Do stock price bubbles correlate between China and Pakistan? An inquiry of pre‐ and post‐Chinese investment in Pakistani capital market under China‐Pakistan Economic Corridor regime

Liaqat, Ayesha; Nazir, Mian Sajid; Ahmad, Iftikhar; Mirza, Hammad Hassan; Anwar, Farooq

doi:10.1002/ijfe.1754

Cited by 3 publications

(3 citation statements)

References 47 publications

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“…5) Apart from foreign direct investments, Chinese investors have also been actively conducting foreign portfolio investments in Pakistan. In a recent study, Liaqat et al (2020) find that due to increasing Chinese portfolio investments in Pakistan, the stock market performance in both countries has shown high correlation suggesting that strategic interests of both countries are aligned. 6) The public sentiment towards massive Chinese investments under the 'One Belt & One Road' initiative has been a mixed one: some support while others oppose them (Kanwal, Chong & Pitafi, 2019;Mahmood, Sabir & Ali, 2020).…”

Section: China -Pakistan Contextmentioning

confidence: 99%

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Umer

Ahmed

Jadoon

2021

OMEE

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The field of behavioral finance has actively researched behavioral elements influencing the choices of individual investors. This study also contributes to the behavioral finance and examines the effect of an increase in a foreign firm’s partial ownership in a domestic firm on the local individual investments in that domestic firm. Specifically, using a controlled lab experiment the study examines the investments of Pakistani individual investors between a purely Pakistani firm and a Pakistani firm with three different levels of Chinese ownership (portfolio, minority, majority). The experimental results show that with reference to Chinese minority ownership in a Pakistani firm, the potential investors are 47% (61%) less likely to invest in a Pakistani firm with Chinese portfolio (majority) ownership than in a purely Pakistani firm. The study uncovers an important non-monetary factor in the form of a foreign firm’s partial ownership that can significantly influence the choices of individual investors. It also makes an important contribution to the growing literature on the Chinese foreign investments specifically in Pakistan by exploring how potential individual Pakistani investors are likely to react to an increase in Chinese investments in Pakistani firms.

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Section: China -Pakistan Contextmentioning

confidence: 99%

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Umer

Ahmed

Jadoon

2021

OMEE

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“…One of the instruments in the capital market is stock. Shares are investment instruments in the form of securities as proof of ownership of a company (Liaqat et al, 2020;Mubarok, 2019). Shares are proof of ownership of a company (Mubarok et al, 2017).…”

Section: Investmentmentioning

confidence: 99%

Analysis of Abnormal Returns Before and After the Announcement of the Merger of State-Owned Sharia Banks

2021

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Purpose - This study aims to examine the capital market's reaction to the merger of BUMN Syariah Banks, which is seen as abnormal returns at PT Bank BRI Syariah Tbk.Method - The data for this study were taken ten days before and ten days after announcing the BUMN Sharia Bank merger. The data was processed by paired sample t-test using SPSS.Result - Based on the analysis and discussion results, it shows that there is no market reaction to the announcement of the signing of the BUMN Islamic bank merger on BRIS shares as seen from the abnormal returns before and after the signing of the merger, which there is no significant difference.Implication - This can happen because the world is currently facing the COVID-19 pandemic, which causes market uncertainty. In addition, abnormal returns are not the only indicator to measure the wealth created by an event. Another factor that causes no significant difference in abnormal returns is that the data used in the event window research is daily and short enough to have no visible reaction. Furthermore, the issue of a merger has also been circulating before the announcement of the signingOriginality- This article examines abnormal returns before and after the announcement of the merger of State-Owned Sharia Banks

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“…The GSADF test extended the Supremum Augmented Dickey-Fuller (SADF) method (Phillips, Wu, & Yu, 2011) and examined multiple asset price bubbles. For instance, Liaqat, Nazir, Ahmad, Mirza, and Anwar (2020) employed the GSADF approach to detect the relationship between multiple stock bubbles in China and Pakistan. The Augmented Dickey-Fuller (ADF) test is based on Equation (1) (Dickey & Fuller, 1979), and the GSADF test statistic which based on the ADF test, shows as Equation ( 2):…”

Section: Detecting Multiple Price Bubblesmentioning

confidence: 99%

Do the Renminbi and Hong Kong dollar bubbles interact?

Cheng

et al. 2020

Int. J Fin Econ

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This paper applies the Generalized Supremum Augmented Dickey-Fuller (GSADF) approach to highlight the multiple exchange rate bubbles, and detect the interaction between Renminbi (RMB) and Hong Kong dollar (HKD) by logistic regression. The results illustrate that (I) there exists multiple bubbles in the RMB and HKD, and both shows the short-term period bubbles in the nominal exchange rates whereas performing the long-term period bubbles in the real exchange rates; (II) the exchange rate bubbles mainly existed during the financial crisis. The RMB bubbles occurred more in domestic financial crisis, while the HKD bubbles occurred in both domestic and international financial crisis; (III) there are interactions between bubbles in the RMB and HKD. Specifically, the bubbles in the nominal exchange rates of the RMB and HKD are reinforcing each other while the bubbles in the real exchange rates markets are mutually hedging; the nominal and real exchange rate market are mutually reinforcing regardless of the RMB or HKD. Furthermore, the strength of interactions between the RMB and HKD shows that the price of the HKD is more stable than that of the RMB.

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Do stock price bubbles correlate between China and Pakistan? An inquiry of pre‐ and post‐Chinese investment in Pakistani capital market under China‐Pakistan Economic Corridor regime

Cited by 3 publications

References 47 publications

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Individual Investments Biased by the Size of a Foreign Investor: An Experimental Study

Analysis of Abnormal Returns Before and After the Announcement of the Merger of State-Owned Sharia Banks

Do the Renminbi and Hong Kong dollar bubbles interact?

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