The event study for South Africa, from December 2015 until today, showed that in both markets volatility was at above average on nearly all “negative news days” and these days were also marked by poor currency performance. In reverse, it also identified which dates marked unusual values and mapped the political events. An analysis for South Africa and its political events from the last three years, identified whether these coincided with usual values in the stock market or the currency market. This view was supported by a literature overview showing that many studies have identified local political events as one important driver of volatility in stock markets and currency markets. The underlying assumption to this essay was that local political events cause volatility in the local financial markets.
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