The Stock Exchange of Singapore : An Economic Analysis

Abstract

Financial markets play an important role in an economy. In recent years the rapid growth of equity markets in emerging economies has attracted the attention of researchers, policy makers and financial planners. Due to competitive rates of return and overall benefits for portfolio diversification the emerging markets are considered to be an attractive source of investment opportunity for foreign investors. The emerging stock markets of NDCs attract the attention of many researchers due to fast economic growth of these countries and the high returns of these stock markets. However, the Asian financial crisis which started in 1997 has badly affected most of these countries since financial markets are highly integrated with each other. Although many researchers have examined the different aspects of the SES it is hard to find any research that examine the stock market anomalies, stock market volatility and the integration of the SES with stock markets of other NDCs taking into account the effects of the 1997 Asian financial crisis. Therefore, this study attempts to fill this gap in knowledge by providing a comprehensive investigation of the behavior of the SES including the effects of the 1997 Asian financial crisis on stock market anomalies, stock market volatility and stock markets integration. Hence, this study has significant contribution to the financial market literature as well as the findings of this study provide useful information for policy makers to implement new policies and investors to allocate their portfolio efficiently.