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Co integration among Major South Asian and Developed Stock Market Indexes and their Association ship with KSE 100 Index
Abstract
The main motive of current study is to examine the association ship among South Asian markets, Developed stock markets and their influence on KSE 100index.The equity market integration becomes a study of interest from last few years. The Globalization and decentralization has increased the interdependence between stock markets. International investors’ and portfolio managers always look for the opportunity of diversification. Johansen test for co-integration approach to measure long association ship was employed. The findings reveal that the South Asian equity indices have no long run association ship. Similarly, there is no interlink age among the Developed market indices. South Asian markets have no influence on KSE 100 index. However, developed stock exchanges have an influence on KSE 100 index. On the basis of our finding we recommend that investors can achieve the benefit of diversification across investing in south Asian markets or across investing in Developed markets. But developed markets have an influence on KSE 100 index, so simultaneously investing in KSE 100 index and developed markets one’s cannot achieve the benefit of diversification
Authors
Amna Noor
Assistant Professor, School of Business Management and Administrative Sciences, The Islamia University of Bahawalpur, Bahawalpur, Punjab, Pakistan
Saleh Nawaz Khan
Ph. D student in Finance, School of Business Management and Administrative Sciences, The Islamia University of Bahawalpur, Bahawalpur, Punjab, Pakistan
Kaneez Fatima
Assistant Professor, Institute of Management Sciences, University of Balochistan, Quetta. Balochistan, Pakistan
Keywords
Stock Market Indexes, Globalization, Co integration, Diversification JEL Classification: G150
