Abstract
In this paper, we explore the dynamic relationship between aggregate foreign equity inflows and aggregate liquidity of the Kenyan stock market using transactional foreign trading data and several liquidity measures. We employ vector auto regression with monthly gross foreign inflows, local stock market liquidity and returns over the period 2011–2018. We discover a one- way causality link from inflows to liquidity and that foreign investors promote rather than impede local liquidity. Our analysis therefore renders support to the recent policy by Capital Market Authority of Kenya that now allows foreign investors to acquire up to 100% of any stock listed at the Kenyan stock exchange market.
Ngugi, O (2024). Foreign equity flows and stock market liquidity in Kenya. Afribary. Retrieved from https://tracking.afribary.com/works/foreign-equity-flows-and-stock-market-liquidity-in-kenya
Ngugi, Ochenge "Foreign equity flows and stock market liquidity in Kenya" Afribary. Afribary, 03 Oct. 2024, https://tracking.afribary.com/works/foreign-equity-flows-and-stock-market-liquidity-in-kenya. Accessed 24 Nov. 2024.
Ngugi, Ochenge . "Foreign equity flows and stock market liquidity in Kenya". Afribary, Afribary, 03 Oct. 2024. Web. 24 Nov. 2024. < https://tracking.afribary.com/works/foreign-equity-flows-and-stock-market-liquidity-in-kenya >.
Ngugi, Ochenge . "Foreign equity flows and stock market liquidity in Kenya" Afribary (2024). Accessed November 24, 2024. https://tracking.afribary.com/works/foreign-equity-flows-and-stock-market-liquidity-in-kenya