The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.

This research analyzes factors that influence stock investment by foreign investors,focusing on stock trading behaviors of foreign investors in the Asian emerging stock markets which are Thailand, South Korea, Taiwan, Philippines, India and Indonesia. The main objective of the study is to investigat...

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Main Authors: Sasi Sriwasuta, Rattakarn Komonrat, Pandej Chintrakarn
Other Authors: Mahidol University. Mahidol University International College. Business Administration Division
Format: Article
Language:English
Published: 2015
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Online Access:https://repository.li.mahidol.ac.th/handle/123456789/10547
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Institution: Mahidol University
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spelling th-mahidol.105472023-04-12T15:24:17Z The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia. Sasi Sriwasuta Rattakarn Komonrat Pandej Chintrakarn Mahidol University. Mahidol University International College. Business Administration Division Emerging Markets Foreign Investor Stock Market This research analyzes factors that influence stock investment by foreign investors,focusing on stock trading behaviors of foreign investors in the Asian emerging stock markets which are Thailand, South Korea, Taiwan, Philippines, India and Indonesia. The main objective of the study is to investigate a relationship between stock trading behaviors of foreign investors in the Asian emerging markets and changes in the MSCI Index, a benchmark developed for investors around the world to use as a standard in measuring investment returns in different regions. In this study, MSCI North America, which indicates market conditions of major stock markets in North America, has been adopted. The relationship may exist due to the role of international funds, especially an increasing size & number the Hedge Fund in the global financial system. Therefore the relationship between stock trading behaviors of foreign investors in the Asian emerging markets and changes in the MSCI Index can be explained by the fact that foreign investors need to sell stock in emerging markets after they sustain losses from their investments in major markets to compensate the lack of liquidity. On the contrary, foreign investors resume their investments in the Asian emerging markets when their accumulated returns in major markets are positive. Analyses by two econometrics models show that changes in accumulated returns of MSCI North America statistically influence trading behaviors of foreign investors in emerging markets in terms of net foreign outflow on the following day and the probability to sell stock in several countries in the emerging markets simultaneously on the following day. In other words, if the accumulated returns of MSCI North America are highly negative, the net foreign outflow in emerging markets will be highly positive (model 1) or the probability of investors selling stock simultaneously in many countries (model 2) on the following day will be high. In contrast, if the accumulated returns of MSCI North America are highly positive, the net foreign inflow in emerging markets will be highly positive (model 1) or the probability of investors buying stock simultaneously in many countries (model 2) on the following day will be high.Findings show that changes in market conditions of major stock markets influence stock trading behaviors of foreign investors on Asian emerging markets. 2015-09-07T08:46:41Z 2018-04-17T14:36:31Z 2015-09-07T08:46:41Z 2018-04-17T14:36:31Z 2015-09-07 Article BU Academic Review. Vol.10, No.1 (2011), 235-247 https://repository.li.mahidol.ac.th/handle/123456789/10547 eng Mahidol University
institution Mahidol University
building Mahidol University Library
continent Asia
country Thailand
Thailand
content_provider Mahidol University Library
collection Mahidol University Institutional Repository
language English
topic Emerging Markets
Foreign Investor
Stock Market
spellingShingle Emerging Markets
Foreign Investor
Stock Market
Sasi Sriwasuta
Rattakarn Komonrat
Pandej Chintrakarn
The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.
description This research analyzes factors that influence stock investment by foreign investors,focusing on stock trading behaviors of foreign investors in the Asian emerging stock markets which are Thailand, South Korea, Taiwan, Philippines, India and Indonesia. The main objective of the study is to investigate a relationship between stock trading behaviors of foreign investors in the Asian emerging markets and changes in the MSCI Index, a benchmark developed for investors around the world to use as a standard in measuring investment returns in different regions. In this study, MSCI North America, which indicates market conditions of major stock markets in North America, has been adopted. The relationship may exist due to the role of international funds, especially an increasing size & number the Hedge Fund in the global financial system. Therefore the relationship between stock trading behaviors of foreign investors in the Asian emerging markets and changes in the MSCI Index can be explained by the fact that foreign investors need to sell stock in emerging markets after they sustain losses from their investments in major markets to compensate the lack of liquidity. On the contrary, foreign investors resume their investments in the Asian emerging markets when their accumulated returns in major markets are positive. Analyses by two econometrics models show that changes in accumulated returns of MSCI North America statistically influence trading behaviors of foreign investors in emerging markets in terms of net foreign outflow on the following day and the probability to sell stock in several countries in the emerging markets simultaneously on the following day. In other words, if the accumulated returns of MSCI North America are highly negative, the net foreign outflow in emerging markets will be highly positive (model 1) or the probability of investors selling stock simultaneously in many countries (model 2) on the following day will be high. In contrast, if the accumulated returns of MSCI North America are highly positive, the net foreign inflow in emerging markets will be highly positive (model 1) or the probability of investors buying stock simultaneously in many countries (model 2) on the following day will be high.Findings show that changes in market conditions of major stock markets influence stock trading behaviors of foreign investors on Asian emerging markets.
author2 Mahidol University. Mahidol University International College. Business Administration Division
author_facet Mahidol University. Mahidol University International College. Business Administration Division
Sasi Sriwasuta
Rattakarn Komonrat
Pandej Chintrakarn
format Article
author Sasi Sriwasuta
Rattakarn Komonrat
Pandej Chintrakarn
author_sort Sasi Sriwasuta
title The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.
title_short The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.
title_full The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.
title_fullStr The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.
title_full_unstemmed The Determinant of stock investment by foreign investors : a case study of emerging stock markets in Asia.
title_sort determinant of stock investment by foreign investors : a case study of emerging stock markets in asia.
publishDate 2015
url https://repository.li.mahidol.ac.th/handle/123456789/10547
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