Influence of world stock markets on the development of the stock market in Ukraine

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Viewing the development of the stock market in Ukraine, the economy, which world financial organizations characterize as small and open, is largely determined by the trends formed by the global stock markets and leading stock exchanges. Therefore, the study aims to analyze Ukraine’s stock market, the world stock market, stock markets in the regions, and to assess their mutual influence. The study uses the data of the World Federation of Exchanges and National Securities and Stock Market Commission (Ukraine) from 2015 to 2020. Stock market performance forecasts are built using triple exponential smoothing. Based on pairwise correlation coefficients, the existence of a significant dependence in the development of the world stock market on the development of the American stock market was determined. Regarding the Ukrainian stock exchanges, only SE “PFTS” demonstrated its dependence on the US stock market. The results of the regression model based on an exponentially smoothed series of trading volumes in all markets showed that variations in the volume of trading on the world stock market are due to the situation on the US stock markets. Trading volume dynamics on Ukrainian stock exchanges such as SE “PFTS” and SE “Perspektiva” is almost 50% determined by the development of stock markets in the American region. Although Ukraine is geographically located in Europe, the results show a lack of significant links and the impacts of stock markets in this region on the major Ukrainian stock exchanges and the stock market as a whole.

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    • Figure 1. Market capitalization structure by main regions of the world stock market
    • Figure 2. Share of the world’s major stock exchanges in the total world market capitalization
    • Figure 3. Volumes of registered securities issues in Ukraine, UAH mln
    • Figure 4. Securities trading status and market capitalization in % of GDP
    • Figure 5. Structure of securities trading in terms of stock exchanges in Ukraine
    • Figure 6. Structure of securities transactions in terms of stock exchanges in Ukraine
    • Figure 7. Distribution of securities transactions among stock exchanges in Ukraine
    • Figure 8. Dynamics of actual values and forecast of securities trading volumes in terms of stock markets and exchanges
    • Figure 9. Dynamics of securities trading volume (actual, forecast based on exponential smoothing and polynomial trend)
    • Figure B1. Dynamics of the actual trading volume and forecasts based on the moving average and polynomial trend
    • Table 1. Pairwise correlation matrix of securities trading volumes among stock markets and stock exchanges
    • Table 2. Regression modeling of dependencies between stock markets and stock exchanges
    • Table A1. Stock market classification
    • Conceptualization
      Inna Shkolnyk
    • Methodology
      Inna Shkolnyk, Volodymyr Orlov
    • Project administration
      Inna Shkolnyk
    • Supervision
      Inna Shkolnyk
    • Data curation
      Serhiy Frolov
    • Investigation
      Serhiy Frolov, Viktoriia Dziuba
    • Visualization
      Serhiy Frolov, Volodymyr Orlov
    • Writing – review & editing
      Serhiy Frolov
    • Formal Analysis
      Volodymyr Orlov, Viktoriia Dziuba
    • Validation
      Volodymyr Orlov, Viktoriia Dziuba
    • Writing – original draft
      Volodymyr Orlov, Viktoriia Dziuba
    • Software
      Viktoriia Dziuba
    • Funding acquisition
      Yevgen Balatskyi
    • Resources
      Yevgen Balatskyi