THE EFFECTS OF DEMUTUALIZATION ON EXPANSION OF STOCK MARKET GROWTH: EVIDENCES FROM INDIAN STOCK MARKET AND LESSON FOR PAKISTAN STOCK EXCHANGE (PSX)

Abdul Wahid, Iftikhar Hussain Adil, Nadeem Talib, Kamran Azam


DOI: http://dx.doi.org/10.22555/pbr.v19i3.1646

Abstract


The decision to transform an exchange’s governance and
ownership structure is influenced by globalized market trend which
allows exchanges to gain from the benefits of internationalization
and integration. This article examines the impact of
demutualization on stock market indicators. Bombay Stock
Exchange and National Stock Exchange of India were taken as
statistical frame. Wilcoxon sign rank test, Pair sample T-test, and
MANOVA were used as statistical techniques. Pre-Post research
design was used and data (4 years before and 4years after the
demutualization) were collected from the website of the world
federation of the exchanges. The result of Wilcoxon sign rank test
and Pair sample T-test indicates significant differences in stock
index, market capitalization, value of share trading and the number
of listed companies before and after the demutualization of Indian
stock exchanges. Likewise, the results of MANOVA elucidates
significant influence of demutualization on stock market indicators,
and conclude that demutualization leveraged Indian stock
exchanges to a great extant.


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