Stock Market Openings: Experience of Emerging Economies

Posted: 29 Nov 1999

See all articles by E. Han Kim

E. Han Kim

University of Michigan, Stephen M. Ross School of Business

Vijay Singal

Virginia Tech

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.

JEL Classification: E31, F31, G12, G14

Suggested Citation

Kim, E. Han and Singal, Vijay, Stock Market Openings: Experience of Emerging Economies. Available at SSRN: https://ssrn.com/abstract=193970

E. Han Kim

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-764-2282 (Phone)
734-763-3117 (Fax)

Vijay Singal (Contact Author)

Virginia Tech ( email )

250 Drillfield Drive
Blacksburg, VA 24061
United States
5402317750 (Phone)

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