THE EFFECT OF GLOBAL FINANCIAL INTEGRATION ON SOUTH AFRICAN BANK STOCK RISK PREMIA: A US VERSUS CHINA CONFLICT PERSPECTIVE

Abstract

This study investigates the impact of global financial integration on the risk premiums of South African bank stocks. It analyzes the effects of the Chinese and American markets on the risk premiums of South African bank stocks. Using panel regression analysis and data from 2018: Q1 to 2022: Q1. The study reveals that factors from the Chinese stock market and economic environment explain variations in South African bank stock risk premiums more than those from the United States. It was also determined that the interaction between the Chinese and South African markets provides investors greater diversification opportunities.