The Study of the Effects of Exchange Rate Fluctuations on Petrochemical Industry Return in Tehran Stock Exchange

Abstract

Relationship between financial markets is a subject that has attracted the attention of many studies to it. In this context, the effect of macroeconomic indicators on capital market and specially stock exchange have an important role in macroeconomic policies in determining the changes trend of capital market. It should be noted also that different industries receive different effects considering the nature of their operations from Macroeconomics. Petrochemical industry is an industry that due to its direct function with oil products is highly affected by macroeconomics including exchange rate. The aim of the present study also is to study the effects of exchange rate fluctuations on petrochemical industry return in Tehran Stock Exchange. For this purpose, a number of 41 companies active in this industry during the time period of 2008 - 2013 were studied and research findings indicated that exchange rate directly cannot affect the return of companies active in this industry, but its fluctuations exert this effect directly on the returns of these companies.