Has political instability contributed to price clustering on Fiji's stock market?

The goal of this paper is to examine evidence of stock price clustering on the South Pacific Stock Exchange, located in Fiji, and explore its determinants. We find that stock prices cluster at the decimal of 0 and 5, with almost half of prices settling on these two decimals. Upon investigating the determinants of price clustering on the South Pacific Stock Exchange we find that price level and volume of trade have a statistically significant positive effect on price clustering. We also propose and test a ?panic trading‟ hypothesis which states political instability induces price clustering. We find evidence that political instability in Fiji induces price clustering behavior.