Stock Return, Currency and General Elections
The association between political elections and stock market performance for Malaysia market is discussed in this paper. This study aims to investigate the impact of General Elections in Malaysia on stock market indices. To provide additional support of the impact of general elections on stock re...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Universiti Putra Malaysia Press
2015
|
| Subjects: | |
| Online Access: | http://eprints.intimal.edu.my/536/ http://eprints.intimal.edu.my/536/1/Stock%20Return%2C%20Currency%20and%20General%20Elections.pdf |
| Summary: | The association between political elections and stock market performance for Malaysia
market is discussed in this paper. This study aims to investigate the impact of General
Elections in Malaysia on stock market indices. To provide additional support of the impact
of general elections on stock returns through other channels, currency changes were also
included in this study so as to discover the mediation effect of the exchange rate on the
relationship between general elections and stock returns. Since the exchange rate does,
to some extent, influence stock return, the relationship between exchange rates and stock
returns during different stages of a general election cannot be overlooked. The results
showed that currency change is negatively related with stock returns in pre-election and
post-election stages, but it is not significant during the election period. The impact of
currency on stock return exists as a mediation effect during election period. In a nutshell,
the currency change directly impacts stock return with a negative influence. However,
the direct relationship between currency and stock return disappears during the election
week. Thus, stock return is affected by currency change indirectly |
|---|