Testing the Random Walk Model on the Stock Returns of Firms Listed in the Damascus Securities Exchange


Abstract in English

This study aimed to examine the weak form efficiency of the Damascus Securities Exchange (DSE). The study used the monthly returns, adjusted for thin trading, of firms listed in the Damascus Securities Exchange from 2009 until 2014 and applied various tests to examine the random walk behavior in returns: the unit root test, the autocorrelation test, the runs test and the GARCH model. To take the impact of the Syrian crisis into account when judging the efficiency of the market, the study period was divided into three periods, the pre-crisis period, the crisis period and the whole period. The results revealed inability to reject the weak form efficient market hypothesis for more than half of the studied firms. Also it showed that the Syrian crisis, in general, has negatively affected the efficiency of most of the studied firms.

References used

ABBAS, G. 2014 Testing Random Walk Behavior in the Damascus Securities Exchange International Journal of Academic Research in Accounting, Finance and Management Sciences, Vol. 4, Issue 4, 12
ABRAHAM, A.; FAZAL J. and SULAIMAN A. 2002 Testing the Random Walk Behavior and Efficiency of the Gulf Stock Markets the Financial Review, Vol. 37, 469- 480
Al-AHMAD, Z. 2012 Testing the Weak Form Efficiency of the Damascus Securities Exchange International Research Journal of Finance and Economics, Euro Journals Publishing, ISSN 1450-2887, Issue 85, 12

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