Discuss the feasible existence of the three forms of stock market efficiency in Zambia’s stock exchange

The three forms of market efficiencies are weak form efficient, semi-strong form efficient and strong form market efficiency. These market efficiencies are a part of Efficient Market Hypothesis given by H. Markowitz, wherein it is stated that it is not possible for an investor or an asset manager to generate alpha (the return in excess to the return provided by the market) in an efficient market. This is because the price of an asset completely reflects the full information available for the stock. However, this efficiency can be sub-categorized into three forms as mentioned above. Further, one can gain alpha from its investments by taking long positions in the investments that are riskier than an optimal level of risk for any rational investor.
Weak Form Efficient Market
Under a weak-form efficient market, it is believed that a stock reflects all the data relating to the past stock prices and how it has emerged from the previous pricing to the current pricing. Thus, as a result, it suggests that an investor (or a speculator to be more precise under this scenario) cannot generate alpha return by simply using the technical analysis. However, if detailed information is gathered (which a fundamental investor would do) can help generating potential alpha for the same.
Semi-Strong Form Efficient Market
Under a semi-strong form efficient market, the price of a stock reflects the information relating to historical stock price and all the information about the company that is publicly available. Key point here is to note that a fundamental investor analyses this information to generate alpha. However, that information is already being reflected in the stock’s price under this market condition. Thus, as a result, it is not possible (even for a fundamental investor) to generate positive alpha under this market. An investor who has some inside information about the company (which is not available to the public at large) can generate excess return (alpha) as compared to the benchmark.
Strong Form Efficient Market
In this form of market efficiency, it is assumed that the price of a stock fully reflects all the information relating to the company. This information not only includes...