Do macroeconomic variables impact stock market returns? Evidence from Kazakhstan.

Abstract

Globalization has resulted in increasing connectivity in the worldwide financial market, as well as a plethora of profit potential for international investors through global diversification. The stock market, also known as the securities exchange, is one of the most active businesses, and it plays an important role in economic development, benefiting the whole industry and trade. The purpose of this study is to investigate the impact of macroeconomic factors on stock market returns: evidence from Kazakhstan. This analysis uses quarterly data from Kazakhstan's stock market indices, gross domestic product, interest rate, inflation rate, currency rate, and foreign direct investment from 2000Q1 to 2019Q4. From the findings, it is explained that regulators should keep interest rate relatively low to encourage economic business, improve external financing through rule-based exchange rate policy. The paper recommends that both macro factors and stock market returns should adequately compensate investments. Keywords: Kazakhstan, macroeconomic variables, stock markets return, World Bank Indicators