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Stock return, currency and general elections


Citation

Ong, Tze San and Soh, Wei Ni and Teh, Boon Heng and Ng, Sin Huei (2015) Stock return, currency and general elections. Pertanika Journal of Social Science & Humanities, 23 (spec.). pp. 237-250. ISSN 0128-7702

Abstract

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.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Universiti Putra Malaysia Press
Keywords: General election; Stock return; Currency; Mediation effect
Depositing User: Nida Hidayati Ghazali
Date Deposited: 09 Mar 2018 07:39
Last Modified: 09 Mar 2018 07:39
URI: http://psasir.upm.edu.my/id/eprint/46386
Statistic Details: View Download Statistic

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