Stock Returns and The Weather Effect: the Case of Ghana

Abstract

In every economy, Stock markets are part of the key elements the build it up. A few decades ago, there has been a significant change in Ghana stock market returns (GSE). Our study examines the statistical and economic significance of investor sentiment, based on weather conditions/changes, on stock market returns. OLS models, assisted by unit root tests were employed in analyzing the data obtained from the Ghana stock exchange platform from 2000 to 2017. From our literature review, we discovered that investors’ perceptions play a central role in finalizing the direction of stock market returns. Regarding our empirical results, we tested whether weather variations influence the investment decisions of investors; we discovered that temperature and cloud cover significantly influences stock market returns. This is because of mood changes is associated with weather conditions variations. However, sunshine per our regression coefficient shows a statistically insignificant impact on investors’ investment choices. Precipitation to a large extend influence stock market activities further affecting its results negatively as our regression results depicted. We concluded stock brokerage firms, companies, and investors (foreign/local) must incorporate weather changes/effects when strategizing about their investment outcomes.

Trend Analysis of Exchange Rate of the Ghana Cedi against the US Dollar Using Time Series

“…Nevertheless, the two systems were combined in February 1987. It was decided to use the dual-retail auction, which was based on marginal price [9]. The Dutch auction, a second auction format, was created, and under it, winning bidders were required to pay the bid amount.…”

“…They are now able to provide their consumers with foreign exchange, subject to a margin decided by each approved dealer. In April 1992, the inter-bank market was introduced to replace the wholesale auction system, which has become a competitive platform for Commercial and the Forex Bureau [9]. Since 1986, the Bank of Ghana has adopted the managed floating exchange rate as the preferred method of determining exchange rate.…”