Stock market openings: Experience of emerging economies

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TR Number

Date

2000-01

Journal Title

Journal ISSN

Volume Title

Publisher

University of Chicago Press

Abstract

This article is an exploratory examination of the benefits and risks associated with opening of stock markets. Specifically, we estimate changes in the level and volatility of stock returns, inflation, and exchange rates around market openings. We find that stock returns increase immediately after market opening without a concomitant increase in volatility. Stock markets become more efficient as determined by testing the random walk hypothesis. We find no evidence of an increase in inflation or an appreciation of exchange rates. If anything, inflation seems to decrease after market opening as do the volatility of inflation and volatility of exchange rates.

Description

Keywords

variance-ratio test, equity markets, growth, volatility, diversification, integration, inflation, finance, returns, business

Citation

E. Han Kim and Vijay Singal. "Stock Market Openings: Experience of Emerging Economies," The Journal of Business, Vol. 73, No. 1 (January 2000), pp. 25-66. DOI: 10.1086/209631