Corporate Hedging and Stock Market Dynamics: Evidence from PSX

Ahtisham Imtiaz, Aqueel Imtiaz Wahga, Syed Fakher Abbas Zaidi and Safyan Majid
Additional contact information
Ahtisham Imtiaz: Relationship Manager, National Bank of Pakistan
Aqueel Imtiaz Wahga: Assistant Professor, Department of Economics, Government College University, Lahore, Pakistan
Syed Fakher Abbas Zaidi: Business Consultant, STEDEC Technology, Pakistan
Safyan Majid: Assistant Professor, Department of Commerce and Finance, Government College University, Lahore, Pakistan

Bulletin of Business and Economics (BBE), 2023, vol. 12, issue 3, 580-586

Abstract: The purpose of the paper is to examine the impact of corporate hedging practices such as derivative usage on stock market behavior of the firms. The study employed the data of financial sector of Pakistan for firms that are listed in the Pakistan Stock Exchange. The economy of Pakistan faced several challenges and risk during the past five years such as Covid-19, climate change, political uncertainty, and economy policy uncertainty. Hence, it provided a solid ground to investigate the viability of derivative usage in the adverse economic environment. The sample consisted of 111 firms. The results indicated that hedging has significant impact on stock returns and stock returns volatility. The study concludes that firms that use derivative can yield positive stock returns and influence volatility in returns

Keywords: Derivative; Stock Returns; Stock Volatility; Hedging (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bbejournal.com/BBE/article/view/564/439 (application/pdf)
https://bbejournal.com/BBE/article/view/564 (text/html)

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:rfh:bbejor:v:12:y:2023:i:3:p:580-586

DOI: 10.61506/01.00072

Access Statistics for this article

Bulletin of Business and Economics (BBE) is currently edited by Dr. Muhammad Irfan Chani

More articles in Bulletin of Business and Economics (BBE) from Research Foundation for Humanity (RFH) Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Muhammad Irfan Chani ().