scholarly journals ANALYZING TIME EFFECT IN THE PUSH AND PULL FACTORS AFFECTING FOREIGN PORTFOLIO INVESTMENT IN INDONESIA STOCK MARKET (CASE STUDY OF FOREIGN BUYING DURING THE PERIOD 2003-2018)

2021 ◽  
Vol 2 (5) ◽  
pp. 777-794
Author(s):  
Matrodji Mustafa ◽  
Agustini Hamid
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Market Liquidity ◽  
Foreign Investor ◽  
Portfolio Investment ◽  
Pull Factors ◽  
Push Factors ◽  
Foreign Portfolio Investment ◽  
Stock Market Return ◽  
Stock Market Liquidity

This study examined the influence of pull and push factors on foreign portfolio investment in Indonesia Stock Market. Two measures of foreign portfolio investment are foreign investor total buying   and foreign investor net buying. The pull factors are represented by Return on Jakarta Composite Index, Jakarta Stock Marker liquidity, IDR Exchange Rate, and Infation Rate. The push factors included are return on Dow Jones Industrial Average, Yield on US Treasury Bill, and return on Gold. This study takes Foreign Investor Total Buying and Foreign Investor Net Buying as dependent variables. To accomodate time or year effect, a panel data regression is employed as analytical tool. Processing monthly data from January 2003 to December 2018, and using Foreign Investor Total Buying as dependent variable, this study finds that exchange rate and stock market liquidity affect the foreign investor total buying significantly. The negative coefficients of exchange rate and the positive coefficient of stock market liquidity support the hypotheses. The regression on Net Buying shows that exchange rate, stock market return,   and stock market liquidity affect foreign investor net buying significantly. The negative coefficient of exchange rate and positive coefficient of stock market return support the hypotheses while the negative coefficient of stock market liquidity does not. The individual year fixed effect and individual year random are present in the first and second regressions repectively. In both regressions, no variables in push factors affect foreign portfolio investment significantly. hence, the foreign portfolio investment in Indonesia is affected only by pull factors

scholarly journals The nexus between bond liquidity, stock liquidity and foreign portfolio investment

2021 ◽  
Vol 10 (3) ◽  
pp. 92-103
Author(s):  
Godfrey Marozva ◽  
Patricia Lindelwa Makoni
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Bond Market ◽  
Market Liquidity ◽  
Portfolio Investment ◽  
Foreign Investors ◽  
Foreign Portfolio Investment ◽  
Stock Market Liquidity ◽  
Portfolio Investments ◽  
Effective Spread

The purpose of this article was to assess the impact of financial market liquidity on international capital flows in emerging markets. Specifically, the research investigates the effect of bond market liquidity and stock market liquidity on foreign portfolio investments using data for five emerging African countries, being Egypt, Kenya, Mauritius, Nigeria and South Africa, for the period 2000 to 2020. The data was sourced from the Bloomberg and World Bank (WDI) databases. Panel data analysis (fixed effects model) was undertaken using three different liquidity measures: the effective spread; Amihud’s (2002) illiquidity measure; and market impact as measured by trading volume. Our findings revealed mixed results. It was found that stock market liquidity attracted foreign portfolio investments. Although bond market liquidity, as measured by the volume of trade, promoted foreign portfolio investment, it was different for the effective spread, as the higher the effective spread, the higher the inward FPI flows, and vice versa. Results on the effects of the bond effective spread on FPI show that as long as the bonds are above the investable grade, investors are not discouraged by the cost of trading. Our findings thus confirm that FPI inflows are predisposed on liquid and efficient host country financial markets. Further, the entrance of foreign investors in the host country’s domestic financial markets, leads to the enhancing of liquidity in the local market, thus increasing risk sharing between local and foreign investors.

scholarly journals FINANCIAL MARKET PERFORMANCE AND FOREIGN PORTFOLIO INFLOWS TO NIGERIA: AUTOREGRESSIVE DISTRIBUTIVE LAG APPROACH

2017 ◽  
Vol 5 (6) ◽  
pp. 673-688
Author(s):  
Adesola W. Adebisi ◽  
Oka Felix Arikpo
Keyword(s):  
Stock Market ◽  
Causal Relationship ◽  
Financial Market ◽  
Market Performance ◽  
Market Liquidity ◽  
Portfolio Investment ◽  
Foreign Portfolio Investment ◽  
Long Run ◽  
Stock Market Performance ◽  
Short Run

This study examined the relationship between financial market performance and foreign portfolio investment in Nigeria. The study specifically assessed whether there is a long run and short run causal relationship running from financial market performance to foreign portfolio investment in Nigeria. Financial market performance was measured using stock market performance, stock market liquidity and total new issues. The data for the study were source from the CBN statistical bulletin for the period 1984 to 2015. The exploratory design was combined with the ex-post facto research design; the data collection method was desk survey. The study used the Autoregressive Distributive Lag (ARDL) technique for data analysis. Findings from the analyses showed that financial market performance has no long run causal relationship with foreign portfolio investment in Nigeria. Also, stock market performance and stock market liquidity have no short run causal relationship with foreign portfolio investment in Nigeria. Lastly, total new issue has a short run causal relationship with foreign portfolio investment in Nigeria. The study on the basis of these findings recommends that stock market regulators should through conscious enlightenment campaigns encourage more domestic participation in the market to enhance the market performance, deepening and growth as this will strengthen its long run causality with FPI. Lastly, stock market regulators should through conscious risk reduction policies formulation and implementation reduce the riskiness of investing in the stock market to increase transactions and liquidity in the stock market, boost the rate of turnover to investors as this will attract foreign portfolio investors to the Nigerian financial market.

scholarly journals FOREIGN PORTFOLIO INVESTMENT AND CAPITAL MARKET DEVELOPMENT IN NIGERIA

2021 ◽  
Vol 4 (2) ◽  
pp. 52-65
Author(s):  
Oladotun Mabinuori ◽  
◽  
Bibiana Njogo ◽  
Oladele Jaiyeoba ◽  
◽  
...  
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Central Bank ◽  
Capital Market ◽  
Market Performance ◽  
Portfolio Investment ◽  
Foreign Portfolio Investment ◽  
Market Capitalization ◽  
The Capital Market ◽  
Stock Market Capitalization

The poor performance of Nigeria’s stock market is a source of concern and has generated contentious debates among the stakeholders in the Nigerian Stock Exchange Market (NSE). This study investigates the impact of foreign portfolio investment on the performance of the stock market in Nigeria for the period of 30years (1989-2018). Secondary and time-series data were used and the variables such as; stock market capitalization proxy for capital market performance, portfolio investment, exchange rate and inflation rate were sourced from the Central Bank of Nigeria (CBN) statistical bulletin, 2019 To avoid spurious results, unit-root test and regression analysis were used as the tools of data analysis. Findings show that all the predictors have no significant impact on stock market capitalization except the exchange rate that is statistically significant at 5% critical value. However, the f-statistic results (18.83660) indicate that the combine variables have a significant impact on stock market performance in Nigeria. It was therefore concluded that foreign portfolio investment if properly encouraged serve as a Potent variaable for enhancing the performance of the stock market in Nigeria. The study recommends that, there is a need for the government through the central bank of Nigeria to implement a policies that will increase the level and size of market capitalization in the capital market. Such an increase in the capital market will provide the necessary funds for investors for further investments thereby increasing productivity in Nigeria.

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.

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