Weak form efficiency in the thinly traded Pakistani stock market

Date

1996

Author

Ahmad, Wakaar
Erdem, İsmail

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In this article Karachi Stock Exchange (KSE) is examined to test the weak form of efficiency of the market. Data are composed of individual stock price values from KSE in the period January 1991 to July 1994. The empirical tests are performed to examine the independence and randomness of the price series of each stock. The test results showed that the individual stock prices do not conform to a random walk. By conducting a detailed analysis, it has been found out that the inefficiencies in KSE are mainly due to weak liquidity, the scarcity of accurate information, limited number of analysts and the content of analysis, insider trading and price manipulative practices, the price forming information not disseminated rapidly due to communication technology, and improper implementation of existing regulations.

URI

https://hdl.handle.net/11511/109531

Collections

Department of Economics, Article