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Impact of Stock Market Development on Pension Fund Performance


Affiliations
1 Department of Banking and Finance, Bindura University of Science Education, Bindura, Zimbabwe
2 Netone, Zimbabwe
3 Department of Finance, University of Kwa Zulu Natal, School of Accounting, Economics and Finance, Durban, South Africa
 

This document examines the impact of stock market developments on pension funds. Other previous studies have been conducted to find the relationship between these two variables in both developed and developing countries. The main objective of the research was to find the impact of stock market development on the performance of pension funds. The previous studies suggested that pension funds financial assets have positive impacts on stock market depth and liquidity as well. This research was aimed at analysing the Zimbabwean financial market and ascertains whether such a relationship holds. Pension funds returns were analysed on a yearly basis against the total market capitalization, industrial index and value traded for the particular time under study, using the Zimbabwean stock market and pension funds data.The relationship was tested using regression analysis and graphs and the results suggest that there is a positive relationship between pension fund performance and market capitalization as well as returns on the industrial index.


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  • Impact of Stock Market Development on Pension Fund Performance

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Authors

Collade Ngoni Murungu
Department of Banking and Finance, Bindura University of Science Education, Bindura, Zimbabwe
Mufaro Wilster Marecha
Netone, Zimbabwe
Edson Vengesai
Department of Finance, University of Kwa Zulu Natal, School of Accounting, Economics and Finance, Durban, South Africa

Abstract


This document examines the impact of stock market developments on pension funds. Other previous studies have been conducted to find the relationship between these two variables in both developed and developing countries. The main objective of the research was to find the impact of stock market development on the performance of pension funds. The previous studies suggested that pension funds financial assets have positive impacts on stock market depth and liquidity as well. This research was aimed at analysing the Zimbabwean financial market and ascertains whether such a relationship holds. Pension funds returns were analysed on a yearly basis against the total market capitalization, industrial index and value traded for the particular time under study, using the Zimbabwean stock market and pension funds data.The relationship was tested using regression analysis and graphs and the results suggest that there is a positive relationship between pension fund performance and market capitalization as well as returns on the industrial index.