Empirical examination of herding behaviour in the Johannesburg stock exchange : a sectoral analysis

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Peer-Reviewed Research
  • SDG 12
  • Abstract:

    Abstract: This paper uses the daily stock returns from January 2010 to September 2015 to investigate the presence of herding behavior and its dynamics on the South African financial sector. The paper makes use of the median as an alternative proxy to the mean in estimating market average returns. We found evidence in support of herding behaviour in the general financials and the real estate sectors of the Johannesburg Stock Exchange (JSE) during normal market period. Investors in the banking and the insurance sectors were found to show rational investment decisions during all market periods.