This paper examines the relationship between stock prices and macroeconomic variables namely, inflation rate, Treasury bill rate, exchange rate and money supply in Tanzania. The paper uses monthly time series data spanning from January to December across 10 companies listed on the Dar es Salaam Stock Exchange.
The capital market has an excessive role in the economic progress and improvement because it carries the funds from that person which has enough funds to that person which is needy. The main body of study is to check the effect of macroeconomic variables on stock market return of South Asian countries.
These countries are developing economies collected their resources as the ratio of the two fifth of the total gross domestic product of all growing economies. Stock prices, oil prices and exchange rate have specific effect on financial markets. To check the relation among stock return and macroeconomic variable two important theories are used one is capital asset pricing model and other is arbitrage pricing theory.
According to Opfer and Bessler different economic variables affect the stock prices so to check the effect of variables following models have been developed. The stock prices show the economic condition so the relationship between macroeconomic variables and stock price is significant.
The stock market has important role because with the help of these markets investor can make guess about the economy condition and investor can also make idea that either he should invest at that time or he should delay. By doing this investor can avoids from loss. When macroeconomic variables changed they affect the equity stock earnings and stock price.
Because market and economy are connect with each other. Exchange rate and oil prices are key macroeconomic variables changes the performance of the stock market Lobo, Stock market and exchange rate also keep a relation. Foreign investors affected when local currency becomes stronger and they transformed their profit into weaker currency then they bear loss.
Exchange rate has adverse connection with stock prices. A quick increase in inflation also disturbs negatively the act of the stock market. Literature review discussed in second chapter. Third chapter related with the data and research methodology.
Empirical results and discussion is chapter no four. Chapter no five based on conclusion. Stock price is dependent variable while oil price and exchange rate are independent variables.
Monthly data is used to check the influence of these variables.macroeconomic variables in Nigeria and R-square value indicated that about 60 percent of the variation in stock prices in accounted for by macroeconomic variables in Nigeria.” “ investigates the impact of changes in selected microeconomic and macroeconomic variables on stock returns at Dhaka Stock Exchange (DSE).
This paper investigates the impact of changes in selected microeconomic and macroeconomic variables on stock returns at Dhaka Stock Exchange.
A Multivariate Regression Model computed on .
The impact of macroeconomic variables on stock market returns has generated a lot of interest in the financial market literature.
The relationship between stock market returns and macroeconomic variables has been widely investigated, especially in developed markets. The early studies on the US stock markets by Lintner (). This paper discusses Impact of Macroeconomic Variables on Stock Prices: Empirical Evidence from South Asian Countries.
and the economic variables. The VECM analyses provide some support for the argument that the lagged values of macroeconomic variables have a significant influence on the stock market.
Unit Root Test Many studies have shown that most macroeconomic time series are not stationary, rather non-stationary with a deterministic trend.
Impact of Macroeconomic Variables on Economic Development of Bangladesh Since Liberation War: An Empirical Study. Raad Mozib Lalon 1, Nusrat Jahan 2.
1 Department of Banking & Insurance, University of Dhaka, Dhaka, Bangladesh. 2 Department of Business Administration, Uttara University, Dhaka, Bangladesh.