Impact of Market Risk, Interest rate, Exchange rate on Banks stock return: Evidence from listed Banks of Pakistan
Published 2019-08-31
Keywords
- Banking stock price, OLS, market risk, Exchange rate, interest rate
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Abstract
The main purpose of this research is to find the relationship between market risk, Exchange rate, Interest rate, and bank stock returns in Pakistan. The KSE-100 index used as Market risk, US dollar against Pak rupees used as Exchange rate, three-month T-bill rate used as the interest rate and the continuously compounded return used as banks stock return. The time-series data from January 2007 to December 2018 is used in this study. The ordinary least square (OLS) method is used to check the relationship between bank stock return, market risk, interest rate, and Exchange rate. The result of this shows that market risk is positively significant, exchange rate rarely negatively significant, and the interest rate insignificant exempt of one bank. When the prices of the stock market are increasing the bank stock prices also increase. These empirical findings are helpful for the policymaker, investor, banking management as well as Government.
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References
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