Despite increased co-movements in stock performance among developed economies, international portfolio investors have failed to diversify into African stock markets. Is the persistence of home bias in equities due to a possibility that African markets move in tandem with the rest of the world? This paper investigates linkages between the Ghanaian equity market and the world's major markets using co-integration and error correction analyses. There is no evidence of linkages between the Ghanaian equity market and the world major equity markets. Results are conclusive for both short and long run relationships. Ghana therefore offers the potential for international portfolio investors.
This paper has analyzed whether the size and the book-to-market equity effects are present on the Stock Exchange of Mauritius (SEM), using the Fama and French (1993) model. The empirical results confirm that both effects are present and statistically significant. The model also explains the variation in stock returns on the SEM much better than the Capital Asset Pricing Model. For some portfolios, the increase in explanatory power was four-fold. The paper cautions against using beta as the only measure of systematic risk, for calculating the cost of capital and evaluating the performance fund managers.
The paper investigates both the long run and the short run relationships
between the Ghana stock market and macroeconomic variables. The paper
establishes that there is cointegration between the macroeconomic variables
and Ghana stock market. The results of the short run dynamic analysis and the
evidence of cointegration mean that there are both short run and long run relationships between the macroeconomic variables and the index. In terms of
Efficient Market Hypothesis (EMH), the study establishes that the Ghana stock
market is informationally inefficient particularly with respect to inflation, treasury bill rate and world gold price.
To increase and attract private investments on research and technology development, whether through acquisition or greenfield for production of value-added and technology-intensive products, fiscal tax policies have to be reformed. This article surveys recent trends in tax incentive policies in some of the developed countries and argues that there are good lessons for Africa to learn. Therefore, through NEPAD initiatives, tax incentives for promoting scientific, technological and innovation activities to improve production and competitiveness should be given a higher priority by African governments and relevant institutions, in order to stimulate both domestic and foreign direct investments in the industrial sector.