Badla Financing, Stock Returns and Volatility: The Case Study of Karachi Stock Exchange

Abdul Rashid () and Shabbir Ahmad

MPRA Paper from University Library of Munich, Germany

Abstract: Using badla financing as a measure of leverage we examine both temporal and contemporaneous links among badla financing, stock returns and market volatility. We find that the market volatility is significantly and positively related to the change in badla financing and to past market returns. We also observe a significantly positive temporal causation between prior market returns and both badla financing as well as stock price volatility.

Keywords: Badla Financing; Stock Returns; Market Volatility; Call Money Rate; Exchange Rate (search for similar items in EconPapers)
JEL-codes: G14 (search for similar items in EconPapers)
Date: 2008-01-17
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Published in The Empirical Economics Letters 7.7(2008): pp. 733-740

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:30487

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