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Factors Influencing the Zimbabwe Stock Exchange Performance (2002-2007)

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Author Info

  • Kosmas Njanike

    (Bindura University, Zimbabwe)

  • Pension Katsuro

    (Bindura University, Zimbabwe)

  • Michael Mudzura

    (Bindura University, Zimbabwe)

Registered author(s):

    Abstract

    This paper assesses the factors that influenced the Zimbabwe Stock Exchange’s performance from 2002 to 2007. The study seeks to identify and define the major drivers of the bourse during this period and use them to guide an investor on the ZSE or any other stock exchange in a developing economy. Despite the shrinking of the economy since 2000, the stock market inversely reacted to the factors that affected the economy negatively. The ZSE was driven mainly by speculation as investors sought to hedge against hyperinflation. The decline of the Zimbabwe economy during that period caused capital flight to the stock market pushing prices up hence huge profits. The real factors that affect share investment and the stock market in general were addressed, giving insight to the stock investors. The study recommends that stock investors should keep track of the general and unique factors that have an impact on their investments.

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    File URL: http://upet.ro/annals/economics/pdf/2009/20090221.pdf
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    Bibliographic Info

    Article provided by University of Petrosani, Romania in its journal Annals of the University of Petrosani - Economics.

    Volume (Year): 9 (2009)
    Issue (Month): 2 ()
    Pages: 161-172

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    Handle: RePEc:pet:annals:v:9:i:2:y:2009:p:161-172

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    Web page: http://www.upet.ro/

    Related research

    Keywords: ZSE Performance; Speculation; Hedging; Investment; Inflation;

    References

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    1. Seyhun, H. Nejat, 1986. "Insiders' profits, costs of trading, and market efficiency," Journal of Financial Economics, Elsevier, vol. 16(2), pages 189-212, June.
    2. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    3. Tony Caporale & Chulho Jung, 1997. "Inflation and real stock prices," Applied Financial Economics, Taylor & Francis Journals, vol. 7(3), pages 265-266.
    4. Titman, Sheridan & Warga, Arthur, 1989. "Stock Returns as Predictors of Interest Rates and Inflation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 24(01), pages 47-58, March.
    5. Asquith, Paul & Mullins, David W, Jr, 1983. "The Impact of Initiating Dividend Payments on Shareholders' Wealth," The Journal of Business, University of Chicago Press, vol. 56(1), pages 77-96, January.
    6. Miller, Merton H & Rock, Kevin, 1985. " Dividend Policy under Asymmetric Information," Journal of Finance, American Finance Association, vol. 40(4), pages 1031-51, September.
    7. Shleifer, Andrei & Summers, Lawrence H, 1990. "The Noise Trader Approach to Finance," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 19-33, Spring.
    8. Taylor, Mark P. & Allen, Helen, 1992. "The use of technical analysis in the foreign exchange market," Journal of International Money and Finance, Elsevier, vol. 11(3), pages 304-314, June.
    9. Wong, Michael Chak-sham & Cheung, Yan-Leung, 1999. "The practice of investment management in Hong Kong: market forecasting and stock selection," Omega, Elsevier, vol. 27(4), pages 451-465, August.
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