ABSTRACT
This chapter presents a description of the stock markets of Central and Eastern Europe, and describes the methodology and data used, and outlines the main findings. The major feature of tests related to the weak-form efficiency of markets is to analyze the presence of a random walk for securities’ returns. Random walk means that successive variations in returns are independent and identically distributed, so the future prices cannot be predicted from information contained in past price changes. Since the late 1990s, it has been observed that stock markets in Central and Eastern Europe indicate rapid economic growth mainly related to European economic and financial integration and foreign direct investment (FDI) inflows. The Hungarian stock market has existed since 1864, with strong activity on commodities, and was developed in 1890 when Hungarian government bonds were regularly traded on the stock exchanges of London, Amsterdam, Berlin and Paris.
