Stock exchange

About: Stock exchange is a research topic. Over the lifetime, 39566 publications have been published within this topic receiving 612044 citations.

International Stock Price Movements: Links and Messages

Abstract: SINCE THE BEGINNING of 1986, the major stock markets have become increasingly internationalized by deregulation . By 1987 some 600 foreign stocks traded in the New York market, and the markets in London, Frankfurt, and Tokyo had also attracted numerous foreign listings. Some analysts worried that the growing international integration of financial markets could help transfer national financial disturbances to other markets.' The spectacle, in October of 1987, of nearly simultaneous price collapses around the world was evidence to the point. In this paper we analyze the daily movements in the stock price indexes, from close to close, of the United States, Japan, Great Britain, and Germany during 1986-88, focusing particularly on the correlation of price movements in these, the world's four largest equity markets. We begin by assuming that stock markets anticipate successfully most events that bear on dividends and discount rates, and that changes in stock prices will be related only to unanticipated events. Dealing with daily changes in asset prices and yields assures this, because more than a normal return can never be expected in efficient markets on financial assets, such as foreign deposits or bundles of shares, or on storable

Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges

Abstract: This paper examines the economic importance of stock markets in Africa. It discusses policy options for promoting the development of the stock market in Africa. The results of the paper show that the stock markets have contributed to the financing of the growth of large corporations in certain African countries. An econometric investigation of the impact of stock markets on growth in selected African countries, however, finds inconclusive evidence even though stock market value traded seem to be positively and significantly associated with growth. African stock exchanges now face the challenge of integration and need better technical and institutional development to address the problem of low liquidity. Preconditions for successful regional approaches include the harmonization of legislations such as bankruptcy and accounting laws and a liberalized trade regime. Robust electronic trading systems and central depository systems will be important. Further domestic financial liberalization such as steps to improve the legal and accounting framework, private sector credit evaluation capabilities, and public sector regulatory oversight would also be beneficial.

Relationship between Interest Rate and Stock Price: Empirical Evidence from Developed and Developing Countries

Abstract: Stock exchange and interest rate are two crucial factors of economic growth of a country. The impacts of interest rate on stock exchange provide important implications for monitory policy, risk management practices, financial securities valuation and government policy towards financial markets. This study seeks evidence supporting the existence of share market efficiency based on the monthly data from January 1988 to March 2003 and also shows empirical relationship between stock index and interest rate for fifteen developed and developing countries- Australia, Bangladesh, Canada, Chile, Colombia, Germany, Italy, Jamaica, Japan, Malaysia, Mexico, Philippine, S. Africa, Spain, and Venezuela. Stationarity of market return is tested and found none of this stock market follows random walk model, means not efficient in weak form. To investigate the reasons of market inefficiency, relationship between share price and interest rate, and changes of share price and changes of interest rate were determined through both time series and panel regressions. For all of the countries it is found that interest rate has significant negative relationship with share price and for six countries it is found that changes of interest rate has significant negative relationship with changes of share price. So, if the interest rate is considerably controlled for these countries, it will be the great benefit of these countries’ stock exchange through demand pull way of more investors in share market, and supply push way of more extensional investment of companies.

The Effect of Wage Bargains on the Stock Market Value of the Firm

Abstract: The author estimates the change in the value of common stock resulting from an unexpected change in collectively bargained labor costs. Using bargaining unit wage data and NYSE stock returns, he estimates a dollar for dollar trade-off between these variables. This result is consistent with stock valuations based on present value maximizing managerial decisions; that is, the results are consistent with Hotelling's lemma. The author also finds support for the hypothesis that collective bargains maximize the sum of shareholder and union member wealth; that is, the results are consistent with strong efficiency in the contracting environment. Copyright 1989 by American Economic Association.