Rising Borsa Istanbul Trading amid 2023 Inflation Sparks Concerns of Stock Market Bubbles?

Islem Benzeghiba

Abstract


 

This study delves into the detection of speculative bubbles in Borsa Istanbul, highlighting the limitations of monthly observations and the critical role of weekly data in capturing market nuances. Utilizing the Sup Augmented Dickey Fuller Test (SADF) and Generalized Sup Augmented Dickey Fuller Test (GSADF), the research contrasts the efficacy of monthly and weekly data in identifying speculative tendencies through the price-dividend ratio. Initially, the study portrays potential speculative trends marked by significant increases in investor activity, trading volume, and the BIST 100 index. However, contrary to the early indicators suggesting the formation of a speculative bubble, the empirical analysis for 2023 reveals no definitive evidence of bubbles in the price-dividend ratio. The study emphasizes that while monthly data may signal potential market irregularities, it falls short of capturing transient yet significant speculative episodes, essential for making informed investment decisions in the volatile environment of Borsa Istanbul, emphasizing the indispensable nature of weekly data in detecting nuanced market behaviors. The study underlines the need for a layered, temporally sensitive approach to financial analysis, advocating for continuous adaptation and sophistication in methodologies to navigate the complexities of financial markets effectively.


Keywords


Speculative Bubbles; Price-dividend ratio; GSADF; Turkey;BIST 100 index;Borsa Istanbul;Financial markets

Full Text:

6.Benzeghiba


 

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International Journal of Commerce and Finance is licensed under a Creative Commons Attribution-NonCommercial-4.0 International (CC BY-NC 4.0) License.
 

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