Highlighting the Dynamics of the Game-Changer: Empirical Evidence from Stock Markets of the Key Players

Asra Khan, Nawaz Ahmad, Nimra Sharif

Abstract


China Pakistan Economic Corredore (CPEC), a predictive game-changer, was perceived to bring favourable changes in the economy of both its players. It was claimed that a boost shall be seen in each sector of the economy especially for Pakistan. Highlighting this key assumption, this study attempts to conduct a comparative analysis of PSX and Shanghai returns for pre and post announcement of CPEC. The time-series data of the two indices i.e. PSX-100 and Shanghai Stock Exchange Composite Index (SHCOMP) is selected ranging from 4th January 2010 to 2nd January 2019. The comparative analysis of both the economy indicates significant difference t(2220.237) = 2.872, p = 0.004 before CPEC-announcement and this difference becomes insignificant post-CPEC announcement t(1654.132) = 0.315, p = 753. Whereas, individual analysis of returns of both the economies indicated a significant change for PSX-100 t(1038) = 2.050, p = 0.041 but for SHCOMP this change is not significant t(1008) = -0.697, p = 0.486. The findings of the study reflect the potentials of CPEC to bring changes in Pakistani Stock market than a mature market of China.


Keywords


Game-changer, CPEC, PSX-100, SHCOMP, Stock Returns

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References


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DOI: http://dx.doi.org/10.22555/ijelcs.v4i2.3151

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