The impact of macroeconomic variables on industrial shares listed on the Johannesburg Stock Exchange

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Authors

Banda, Kamoto
Hall, J.H. (John Henry)
Pradhan, Rudra P.

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Publisher

Routledge

Abstract

This paper aims to address the absence of research on the relationship between macroeconomic variables (aggregate economic output, inflation, interest rates and exchange rates) and industrial shares in developing countries. The Industrial Index (INDI 25) on the Johannesburg Stock Exchange (JSE) was analysed using data from 1995 to 2017. The results show that inflation has a significant positive relationship with stock prices. However, a negative relationship was found between interest rates and stock prices. In this period, exchange rates had a positive effect on industrial shares, but no relationship was identified between industrial shares and the gross domestic product (GDP).

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Keywords

Gross domestic product (GDP), Stock price, Industrial Index (INDI 25), Johannesburg Stock Exchange (JSE), Prime interest rate, Exchange rate

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Citation

Kamoto Banda, John Henry Hall & Rudra P. Pradhan (2019) The impact of macroeconomic variables on industrial shares listed on the Johannesburg Stock Exchange, Macroeconomics and Finance in Emerging Market Economies, 12:3, 270-292, DOI: 10.1080/17520843.2019.1599034.