Investment approach, predictability and mediating effect of the market profitability index on investor sentiment on the West African Regional Stock Exchange
Pourakin Djarius Dieudonné Bama
Afro-Asian J. of Finance and Accounting, Vol. 13, No. 2 (2023) pp. 147 - 173
Emerging markets have diversification potential for international investors - provided they know the characteristics of these markets in order to make good allocation decisions. In this perspective, this paper studies the predictability of the West African Regional Stock Exchange's indicators with investors' investment approach and the mediating effects of the profitability index between their sentiment and market liquidity. The results indicate that the market profitability index plays a moderating role rather than mediating role between investor sentiment and market liquidity. In the context of predictability, the results are contradictory. Apparently, in a perceptible illusion and logic of savings on the market, investors are unable to correctly anticipate the development of the market, which is rather relatively stable.