Precious metals as hedge and safe haven for African stock markets

Asymmetric impacts of geopolitical risk on stock markets: A comparative analysis of the E7 and G7 equities during the Russian-Ukrainian conflict

“…5 B) demonstrate that since the commencement of the geopolitical conflict between Russia and Ukraine, several E7 stock markets (Brazil, China, Russia, Indonesia, and Turkey) vis-à-vis a few G7 stock markets (Japan and the US) are net recipients, emphasizing their hedging potential against market shocks propagated by geopolitical risk (i.e., GPR) and other members belonging to either the E7 or G7 markets, as already highlighted. This finding is consistent with existing works that find emerging market assets as suitable diversifiers for those from developed markets [ 1 , [16] , [17] , [18] , [19] , [20] ]. Moreover, the results show that GPR remains a consistent transmitter of spillovers over the analyzed period, emphasizing that risk transmission, contagion, and spillovers are intense in crisis periods due to heightened risk aversion levels [ 63 ].…”

“…In crisis periods, the intensity of effects experienced by developing markets is expected to be lesser than their developed counterparts due to under-developed monetary and economic systems that are a characteristic of developing economies [ 14 , 15 ]. Their exceptional growth prospect in recent periods has amplified the rate at which investors from the developed markets complement their seemingly high-risk investments with assets from developing countries [ 1 , [16] , [17] , [18] , [19] , [20] ]. Given the link between these markets, analyzing the response of various representatives from each economic class towards geopolitical risk is important for asset allocation, risk management, and policy management.…”

Dynamic connectedness and hedging opportunities of the commodity and stock markets in China: evidence from the TVP-VAR and cDCC-FIAPARCH

“…Cu is a valuable asset for hedging and portfolio diversification. (v) In terms of the classical safe-haven property of gold, although gold is evidenced to be a valuable hedging instrument for global stock indices, such as: the US (S&P 500), Germany (DAX), Japan (Nikkei 2252) (Alshammari and Obeid 2023), and the African 7 stock indices (Naeem et al 2022), gold is not confirmed to be hedging effectively for the Indian BSESN index. Our results indicate that gold achieves the best hedging performance for CSI300 long positions, with a hedging effectiveness of 69.49%.…”

“…On the other hand, the Russia-Ukraine war reinforced the spillover effects of PTA returns as a net transmitter. This finding is likely related to the prevailing uncertainty in global financial markets (Adekoya and Oliyide 2021) and investors' heterogeneous responses to relevant financial market news (Naeem et al 2022) during the period of COVID-19 and the Ukraine war period. First, the CSI300 return is a consistent recipient of spillovers for copper and PTA returns over the full sample period.…”

A Comparative Analysis on the Role and Market Linkages of Gold Backed Assets During COVID-19 Pandemic

“…According to Yousaf and Yarovaya (2022), gold offers protection for investors and portfolio managers against losses in a few of the Asian stock markets during the COVID-19 outbreak. Many other literature recently explores the safe haven property by studying the correlation between gold and stock market and concludes with mixed results (Naeem et al, 2022;Tronzano, 2022;Wen et al, 2022).…”