Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime
In this paper, the Zimbabwe Stock Exchange (ZSE) was tested to see whether it is efficient or not after the country adopted the multiple currency exchange rate regime. To achieve this, the weak form market efficiency was tested. Data on daily and weekly closing stock prices over a period of 19 Febru...
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2016
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| Online Access: | http://dx.doi.org.access.msu.ac.zw:2048/10.15413/jbem.2012.0123 http://hdl.handle.net/11408/1419 |
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| author | Chikoko, Laurine Muparuri, William |
| author_facet | Chikoko, Laurine Muparuri, William |
| author_sort | Chikoko, Laurine |
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| description | In this paper, the Zimbabwe Stock Exchange (ZSE) was tested to see whether it is efficient or not after the country adopted the multiple currency exchange rate regime. To achieve this, the weak form market efficiency was tested. Data on daily and weekly closing stock prices over a period of 19 February 2009 to 31 December 2012 was used. The non-parametric and parametric research methods through the partial autocorrelation function were used. The results of both tests showed that the successive stock price changes were dependent which indicates that the ZSE was not efficient in the weak form when the country used multiple currencies. In addition, the results showed evidence of autocorrelation which implies that during the period under study, the ZSE did not follow random walk hypothesis. In order to make the ZSE efficient we recommend that regulators may consider putting in place measures and regulations that enable large number of well informed investors. The ZSE may insist on timely release of correct and quality information to boost public and investor confidence and provide a platform for informed decision making by the investing public. There may be need for the removal of fees and other costs by the ZSE committee which hinder smooth trading on the stock exchange. Where removal is not feasible, such costs must be kept to the minimal to avoid hindrance on efficiency. |
| format | Article |
| id | ir-11408-1419 |
| institution | My University |
| language | English |
| publishDate | 2016 |
| publisher | Academia Publishing |
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| spelling | ir-11408-14192022-06-27T13:49:06Z Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime Chikoko, Laurine Muparuri, William Zimbabwe Stock Exchange; multiple currency, exchange rate regime, market efficiency; runs tests; autocorrelation tests. In this paper, the Zimbabwe Stock Exchange (ZSE) was tested to see whether it is efficient or not after the country adopted the multiple currency exchange rate regime. To achieve this, the weak form market efficiency was tested. Data on daily and weekly closing stock prices over a period of 19 February 2009 to 31 December 2012 was used. The non-parametric and parametric research methods through the partial autocorrelation function were used. The results of both tests showed that the successive stock price changes were dependent which indicates that the ZSE was not efficient in the weak form when the country used multiple currencies. In addition, the results showed evidence of autocorrelation which implies that during the period under study, the ZSE did not follow random walk hypothesis. In order to make the ZSE efficient we recommend that regulators may consider putting in place measures and regulations that enable large number of well informed investors. The ZSE may insist on timely release of correct and quality information to boost public and investor confidence and provide a platform for informed decision making by the investing public. There may be need for the removal of fees and other costs by the ZSE committee which hinder smooth trading on the stock exchange. Where removal is not feasible, such costs must be kept to the minimal to avoid hindrance on efficiency. 2016-05-19T14:06:16Z 2016-05-19T14:06:16Z 2013 Article 2315-7755 http://dx.doi.org.access.msu.ac.zw:2048/10.15413/jbem.2012.0123 http://hdl.handle.net/11408/1419 en Journal of Business and Economic Management;Vol.1, No. 3; p. 041-047 open Academia Publishing |
| spellingShingle | Zimbabwe Stock Exchange; multiple currency, exchange rate regime, market efficiency; runs tests; autocorrelation tests. Chikoko, Laurine Muparuri, William Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime |
| title | Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime |
| title_full | Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime |
| title_fullStr | Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime |
| title_full_unstemmed | Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime |
| title_short | Zimbabwe Stock Exchange and efficiency in the multiple currency exchange rate regime |
| title_sort | zimbabwe stock exchange and efficiency in the multiple currency exchange rate regime |
| topic | Zimbabwe Stock Exchange; multiple currency, exchange rate regime, market efficiency; runs tests; autocorrelation tests. |
| url | http://dx.doi.org.access.msu.ac.zw:2048/10.15413/jbem.2012.0123 http://hdl.handle.net/11408/1419 |
| work_keys_str_mv | AT chikokolaurine zimbabwestockexchangeandefficiencyinthemultiplecurrencyexchangerateregime AT muparuriwilliam zimbabwestockexchangeandefficiencyinthemultiplecurrencyexchangerateregime |