecast activities and see the financial result, which is not changed by exchange rate fluctuations. Allows you to pre-determine product prices, determine profits, etc. Thus, the principle of hedging in international business is to open a currency position in a foreign currency account for future transactions to convert funds.

Analisis Pengaruh Inflasi, Nilai Tukar Rupiah, dan BI-Rate terhadap Harga Indeks Saham Syariah Indonesia

2021 ◽  
Vol 4 (2) ◽  
pp. 47-56
Author(s):  
Fifi Afiyanti Tripuspitorini
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Stock Prices ◽  
Stock Price ◽  
Partial Least Square ◽  
Least Square ◽  
Stock Index ◽  
Macroeconomic Factors ◽  
Negative Effect ◽  
Monthly Period

Islamic investment is experiencing an upward trend from year to year. Many investors are starting to look at Islamic stocks. One of the Islamic stocks in Indonesia is the Indonesian Sharia Stock Index (ISSI). Investors must have many careful considerations to invest. One of the factors that may influence stock prices is macroeconomic factors. This study aims to determine how macroeconomic variables in the form of inflation, the rupiah exchange rate against the dollar, and Bank Indonesia interest rates can affect the ISSI stock price. This study uses a quantitative data approach. The data is obtained from the Sharia Stock Index (ISSI) in the monthly period January 2016 to December 2018.Meanwhile, data analysis used Partial Least Square (PLS) with the help of WarpPLS. The results showed that inflation and the rupiah exchange rate had no effect on the ISSI stock price. while the BI rate has a significant negative effect on the ISSI stock price.

scholarly journals A Time Series Analysis of the Nexus Between Macroeconomic Fundamentals and Stock Prices in Nigeria

2018 ◽  
Vol 13 (2) ◽  
pp. 69-91
Author(s):  
Amassoma Ditimi ◽  
Bolarinwa Ifeoluwa
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Stock Market ◽  
Time Series Analysis ◽  
Stock Prices ◽  
Macroeconomic Factors ◽  
Series Analysis ◽  
Integration Test ◽  
Macroeconomic Fundamentals ◽  
The Government

AbstractSince macroeconomic fundamentals have been found to play a vital role for changes in the economy of a country. Consequently, the onus is on the appropriate regulatory authorities to take measures in making amendments in these policies to put the economy on the right development track. The aim of this study is to use time series analysis to empirically showcase the nexus between macroeconomic fundamentals and stock prices in Nigeria. The method used for this study was the Co-integration test and the EGARCH technique to estimate the possible influence of the selected macroeconomic fundamentals on stock prices. Volatility was captured by using quarterly data and estimated using GARCH (1,1) respectively. The study found there is a positive relationship between macroeconomic factors and stock prices in Nigeria. Therefore, the study recommends that the Federal authority should put in place policy measures that will enable the exchange rate to be relatively stabilized. This is because empirical evidence from studies has shown that exchange rate affects stock market prices. In addition, the government authority should ensure an enabling environment that would build the mindset of institutional investors in the Nigerian stock market due to the existence of information asymmetry problems among potential investors.

Cosmetic changes will not save Venezuelan economy

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Domestic Currency ◽  
Economic Adjustment ◽  
Content Type ◽  
State Of The Economy ◽  
The Exchange Rate ◽  
The Government

Significance Venezuela’s economic adjustment, announced on August 17 by President Nicolas Maduro, has met with international scepticism. There is little confidence that the redenomination of the domestic currency will achieve intended aims of reducing hyperinflation or kick-starting economic reactivation. Impacts The government will be under pressure to explain the economic measures, specifically the pegging of the exchange rate to the petro. The exodus of Venezuelans will accelerate despite efforts by neighbouring countries to prevent the outflow. Maduro’s claim that US sanctions are to blame for the woeful state of the economy will maintain credibility among government supporters.

scholarly journals PENGARUH INFLASI, SUKU BUNGA DAN NILAI TUKAR RUPIAH TERHADAP HARGA SSAHAM PERUSAHAAN SEKTOR PROPERTI DAN REAL ESTATE YANG TERCATAT DI BURSA EFEK INDONESIA

2018 ◽  
Vol 6 (1) ◽  
Author(s):  
Fitri Ramadani
Keyword(s):  
Exchange Rate ◽  
Data Analysis ◽  
Interest Rates ◽  
Stock Prices ◽  
Stock Price ◽  
Least Square ◽  
Ordinary Least Square ◽  
Analysis Techniques ◽  
Negative Effect ◽  
The Exchange Rate

