IMF Working Papers

Determinants of Stock Prices: The Case of Zimbabwe

By T. Oyama

September 1, 1997

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T. Oyama Determinants of Stock Prices: The Case of Zimbabwe, (USA: International Monetary Fund, 1997) accessed September 18, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the general relationship between stock prices and macroeconomic variables in Zimbabwe, using the revised dividend discount model, error-correction model, and multi-factor return-generating model. Despite the large fluctuation in stock prices since 1991, this analysis indicates that the Zimbabwe Stock Exchange has been functioning quite consistently during this period. Whereas sharp increases in stock prices during 1993-94 were mainly due to the shift of risk premium that was caused by the partial capital account liberalization, the recent rapid increase in stock prices can be explained by the movements of monetary aggregates and market interest rates.

Subject: Asset prices, Financial institutions, Financial markets, Financial services, Market interest rates, National accounts, Prices, Return on investment, Stock markets, Stocks

Keywords: Africa, APT, Asset prices, Break, CAPM, DDM, ECM, Formation process, IFC stock return index, Inflation rate, Interest rate, Interest rate liberalization, Market interest rates, Market liberalization policy, Return formation process, Return on investment, Risk exposure, Risk premium, Stock market return index, Stock markets, Stock price, Stock price index, Stock return formation process, Stock return index, Stock return movement, Stocks, WP

Publication Details

  • Pages:

    44

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1997/117

  • Stock No:

    WPIEA1171997

  • ISBN:

    9781451941616

  • ISSN:

    1018-5941