Stock Returns and the Weather Effect: the case of Ghana

The stock markets are an integral aspect of every economy. Over the last few decades, there has been a significant change in Ghana stock market returns (GSE). Our study examines the statistical and economic significance of investor sentiment, based on weather conditions/changes, on stock market returns. OLS models, assisted by unit root tests, were employed in analyzing the data obtained from the Ghana stock exchange platform from 2000 to 2017. From our literature review, we discovered that investors’ perceptions play a central role in setting the direction of stock market returns. We tested whether weather variations influence investment decisions of investors; we discovered that temperature and cloud cover significantly influence stock market returns. This is because mood changes are associated with variations in weather conditions. However, as per our regression coefficient, sunshine shows a statistically insignificant impact on investors’ investment choices. Read more