The macroeconomic variables are represented by the industrial production index, the consumer price index, M1, and the value of an investment earning the money market rate. With this addition, eqn. Gay [ 11 ] investigated the relationship between stock market index prices and the macroeconomic variables of exchange rate and oil price for Brazil, Russia, India, and China BRIC using the Box-Jenkins ARIMA model of which no significant relationship was found between respective exchange rate and oil price on the stock market index prices of either BRIC country and also there was no significant relationship found between present and past stock market returns.
Maysami [ 18 ] examined the relationship between the macroeconomic variables and sector stock market indexes in Singapore stock exchange. It is niggling to note that, though the variables under study in this paper have key implications in the economy, the subject has received little attention as only few studies had focused on the nexus between stock market development and foreign reserves.
The study uses monthly data covering the period December, to December leading to monthly observations. Retrieved February 18,from Q Finance: Economic Survey of Pakistan. Data This study conducts an empirical analysis on the impact of foreign reserves on the stock market in Ghana.
Both of the variables under consideration are very important because foreign exchange reserve is one out of the major supports to stable the value of home currency against foreign currencies and market capitalization shows the overall investment in stock market.
The results showed the existence of a long run relationship among foreign reserves, interest rates and stock market development.
State Bank of Pakistan. They found that macroeconomic variables Granger-caused stock price movements, the reverse causality was observed in case of industrial production and stock prices. The estimation methodology employed in this study is the ordinary least square estimate, unit root test, Johansen Co-integration test and Granger Causality test.
KSE started with 5 companies with a paid up capital of Rs. State Bank of Pakistan.
Data explanation and Methodology Dependent Variable KSE Market capitalization is dependent variable in this study and simply picked up from the Economic Surveys of Pakistan and from the reports of State Bank of Pakistan at the end of quarter month from the fiscal year to Model Specification The entire estimation process consists of three steps: The data for stock market development represented in this context by market capitalization was obtained from the Ghana Stock Exchange with data on foreign exchange reserve and interest rate obtained from the Central Bank of Ghana.
Nishat [ 20 ] employed vector error correction model to explore the long term equilibrium relationship between the market index of Karachi Stock Exchange and a group of macroeconomic variables industrial production index, consumer price index and the value of an investment earning the money market rate for the period of to For this study, variables used will be represented as such: Error of the Estimate 1.
Results of this study show that there is positive not significant positive relationship between variables. The three important macroeconomic variables included in the study are real effective exchange rate, foreign exchange reserves and trade balance.
Pakistan Economic and Social Review47, Data This study conducts an empirical analysis on the impact of foreign reserves on the stock market in Ghana.
Karachi Stock Exchange KSE is premier, biggest and the most popular stock market of the country, so it is used as representative of all stock exchanges of Pakistan. The value of Regression constant or intercept is The study concluded that there exists a long run relationship between the basic macro-economic indicators of Turkish economy and the stock returns at different levels.
The value of Regression co-efficient or slope is equal to 0. The paper is organized as follows: Why does Pakistna have ato accumulate foreign reserves?. The result shows that foreign exchange reserve has a significant positive impact on stock market capitalization and that all the three variables employed in this study are cointegrated.
Unidirectional relationship exists between foreign exchange reserve and stock market capitalization. Impact of Macroeconomics Variables on Stock Prices: Empirical Evidence in Case of KSE The study considers several quarterly data for different macroeconomics variables are as foreign exchange reserve, foreign exchange rate, industrial production index (IPI), whole sale price index (WPI), gross fixed capital formation (GFCF) and broad money.
IMPACT OF FOREIGN AID TO DEVELOPING COUNTRIES OBJECTIVES OF STUDY To describe the relation between foreign aid & economic growth in developing countries To evaluate the benifts and costs of foreign aid to receipt country To evaluate the relationship between foreign aid,development and governance To describe the role of foreign aid on the development of Pakistan4/4(7).
iImpact of Foreign Reserves on Karachi stock exchange Market of Pakistan Abstract This paper explains the relationship between foreign exchange reserves of Pakistan and KSE market capitalization on the basis of quarterly gathered data from fiscal year to However, the impact of high current deficit on foreign exchange reserves was not severe, as financial inflows were available to the country to partially offset the.
Nov 02, · The results show that foreign exchange reserves of Pakistan have a positive impact on KSE Stock Market that is the principal stock market of Pakistan.
Introduction This research is carried out to find the impact of foreign exchange reserves held by the State Bank of Pakistan on the investment and performance of stock .Impact of forein reserves on karachi