Does Macro-Economic Indicators Effect on Pakistan Stock Exchange?

Author(s)

Muhammad Kamran , Prof Dr. Fatih YASAR ,

Download Full PDF Pages: 01-09 | Views: 439 | Downloads: 141 | DOI: 10.5281/zenodo.5797796

Volume 10 - November 2021 (11)

Abstract

Stock market is a great reflection of economics development of country. The main purpose of stock market is to perform as moderator among investor and borrowers. In this study, macro-economic indicators are taken as independent variables (Inflation, Money supply, Foreign direct investment, GDP per capita, GDP saving, Balance of trade, interest rate) and stock exchange prices as dependent variable. To analyzing this relationship, we used 11 years data of selected macro-economic indicators and further to elaborating this relationship, descriptive statistic, correlation analysis, granger causality test and regression analysis have been used. The finding of the study has shown that the 76% economic indicators are involved for bring variation in stock market movement and to cover rest of scenario other forces are involved (political and business influences). In a continuity of finding description, expect that FDI all other variable has positive effect of dependent variables. Hence, it is recommended that government should obtain counteractive policies (Fiscal & monetary) to manage macro-economic influences for country development.

Keywords

Macro-Economic, Pakistan Stock Exchange

References

                  i.            Viphindrartin, S., Ardhanari, M., Wilantari, R. N., Somaji, R. P., & Arianti, S. (2021). Effects Of Bank Macroeconomic Indicators On The Stability Of The Financial System in Indonesia. The Journal of Asian Finance, Economics, and Business, 8(1), 647-654.

      ii.            Chaengkham, S., & Wianwiwat, S. (2021). The impacts of macroeconomic and financial indicators on stock market index: evidence from Thailand. International Journal of Trade and Global Markets, 14(2), 197-205.

    iii.            Rehman, K. U., Shaikh, A. U. H., & Yasir, A. S. (2021). Macroeconomics Indicators & Financial Performance of Firms: A Study of the Sugar Industry in Pakistan. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 12(5), 1-11.

     iv.            Aziz, T., Marwat, J., & Mustafa, S. (2021). Macroeconomic Uncertainty and Stock Market Uncertainty: Some Further Evidence From Pakistan. Review of Pacific Basin Financial Markets and Policies, 2150014.

       v.            Iqbal, M. N., ur Rehman, M. Z., & Saleem, K (2020). Impact of Macroeconomic Variables on Stock Markets: Evidence from Frontier Markets like Pakistan Stock Exchange (PSX), (2020).

     vi.            Siddiqi, M. M., Abdul Aziz, D., & Maria, M. H. M. (2021). Impact of Macroeconomic Variables on Stock Market Liquidity. Psychology and Education Journal, 58(3), 3263-3268.

   vii.            Verma, R. K., & Bansal, R. (2021). Impact of macroeconomic variables on the performance of stock exchange: a systematic review. International Journal of Emerging Markets.

 viii.            Naseem, S., Rizwan, F., Abbas, M. Z., Mohsin, M., & Zia ur Rehman, D. (2019). Impact of Macroeconomic Variables on Pakistan Stock Market. Naseem, S., Rizwan, F., Abbas, Z., & Zia-Ur-Rehman, M.(2019). Impact of Macroeconomic Variables on Pakistan Stock Market. Dialogue (1819-6462), 14(2).

     ix.            Khalid, W., & Khan, S. (2017). Effects of macroeconomic variables on the stock market volatility: the Pakistan experience. Global Journal of Management and Business Research.

       x.            He, Y. (2017). A study on the relationship between money supply and macroeconomic variables in China. Mediterranean Journal of Social Sciences, 8(6), 99.

     xi.            Amassoma, D., Sunday, K., & Onyedikachi, E. E. (2018). The influence of money supply on inflation in Nigeria. Journal of Economics & Management, 31, 5-23.

   xii.            Ray, S. (2012), “Testing Granger causal relationship between macroeconomic variables and stock price behaviour: Evidence from India.” Advances in Applied Economics and Finance, Vol. 3, Issue 1, 2012, ISSN 2167-6348.

 xiii.            Khan Z. Khan S., Rukh L., Imdadullah and Rehman W., Impact of Interest rate, Exchange rate and Inflation on Stock Market Returns of KSE 100 Index, Int. J. Eco. Res., 3(5), 142-155 (2012)

 xiv.            Ogawa, S. (2020). Monetary growth with disequilibrium: a non-Walrasian baseline model. Munich Personal RePEc Archive

   xv.            Maysami, R. C., & Koh, T. S. (2000). A vector error correction model of the Singapore stock market. International Review of Economics & Finance, 9(1), 79-96.

 xvi.            Famma, E. F. (1990). Stock prices, expected prices and real activity. Journal of Finance, 45(4), 1080-1089.

xvii.            Nishat, M., and Shaheen, N. (2004), “Macroeconomic factors and Pakistani equity market.” Department of Finance and Economics, Institute of Business Administration Karachi, Pakistan.

xviii.            Bhattacharya, B., and Mukherjee, J. (2002), “Causal relationship between stock market and exchange rate, foreign exchange reserves and value of trade balance: A case study for India,”

Cite this Article: