DÖVİZ KURUNUN FİNANS SEKTÖRÜ HİSSE SENEDİ GETİRİLERİ ÜZERİNDEKİ ETKİSİ / The Effect of Exchange Rate on Finance Sector Stock Returns

Abstract

This article aims to explain the effect of foreign exchange on the stock returns. In this respect, the effect of the exchange rate on the performance of selected companies representing the financial sector in the Borsa Istanbul (BIST) 100 index has been comparatively examined in the COVID-19 pre-pandemic period (15/09/2019-10/03/2020) and the post-pandemic period (11/03/2020-09/10/2020). In the study, the relationship between the variables was estimated with three different regression models (Adler and Dumas Model, Jorion Model, Choi and Prasad Model). According to the findings, the increase in the exchange rate in the pre-pandemic period caused a decrease in the average return of stocks in the financial sector. According to the findings, the relationship between the variables in the pre-pandemic period is compatible with the traditional approach. The relationship between the variables was statistically insignificant during the postpandemic period. The fact that exchange rate had no effect on the return of stocks during the post-pandemic period pointed out that the return of stocks affected by different factors during the post-pandemic period.