Abstract
The research studies the impact of the exchange rate fluctuations of the local currency on the share dividends exchanged in the stock market, and stating whether there is a trace of the fluctuations occurring in the exchange rate on the fluctuations reflected on the stock returns in the stock market – during the political and economic crisis in Syria. The descriptive analytical approach was adopted to indicate whether there is any direct or indirect impact of fluctuations in the exchange rate of the pound (Lira) against the dollar on the exchange value of the Damascus Securities Exchange Index. The study community consists of all stock companies listed in Damascus Securities Exchange. It covers the total of 23 listed companies. It relied on the period from 1/7/2011 through 12/31/2013 to study the impact of exchange rate fluctuations on stock returns, where the crisis began on 18/03/2011, but reflections on economic life began to appear in mid-2011 when the severe fluctuations in the exchange rate and returns began as a result of lack of stability and economic siege Syria has been witnessing and the study stretched until the year 2013. The data is a sort of daily observations of each of the dependent and independent variable sending with 381 observations. The study reached the many results some of which include that there is an inverse weak between the Syrian pound exchange rate and Damascus Securities Exchange Index returns. The inefficiency of Damascus Securities Exchange Index on the weak level, where, as we have seen, this index is not subject to normal distribution and it is auto-correlated of the third degree and does not settle at the first level; instead, it settles at the first change.
Highlights
Foreign trade has become more important to our economy in recent years
Despite the question that whether international trade will lead to higher economic growth is an old question which has been discussed among exports supporters and protectionists with evidences that theorists of both sides have affected policymaking in different countries with different levels of development from the time of Adam Smith, John Stuart Mill, and Keynes up to now (Mehrara et al, 2012), for most Asian countries, since foreign trade plays an important role in their economies, these are worrying times (Economic Intelligence Unit, 2008)
Being dependent on the export of crude oil, the Nigerian economy is subject to the vicissitudes and vagaries of the international oil market such that international oil price shocks will immediately be felt in the domestic economy
Summary
Foreign trade has become more important to our economy in recent years. Exports and imports of goods and services have grown rapidly. The role of trade in promoting industrialization and economic growth cannot be overemphasised This is because, foreign trade provides impetus for industrial development by enlarging market frontiers for domestic industrial output (exports), leading to increased investment, employment, output, and income. Adenugba and Dipo (2013), asserted that when the demand for exports is high more production is required, this creates more employment, raises national income and helps attain a favourable balance of trade and balance of payment position for the exporting economy. This underlines the importance of exports in the growth of an economy. Being dependent on the export of crude oil, the Nigerian economy is subject to the vicissitudes and vagaries of the international oil market such that international oil price shocks will immediately be felt in the domestic economy
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