EconPapers    
Economics at your fingertips  
 

Global commodities and African stocks: A ‘market of one?’

Gideon Boako and Paul Alagidede ()

International Review of Financial Analysis, 2016, vol. 44, issue C, 226-237

Abstract: Owing to frequent fluctuations in global markets, diversifying across emerging markets is increasingly becoming a necessity. Despite this, a cloud of uncertainty surrounds the relative capacities of emerging markets to provide the required shields for international investors, especially during extreme market conditions. In this paper, we explore the relative potentials of African equities to provide opportunities for hedging and diversification for global commodity investors by using data of daily periodicity on close-to-close basis from January 3, 2003 to December 29, 2014. The findings indicate the presence of non-linear relationships between some African stocks and returns on global commodities. Thus, global commodity market investors react differently towards investment potentials in African stocks during tranquil and crisis periods. Additionally, from the mean–variance stand-point, we observe that including African equities in a diversified portfolio has the effect of lowering risk whiles simultaneously increasing expected returns. However, any such investment strategies may have to be informed by volatility persistence, as well as past and present market conditions.

Keywords: African stocks; Global commodities; Diversification; Mean–variance; Hedging (search for similar items in EconPapers)
JEL-codes: G10 G11 G15 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521916300175
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:44:y:2016:i:c:p:226-237

DOI: 10.1016/j.irfa.2016.02.009

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2021-01-04
Handle: RePEc:eee:finana:v:44:y:2016:i:c:p:226-237