Prioritization of the IT Sector in the CEE Stock Markets: Investment Policies, Trends and Hidden Gems

Ihor Hurnyak; Oleksandra Struk

doi:10.18778/1508-2008.27.20

Authors

Ihor Hurnyak Ivan Franko National University of Lviv, Faculty of International Relations Department of International Economic Analysis and Finance, Lviv, Ukraine https://orcid.org/0000-0003-0926-2456
Oleksandra Struk University of Warmia and Mazury in Olsztyn (Poland), Faculty of Social Science Institute of Political Sciences, Department of Political and Security Sciences https://orcid.org/0000-0002-5316-9630

DOI:

https://doi.org/10.18778/1508-2008.27.20

Keywords:

Central and Eastern Europe, investment, IT, optimal portfolio, stock market

Abstract

Objective: The main purpose of the research is to show that the Central and Eastern European (CEE) market is an essential component of the global stock market. It displays similar patterns to developed countries, and there is a special emphasis on information technology.

Research Design & Methods: The study is supported by various machine learning methods and economic analysis, in addition to using Python and R packages. In order to gain a more comprehensive insight into the developments in CEE-region trends, the paper considers a comparative portfolio that focuses on German business, and there is a simulation of the incorporation of the Ukrainian IT sector. Constructing a business strategy in accordance with the Fama–French approach is boosted by incorporating neural networks.

Findings: An examination of the performance of Czech, Polish, and Hungarian firms on the stock exchanges suggests that the investment policy oriented towards software is a reasonable choice. The results yielded by the IT companies unmistakably reveal the substantial benefits of their stock market ventures, as well as indicating the ongoing trend of investor reliance. The problem of IT business valuation is highlighted as one of the pitfalls of investing.

Implications & Recommendations: The research proposes that maintaining a priority focus on IT, even in challenging circumstances, ensures steady regional advancement.

Contribution & Value added: This research brings a unique emphasis to the status and outlook of the IT sector, contributing to the existing toolkit, even in the face of repeated crises.

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