Opinion Polls and the Stock Market: Evidence from the 2013 Zimbabwean Presidential Elections

Researchjournali's Journal of Finance, Vol.2, No.4, pp 1-9

9 Pages Posted: 5 Sep 2016

See all articles by Dennis Murekachiro

Dennis Murekachiro

Bindura University of Science Education; University of the Witwatersrand, Wits Business School, Students

Date Written: April 30, 2014

Abstract

The paper’s aim is to examine the immediate effect of Presidential elections on the Zimbabwe stock exchange [ZSE]. Using daily data from the general index on the ZSE, the study sought to examine the impact of Presidential elections on the stock market pre-election and post-election periods Elections. An event study was conducted for this paper focusing on two key parameters; namely stock return variability and volumes. Daily closing prices on the ZSE general index are used for this analysis for the period of 120 days preceding and 30 days after the 31st July 2013 elections.

There is strong evidence of abnormal returns prior to and after the event. However, as we approached the event date, low volume margins were traded and cumulative abnormal returns were very low. For periods prior to the event date, cumulative returns were minimal due to uncertainty of Presidential results whereas the post event period was represented with high cumulative abnormal returns.

The results of this research are very important not only to academics, industry experts, and investors but also to policy makers as they provide a close by view of the stock market participant’s response to expected changes in policy making as a result of presidential elections.

This study is the first of its kind in the Zimbabwean context and research findings provide practical strategies for financial analysts to use during their buy/sell or hold decisions.

Keywords: Stock Market, Stock Return Variability, Volumes, Presidential Elections

JEL Classification: g12,c53

Suggested Citation

Murekachiro, Dennis, Opinion Polls and the Stock Market: Evidence from the 2013 Zimbabwean Presidential Elections (April 30, 2014). Researchjournali's Journal of Finance, Vol.2, No.4, pp 1-9, Available at SSRN: https://ssrn.com/abstract=2833868

Dennis Murekachiro (Contact Author)

Bindura University of Science Education ( email )

Bindura
Zimbabwe

University of the Witwatersrand, Wits Business School, Students ( email )

Johannesburg
South Africa

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