The Impacts of Foreign Portfolio Flows and Monetary Policy Responses on Stock Markets by Considering COVID-19 Pandemic: Evidence from Turkey

Kartal, Mustafa Tevfik; Ertuğrul, Hasan Murat; Ulussever, Talat

doi:10.2139/ssrn.3877934

Cited by 3 publications

(3 citation statements)

References 40 publications

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“…Monetary policy also affects stock returns, as the expansionary policy shore up the growth and development, whereas tightened policy has a negative impact. Further, most of the countries also used monetary policy tools to handle the pandemic situation (Kartal et al, 2021). Moreover, a study on the association between macroeconomic variables and the stock market showed that money supply has a direct relationship with the stock prices in the Lithuanian market (Pilinkus & Boguslauskas, 2009).…”

Section: Money Supply Fdi and Stock Returnmentioning

confidence: 99%

“…Stock markets are also affected due to flows of foreign portfolios, especially in a pandemic situation. All countries are affected due to pandemic but the developing and emerging countries are more affected due to their dependence on FDI (Kartal et al, 2021).…”

Section: Money Supply Fdi and Stock Returnmentioning

confidence: 99%

“…In order to handle the adversities of the pandemic and its impact on the economy, countries have taken various measures including social distancing, lockdowns as well as vaccination drive (Kartal, Ertuğrul, & Ulussever, 2021). Due to the uncertainty in the business arena and lack of clear visibility, the choices of investment decisions are extremely dicey.…”

Section: Introductionmentioning

confidence: 99%

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COVID-19 Entwined the Dynamic Relationship between Stock Returns and Macroeconomic Variables

Malik

Butt

Aziz

2022

IMBR

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This study examines the dynamic relationship between macroeconomic variables and stock prices in Pakistan in the COVID-19 pandemic scenario. For this purpose, monthly data has been taken from Jan 2019 to June 2021 and divided into Pre-COVID, COVID and overall periods. Data have been retrieved from various sources including Statistical Reviews & Bulletins of State Bank of Pakistan, Karachi Stock Exchange and Pakistan Economic Survey. To assess the relationship between economic variables and stock prices, Cointegration, Granger-causality and Impulse Repose Function Tests have been applied on three data series. The results of the study reveal that there is a long-term equilibrium relationship between all economic variables and stock prices in the Pre-COVID period. However, most of the economic variables do not have such a relationship during the COVID period and the pattern of the relationship is almost the same in the overall period. Even the short-run dynamic relationship between economic variables and stock returns is affected by the pandemic. The results show that economic variables affect stock returns differently in the COVID situation than in the Pre-COVID scenario and it also affects the short-run relationship in the overall period. This research study provides imminent findings on the linkage between macroeconomic variables and stock prices in the Pakistani context. It helps investors and regulators in customizing their decisions and macroeconomic regulations respectively to improve the financial and economic stability of the country in the wake of the pandemic.

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Section: Money Supply Fdi and Stock Returnmentioning

confidence: 99%

Section: Money Supply Fdi and Stock Returnmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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COVID-19 Entwined the Dynamic Relationship between Stock Returns and Macroeconomic Variables

Malik

Butt

Aziz

2022

IMBR

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Turkish Stock Market from Pandemic to Russian Invasion, Evidence from Developed Machine Learning Algorithm

Alsayed

2022

Comput Econ

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In recent time, the two significant events; Coronavirus epidemic and Russian invasion are effecting all over the world in various aspects; healthily, economically, environmentally, and socially, etc. The first event has brought uncertainties to the economic situation in most countries based on the epidemic transmission. In addition to that, on 24th February 2022 the Russian invasion of Ukraine affected negatively almost all stock markets all over the world, but the effects are heterogeneous across countries according to their economic-political relationship or neighbourhood, etc. Due to that, the stock market price in Turkey has been affected dramatically over that period. This empirical study is the first attempts to explore the impact of Coronavirus epidemic and Russian invasion on the stock market index XU100 in Turkey by applying the developed statistical method namely elastic-net regression based on empirical mode decomposition which can precisely tackle the nonstationary and nonlinearity data. Then we performed the robustness check by applying a nonlinear techniques Markov switching regression. The data are collected from the beginning of the epidemic in Turkey from March 11, 2020 until May 31, 2022. The finding reveals that there is significant effect of the Coronavirus spreading on the Turkish stock market index, particularly during the first wave. Then after the Russian Invasion the XU100 index is effected more negatively. As the credit default swap and TL reference interest rate have a negative impact but the foreigner exchange rate has a positive significant impact on the XU100 index, and it varies according to the period of short term and long term. Moreover, the results obtained by using the robustness check shows a robust and consistent finding. In conclusion, understanding the impact of Coronavirus pandemic and Russian invasion on the Turkish stock market can provide important implications for investors, financial sectors, and policymakers.

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Impact of money supply and macroeconomic indicators on foreign portfolio investment: Evidence from Vietnam

Thi Dieu Chi

2023

Banks and Bank Systems

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This study examines the relationship between money supply, macroeconomic indicators, and foreign portfolio investment in Vietnam. Using the Autoregressive Distributed Lag Model and Stata 17 software to analyze quarterly data from Q1/2007 to Q4/2022, the analysis reveals strong and enduring correlations. An increase in money supply and economic growth positively influences foreign portfolio investment, with the money supply from the previous quarters significantly impacting foreign portfolio investment (P-value &lt; 0.01). However, foreign exchange rates and foreign direct investment negatively affect foreign portfolio investment. Three macroeconomic indicators show significance at 1% and 5%, where gross domestic product positively affects foreign portfolio investment, while foreign exchange rates and foreign direct investment have detrimental impacts. The findings indicate that a 1% increase in gross domestic product leads to a USD 50.426 million increase in foreign portfolio investment, while a USD 1 million increase in foreign direct investment results in a USD 0.025 million decrease. Foreign exchange rates significantly affect foreign portfolio investment, with the potential for reduction through VND devaluation or an increase in the VND/USD exchange rate due to government adjustments. Definitive conclusions about external debt, interest rates, and inflation require additional data and research. The study’s R-squared value is 0.2738, with an adjusted R-squared of 0.1813, explaining 27.38% of future changes in Vietnam’s foreign portfolio investment. These findings have important implications for policymakers, suggesting that expanding the money supply and implementing suitable interest rate policies could enhance foreign portfolio investment attractiveness in the nearest term. AcknowledgmentThe author would like to thank the board of editors and the anonymous reviewers for their time and suggestions, which were most helpful in improving this article.

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The Impacts of Foreign Portfolio Flows and Monetary Policy Responses on Stock Markets by Considering COVID-19 Pandemic: Evidence from Turkey

Cited by 3 publications

References 40 publications

COVID-19 Entwined the Dynamic Relationship between Stock Returns and Macroeconomic Variables

COVID-19 Entwined the Dynamic Relationship between Stock Returns and Macroeconomic Variables

Turkish Stock Market from Pandemic to Russian Invasion, Evidence from Developed Machine Learning Algorithm

Impact of money supply and macroeconomic indicators on foreign portfolio investment: Evidence from Vietnam

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