The relationship between economic activity and stock market perfomance: evidence from South Africa
Date
2017
Authors
Mda, Camngca Kholosa
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Abstract
The relationship between real economic activity and stock market performance is one that
has been extensively researched throughout many decades, across many economies. Many
issues and debates have stemmed involving this relationship, with the major ones including
those of the significance of the relationship, nature of the relationship as well as causality
and direction of causality within the relationship. This research paper examines this
relationship within the South African context, comparing the pre and post 2008 global
financial crisis periods. Results both in support of and contrary to theory were found as real
economic activity had an immediate postitive response to shocks imposed on the stock
index, whilst the stock index had an immediate negative response to shocks imposed on real
economic activity. Through the use of granger causality testing, no causality was found in
either direction. Furthermore, no major differences were noted between the pre and post
crisis periods.
Description
A research report submitted to the Faculty of Commerce, Law and
Management, University of the Witwatersrand, Johannesburg,
In partial fulfilment of the requirements for the degree of
Master of Management
(Finance and Investment Management),
2016
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Citation
Mda, Camngca Kholosa (2017) The relationship between economic activity and stock market perfomance: evidence from South Africa, <https://hdl.handle.net/10539/23788>