Weak form efficiency and factors leading to market efficiency in the Kuwait stock market
A small stock market may be less efficient in the weak sense thana large one, because it is often less elaborately organisedtechnically. Hence, information about stock price formation mayspread only gradually through the financial community.Consequontly, stock prices may display e greeter degree of nonrandomnessbecause traders are unable to eliminate this.The objective of the study is to test the weak form efficiency inKuwait Stock Exchange, a segment of the Kuwait Long Term capitalmarket. In addition, the study explores the impact of several.factors on market efficiency.In Chapter One the role of the stock market and its relationshipto the economy will be discussed. The efficient market hypothesisis explored in Chapter Two.Chapter Three is devoted to surveying the empirical findings ofother researchers in UK, USA and some other internationalmarkets. A number of authors have applied the efficient markethypothesis to actual stock market data, especially in the lasttwenty years. Some critical analyses are discussed in ChapterFour. The empirical question of the relations between marketefficiency and stock valuation is explored in Chapter Five. Anefficient market should price the security, so as to fullyreflect the firms earning power. The uncertainty surrounding thestream of future income clouds this issue and has prompted debateamong economists and financial analysts as to how the marketvalues a given stock at any time.The characteristic of Kuwait Stock Exchange are the subject ofChapter Six. Chapter Seven presents empirical findings on thebehaviour of Kuwait Stock Exchange in the context of efficientmarket theory. These findings will be compared with thoserelated studies based on data from the United States and Europe.Chapter Eight will discuss the Kuwait Gulf Stock Exchange (over-the-counter market) or Al-Manakh. The 1982 crash of Al-Manakh isexplored in depth in Chapter Nine and some of the importantsolutions will be discussed.In Chapter Ten the discussion Focusses on the three hypothesisedFactors leading to market efficiency (market information,governmental rules and regulations, and market supportfacilities).Finally, in Chapter Eleven, general conclusions are drawn andrecommendations presented with suggestions for further research.
Year of publication: |
1989
|
---|---|
Authors: | Al-Shamali, Mansour |
Publisher: |
Mansour Al-Shamali |
Subject: | International commerce | International trade |
Saved in:
freely available
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