CEE Companies: Economic vs. Market Performance

摘要

Emerging markets are considered to be the providers of great investment opportunities due to their continually improving economic and political conditions. However, high risks aligned with high potential return make investors' approach towards stock investing more careful and the analysis of the publicly available market information more thorough. The question about the best proxy of the market performance of the listed companies is one of the most important for the fundamental analysis followers. The goal of the current paper is to analyze the relationship between the market and economic performance of a company in order to test whether Central and Eastern European (CEE) companies' economic performance is reflected in their market return. Correlation and quartile analysis were used to discover if any economic performance ratio can be used as a proxy to TSR (total shareholder return). Analysis was made based on the sample data of CEE 117 companies.