Thepurpose of this research is to knowthe influence of inflation,interestrates, and the exchange rate of the rupiah against the stock price. This research wasconducted on 30 companies secto rproperty and real estatelisted onthe IndonesiastockexchangePeriod 2012 – 2014. Data analysis techniques used in research namely OLS (Ordinary Least Square)through the help of multiple software SPSS version 18.0. Research results indicate that simultaneous inflation, interest rates, the rupiah exchanger ateand effect on stock prices. Research partially indicate that inflation is not a negative and apositive effect against the stock price, while the negative effect of interest rates significantly to the stock price and the exchange rate of rupiah apositive significant effect against the stock price.

scholarly journals FUNDAMENTALS OF INTEGRATED COMMERCIAL BANK IN MACROECONOMIC AND SHARIA PERSPECTIVE IN INDONESIA

2018 ◽  
Vol 3 (2) ◽  
pp. 349-387
Author(s):  
Kumara Jati ◽  
Aziza Rahmaniar Salam
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Commercial Bank ◽  
Stock Prices ◽  
Stock Price ◽  
Vector Autoregression ◽  
Share Price ◽  
Fasting Period ◽  
Goods And Services ◽  
Bank Stock

This research analyses the fundamentals of integrated commercial bank in macroeconomic and sharia perspective in Indonesia. Based on the calculation of Vector Autoregression (VAR), the impact of macroeconomic variables (Jakarta Stock Islamic Index / JKSII, Indonesian Stock Price Composite Index / JKSE, Crude Oil Price, and Exchange Rate)  on stock prices of commercial banks vary. These shocks indicate an indirect price transmission through exchange rate channels and economic growth. From the Structrural Time Series Model (STSM), JKSII, JKSE, and commercial bank share price prediction will generally increase at the end of 2017 and 2018. This will generate hope and benefit for policy maker and business actors in the banking, finance and sharia sectors. In general, the ARMA-ARCH/GARCH model with dummy variables found negative impact of “Fasting Period and Eid Al-Fitr” on return of JKSII, JKSE, and commercial bank stock price. This indicates a cycle of stock price decline that occurs when consumers spend more money to purchase goods and services. However, this cycle of stock price declines is only temporary because the recovery of the world economy and the increase in demand for goods and services in the future can be a pull factor for stock prices (demand factor). Policy makers and stakeholders related to the financial system, banking and capital markets, especially the sharia sector need to see the movement of conventional bank stocks and “Fasting Period and Eid Al-Fitr” as they move in the opposite direction for a certain period.   Keywords: Stock Price of Commercial Bank, Macroeconomic and Sharia Perspective, Vector Autoregression (VAR), Structural Time-Series Models (STSM), ARMA-ARCH/GARCH   JEL Classification Codes: F31, F47, G15, G21

scholarly journals An Analysis of the Relationship between Inflation and Gold Prices: Evidence from Pakistan

2013 ◽  
Vol 18 (2) ◽  
pp. 1-35 ◽  
Author(s):  
Saira Tufail ◽  
Sadia Batool
Keyword(s):  
Real Estate ◽  
Stock Prices ◽  
Foreign Currency ◽  
Stock Exchange ◽  
Asset Price ◽  
Price Inflation ◽  
Dual Nature ◽  
The Government ◽  
The Relationship ◽  
Unexpected Inflation

In this study, we formulate a new inflation equation to capture the potential effects of gold and stock prices on inflation in Pakistan. We aim to assess the inflation-hedging properties of gold compared to other assets such as real estate, stock exchange securities, and foreign currency holdings. Applying time-series econometric techniques (cointegration and vector error correction models) to data for 1960–2010, we find that gold is a potential determinant of inflation in Pakistan. On the other hand, it also provides a complete hedge against unexpected inflation. Real estate assets are more than a complete hedge against expected inflation, although stock exchange securities outperform gold and real estate as a hedge against unexpected inflation. Foreign currency proves to be an insignificant hedge against inflation. Given the dual nature of the relationship between gold and inflation, it is increasingly important for the government to monitor and regulate the gold market in Pakistan. Moreover, stock market investment should be encouraged by the government given that asset price inflation does not pose a critical problem for Pakistan as yet.

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