Impact of the Transition to Continous Trading on Emerging financial Market’S Liquidity : Case Study of the West Africa Regional Exchange Market (BRVM)
CORE Metadata, citation and similar papers at core.ac.uk Provided by Munich Personal RePEc Archive MPRA Munich Personal RePEc Archive Impact of the transition to continous trading on emerging financial market's liquidity : Case study of the West Africa Regional Exchange Market (BRVM) Aboudou OUATTARA Centre Africain d'Etudes Sup´erieures en Gestion 2 December 2016 Online at https://mpra.ub.uni-muenchen.de/75391/ MPRA Paper No. 75391, posted 4 December 2016 06:04 UTC IMPACT OF THE TRANSITION TO CONTINUOUS TRADING ON EMERGING FINANCIAL MARKET’S LIQUIDITY : CASE STUDY OF WEST AFRICA REGIONAL EXCHANGE MARKET (BRVM) Aboudou OUATTARA, Assistant professor in finance1 African Center for Advanced Studies in Management (CESAG) Dakar, november 2016 SUMMARY After 18 years of activities and take-off difficulties due to socio-economic and political environment of the WAEMU zone, the west Africa regional exchange market (BRVM)’s authorities decided to move to continuous trading. The decision was effective on 16th september 2013. This action, beyond the upgrading of this stock exchange market to international standards, aims at improving market liquidity. Two years after its implementation, it seemed interesting to question the relevancy of this decision. In this empirical research, we are interested in evaluating the impact of the transition to continuous trading on market liquidity. Based on data collected from daily trading report and available databases, we mobilized the instrumental variables method to identify the part of the observed variation in liquidity due to the quotation mode change. This method was applied to evaluate the change in trading volume, TurnOver ratio, Martins index, Amihud ratio, Hui Heubel ratio and market impact due to quotation mode change.
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