Liquidity, Stock Returns and Ownership Structure - An Empirical Study of the Bombay Stock Exchange

18 Pages Posted: 21 Dec 2012

Multiple version iconThere are 2 versions of this paper

Date Written: March 31, 1994

Abstract

In recent years, globalization of capital flows has lead to the growing relevance of "Emerging Capital Markets". In particular, India is one of the countries with an expanding stock market that has started attracting foreign funds. The Indian capital market has grown phenomenally due to the recently initiated liberalization process. For instance, between 1985 and 1992 the number of listed companies on the Bombay Stock Exchange (B.S.E.) increased from 4,344 to 6,480. Over the corresponding period, the market value of capital of the listed companies went up from Rs.253 billion to Rs.3,541 billion (approximately $ 110 billion). As a percentage of the G.N.P., the market capitalization of the listed companies increased from 9.7% in 1985-86 to 57% in 1991-92. However, the stock markets in India are plagued by severe illiquidity with the trading being very infrequent and concentrated in only a few stocks.

Suggested Citation

Krishnamurti, Chandrasekhar and Eleswarapu, Venkat R., Liquidity, Stock Returns and Ownership Structure - An Empirical Study of the Bombay Stock Exchange (March 31, 1994). IIM Bangalore Research Paper No. 65. Available at SSRN: https://ssrn.com/abstract=2181543 or http://dx.doi.org/10.2139/ssrn.2181543

Chandrasekhar Krishnamurti (Contact Author)

Nanyang Business School ( email )

S3-B1B-76 Nanyang Avenue
Nanyang Technological University
Singapore 639798
Republic of Singapore
(65) 790-5702 (Phone)
(65) 791-3697 (Fax)

Venkat R. Eleswarapu

Chicago Equity Partners ( email )

United States
312 629 8628 (Phone)

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