Monetary Policy Impact on Stock Return: Evidence from Growing Stock Markets

Bissoon, Raksha; Seetanah, Boopen; Bhattu-Babajee, R; Gopy-Ramdhany, Narvada; Seetah, Keshav

doi:10.4236/tel.2016.65112

Cited by 19 publications

(20 citation statements)

References 16 publications

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“…This is an indication that monetary policy rate which influences interest rate of deposit money banks charge to extend fund to clients is critical to determining the level of investment in the Nigerian stock market. This finding supports the empirical works of Bissoon, Seetanah, Bhattu-Babajee, Gopy-Ramdhany and Seetah [19]. The inability of monetary policy rate to influence returns in the Nigerian Stock Exchange is an affirmation of Muthama [20] and Galebotswe and Tlhalefang [23] whom established that in Kenya and Botswana, monetary policy rate does not in any way affect stock market return.…”

Section: Brief Discussion Of Our Findingssupporting

confidence: 85%

“…Bissoon, Seetanah, Bhattu-Babajee, Gopy-Ramdhany and Seetah [19] investigated the impact of monetary policies on stock markets based on a sample of five open countries with growing stock market over the period 2004 to 2014. Using a random effect model for the panel regression coupled with a panel vector error correction model to study the short term and long term relationship between the variables, the findings revealed a negative relation between interest rate and stock return and a direct link between money supply and stock return.…”

Section: Review Of Related Literaturementioning

confidence: 99%

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Does Monetary Policy Affect Stock Market Return? Recent Evidence from the Nigerian Stock Exchange (1986-2018)

Umezurike

Echekoba

Ananwude

2019

SAJSSE

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The nexus between monetary policy and stock market return has remained a topic of debate in the literature. We determined whether stock market return in Nigerian Stock Exchange (NSE) is affected by monetary policy or not. To this end, we employed the Autoregressive Distribute Lag (ARDL) model using data from 1986 to 2018 bearing in mind that our conclusion in this subject matter may be used to make assertion by other researchers who have interest in this area of study in finance. We are convinced beyond reasonable doubt based on the data we employed that the stock market return in Nigeria is not significantly affected by adjustments in monetary policy instruments of the Central Bank of Nigeria (CBN): The apex regulator of the financial system in Nigeria. This paper wholeheartedly reflects the opinion that the Central Bank of Nigeria should consider reducing the current double digit monetary policy rate to a single digit say 9% at most to attract investments in the stock market. This would reduce the prime lending rate because, high interest rate reduces cash flows of firms quoted in the exchange, and thus contraction in values of securities traded on the market.

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Section: Brief Discussion Of Our Findingssupporting

confidence: 85%

Section: Review Of Related Literaturementioning

confidence: 99%

Does Monetary Policy Affect Stock Market Return? Recent Evidence from the Nigerian Stock Exchange (1986-2018)

Umezurike

Echekoba

Ananwude

2019

SAJSSE

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“…Research that reveals similar results is Alam & Uddin ( 2009) in high-income and developing countries, Ahmad. et al (2010) in Pakistan and Bissoon, et al (2016) in research objects of different continents.…”

Section: A) Indonesiamentioning

confidence: 97%

RETRACTED: Dynamic of Foreign Direct Investment (FDI) Relationship, Macroeconomic Stability and Return of Shares Index in Four Asen Countries

Suharti¹,

Hasbi

2021

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Southeast Asian countries are looking forward to capital market integration. The presence of this momentum requires stable economic conditions in each country and an attractive capital market. This momentum is also an opportunity for the Islamic capital market to be further developed in this region. This study aims to examine the effects of Foreign Direct Investment (FDI) and macroeconomic variables, namely economic growth, inflation, reference interest rates and exchange rates on the return of the Islamic stock index in four ASEAN countries, namely Indonesia, Malaysia, Thailand and Singapore. The research period since four quarter of 2006 until the first quarter of 2020. The method used in empirical evidence in this study is the Autoregressive Distributed Lag Bounds Testing Approach (ARDL). This study found a long-term co-integration relationship in all research object countries. In terms of long-term relationships and short-term dynamics, this study finds variations in yield and direction coefficients in 4 ASEAN countries. The speed of readjustment of balance in case of shocks, respectively, is 44.7%, 65.4%, 43.5% and 50.0% per month.

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“…Following the quantity theory of money, when money supply tends to increase, this condition will induce people to hold money and demand to buy share are incline, and finally encourage share price rise. Bissoon, Seetanah, Babajee, Ramdhany, and Seetah (2016); Setiawan (2020) asserted that interest rate negatively correlates with the share price. Alam and Uddin (2009) mentioned that share price negatively correlates with the interest rate.…”

Section: Interest Ratementioning

confidence: 99%

Covid-19, Inflation, and Interest Rate: Their Influences on the Jakarta Composite Index

Aryani¹,

Maupula²

2021

Minds

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This study aims to determine the effect of inflation, interest rates, and the Covid-19 pandemic condition on the Jakarta Composite Index (JCI) and the difference of the JCI before and after the Large-Scale Social Restrictions (LSSR). Data were collected from January to August 2020. This study evaluates the effect of inflation, interest rate, the Covid-19 Pandemic on the JCI by the t-test and regression, while the Wilcoxon Test tested the JCI before and after LSSR. The results revealed that inflation, interest rates, and the Covid-19 pandemic partially and simultaneously affected the JCI. All shares traded in the Indonesia Stock Exchange indexed by the JCI before LSSR are different from the JCI after LSSR.

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Monetary Policy Impact on Stock Return: Evidence from Growing Stock Markets

Cited by 19 publications

References 16 publications

Does Monetary Policy Affect Stock Market Return? Recent Evidence from the Nigerian Stock Exchange (1986-2018)

Does Monetary Policy Affect Stock Market Return? Recent Evidence from the Nigerian Stock Exchange (1986-2018)

RETRACTED: Dynamic of Foreign Direct Investment (FDI) Relationship, Macroeconomic Stability and Return of Shares Index in Four Asen Countries

Covid-19, Inflation, and Interest Rate: Their Influences on the Jakarta Composite Index

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