A study on the relationship between the peso-dollar exchange rate and various Philippine stock indices

Date of Publication

1998

Document Type

Bachelor's Thesis

Degree Name

Bachelor of Science in Commerce Major in Management of Financial Institutions

College

Ramon V. Del Rosario College of Business

Department/Unit

Financial Management

Abstract/Summary

The purpose of this study has been to prove the existence or non-existence of a relationship between the Peso-Dollar exchange rate and the stock market performance. In addition, the proponents of the study wished to see whether the relationship is significant or not. The proponents also wanted to determine whether the Peso-Dollar exchange rate can be used as an alternative indicator for predicting stock market behavior. The proponents gathered daily data taken from the Philippine Stock Exchange and the Bangko Sentral ng Pilipinas. The different stock indices (PHISIX, Mining Index, Commercial and Industrial Index, Oil Index, Banking and Financial Services Index, Property Index and All Shares Index) were used as the various dependent variables while the Peso-Dollar exchange rate as the independent variable. The correlation coefficient (r) of the variables were taken and then subsequently subjected to t and z tests. For the entire time period covered by the study, a significant relationship between the dependent and independent variables was observed. The yearly breakdown also showed that for the most part, there is also a significant relationship between the dependent variables and independent variable. The relationship established is that, generally, currency depreciation would trigger a bearish trend in the stock market. Similarly, a currency appreciation would lead to a positive increase in the stock markets performance as denoted by the different indices. From the results thus gathered, the proponents of the study rejected the various null hypotheses in favor of the alternative hypotheses.

Abstract Format

html

Language

English

Format

Print

Accession Number

TU08866

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

55 numb. leaves

This document is currently not available here.

Share

COinS