Browsing by Author "Isma Rasheed"

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    Does Hot Money Drive Pakistan’s Capital and Real Estate Market? A case from Pakistan
    (UMT,Lahore, 2017-12) Isma Rasheed
    The primary purpose of this study is to examine the impact of hot money on major economic markets of Pakistan such as stock market, and real estate market. Hot money or speculative cash inflow is generally associated with higher volatility. It can create financial bubbles. Particularly in emerging economies, hot money or speculative cash inflows are considered as major influential factor on these major markets. In order to ascertain the evidence of underlying facts we have used hot money as dependent variable and two major economic indicators KSE_100 and Housing price as independent variable. Sharp Ratio and policy rate are taken as control variable. Monthly data is collected from January 2011 to December 2016. To determine the impact of hot money on these economic markets robust time series techniques such as Augmented Dickey-Fuller test, JJ co integration, Granger causality, Impulse response function and Variance decomposition tests are applied. Test results indicate that hot money has marginal influence to explain volatility in real estate and capital market of Pakistan. Our economic conditions affect the behavior pattern of investors. Study results also depict a very little contribution of short term speculative funds for these two markets. The volatility and rise in these two markets may be the cause of GDP growth, bank lending’s, rural-urban migration and urbanization. There might be a functional role of terrorism, peace conditions in Pakistan, political instability; higher level of remittances, family owned business set up of Pakistan can be the reason of marginal influence of hot money in Pakistan.