• ISSN(P) : 2708-2474
  • ISSN(E) : 2708-2482
  • ISSN(L) : 2708-2474

Article

 

Petroleum and Food Sectors Lost Stock Returns against Investments in PSX

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Abstract

The impact of exchange rate exposure and market return on stock returns of petroleum and food sectors PSX listed firms has been investigated empirically. Two econometric models formulated based on the Jorion approach of the two-factor model have been analyzed for petroleum and food sectors stock returns, market return and exchange rate (i.e., USD) for the study period 2005-2012, which represent an era of military regime proceeded by the democratic government of Pakistan Peoples Party. A sample of 37 petroleum and food sectors listed firms have been evaluated by applying the unit root test and OLS multiple regression. Further, the Quandt-Andrews test of unknown breakpoint has been applied, which showed an extended structural break during the period 2007 to 2010. Additionally, the results revealed that the coefficients of exchange rate and market return are negatively related to petroleum and food sectors stock returns. Therefore, investors must take precautions before investing funds in stocks of food and petroleum sector firms.

Authors

1-Syed Muhammad Ali Tirmizi
Associate Professor, Department of Business Administration, Faculty of Management Sciences, Foundation University Islamabad, Pakistan.

2-Haider Ali
CEO Impex Pakistan, The Mall, Wah Cantt., Punjab, Pakistan.

3-Sharif Ullah Jan
Lecturer, Department of Management Sciences, FATA University, FR Kohat, KP, Pakistan.

Keywords

Petroleum Sector, Food Sector, Stock Returns, Exchange Rate Exposure, Market Return

DOI Number

10.31703/gmsr.2021(VI-I).10

DOI Link

http://dx.doi.org/10.31703/gmsr.2021(VI-I).10

Page Nos

99-111

Volume & Issue

VI - I


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

Published: Mar 2021

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