An empirical study on weak market efficiency of Karachi Stock Exchange

Authors

Jaihan Zulqarnain, National Defense University, Islamabad
Syed Muhammad Amir Shah, Allama Iqbal Open University, Islamabad

Abstract

A lot of research has been conducted to check whether the Frontier and emerging markets show weak form of efficiency or follow a random walk. Karachi Stock Exchange, being a frontier market, was tested on the basis of daily closing values from 2006 to 2011. The study showed KSE to be a weak form inefficient market following non randomness. Three tests were applied on the data. KSE proved to have a unit root, the values in the series showed a strong correlation. Moreover, a Z-statistic value was far greater than 1.96 which proved KSE to be an inefficient market. Inefficient markets have several implications for international as well as local investors.

Keywords

Karachi Stock Exchange, Investment, Emerging markets

DOI

https://doi.org/10.54784/1990-6587.1217

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Recommended Citation

Zulqarnain, J., & Shah, S. (2013). An empirical study on weak market efficiency of Karachi Stock Exchange. Business Review, 8(1), 77-84. Retrieved from https://doi.org/10.54784/1990-6587.1217