The Effects Of Exchange Rate Fluctuations On The Stock Price Of Anglo-American PLC

Several variables influence the market prices of mining companies,such as inflation,exchange rates,interest rates,geopolitics,basic metal prices,etc.The purpose of this analysis is to examine the effect of such factors influencing the stock price of the Anglo-American mining company in South Africa and the United Kingdom,specifically,exchange,inflation,and interest rates with inflation and interest rates being controlled for.Secondary data from the Anglo-American Plc reports,the Johannesburg and London stock exchanges and the two countries' central reserves are used as the statistics collection channels.The study uses a special case of panel data which is,time-series data and it adopts a longitudinal study or panel study.The findings are evaluated using the application of R Statistical software through a linear data regression analysis model.Level data is tested for unit roots.The technical analysis used shows that exchange rates and stock prices significantly follow a random-walk approach.The variables are non-stationary at their level and they become stationary in their first difference.Correlation tests and further statistical inferences are undertaken.These findings realized will shed some additional light on the risks involved in exchange rates and commodity prices for policymakers of countries dependent primarily on commodity exports.The findings show that there is a rather low statistically significant linear relationship between the USD/GBP exchange rate and the AAL: LO stock price in the short run.Similar findings are reached for the USD/ZAR exchange rate and the ANG: JO stock price.This means that there is no instantaneous effect of exchange rates on the stock price.