IMPACT OF POLITICAL EVENTS ON EMERGING EQUITY MARKETS: THE CASE OF PAKISTAN

Abstract

In this paper we seek to examine the impact of political events on Pakistan's equity market using mathematical calculations rather than judgements. Questionnaires and interviews were used to collect data from historians economists politicians government officials bankers and stock market analysts in Pakistan. KSE100 index closing figures were extracted in order to monitor movements of stock market before during and after each event. As data is sparse several Bayesian hierarchical models and Markov Chain Monte Carlo (MCMC) techniques were used in the forecasts in order to overcome difficulties associated with obtaining conjecture within this framework.