Speculative Bubbles and Irrational Exuberance in African Stock Markets

Almudhaf, F. (2017) “Speculative bubbles and irrational exuberance in African stock markets” Journal of Behavioral and Experimental Finance, 13, 28-32.

Posted: 2 Sep 2020

See all articles by Fahad Almudhaf

Fahad Almudhaf

Kuwait University - Department of Finance and Financial Institutions

Date Written: 2017

Abstract

We apply the sequential unit root tests of Phillips et al. (2015) for mildly explosive processes to identify and date-stamp bubbles in the emerging and frontier African stock markets. We find periods of explosive behavior in the price–dividend ratio in several markets which is indicative of irrational exuberance. We find strong evidence of multiple speculative bubbles in Botswana, Egypt, Ghana, Kenya, Nigeria and Tunisia. Results of our study are important to individual investors, emerging markets fund managers, and policy makers.

Keywords: African Stock, Bubbles, Irrational Behavior, Emerging Markets, Generalized Sup ADF

JEL Classification: G01, G02, G12, G14

Suggested Citation

Almudhaf, Fahad, Speculative Bubbles and Irrational Exuberance in African Stock Markets (2017). Almudhaf, F. (2017) “Speculative bubbles and irrational exuberance in African stock markets” Journal of Behavioral and Experimental Finance, 13, 28-32. , Available at SSRN: https://ssrn.com/abstract=3660103

Fahad Almudhaf (Contact Author)

Kuwait University - Department of Finance and Financial Institutions ( email )

Kuwait

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