Abstract
This research attempts to investigate the effects of changes in interest rates (IR) and foreign exchange rates (FX) on bank stock returns (BSR) in the context of Kenya. Further, it will investigate the effects of actual interest and exchange rates on bank stock returns. In addition, this study explores the impact of the 2007-08 election violence in Kenya on these relationships. Both short- and long-term interest rates will be used in this study. By applying the ordinary least squares (OLS) regression method, this study will test whether changes in IR and FX are negatively or positively related to BSR, as well as the significance of their relationship to BSR. This will be tested together with the effect of inflation rates on them. In order to capture the effect of the 2007-08 election violence in Kenya, the significance of IR and FX before and after the election period will be evaluated with regard to their effect on BSR.
| Original language | English |
|---|---|
| Title of host publication | Handbook of Frontier Markets: The African, European and Asian Evidence |
| Editors | Panagiotis Andrikopoulos, Greg N. Gregoriou , Vasileios Kallinterakis |
| Publisher | Academic Press |
| Chapter | 5 |
| Pages | 71-92 |
| Number of pages | 22 |
| Volume | 1 |
| Edition | 1st |
| ISBN (Electronic) | 9780128038406 |
| ISBN (Print) | 9780128037768, 0128037768 |
| Publication status | Published - 2 Aug 2016 |
Keywords
- Bank stock returns
- Exchange rates
- Inflation
- Interest rates