Near-zero growth is expected in Kazakhstan in 2016

2016 ◽  
Keyword(s):  
Financial Markets ◽  
Banking System ◽  
Oil Prices ◽  
Domestic Demand ◽  
Living Standards ◽  
External Shocks ◽  
Monetary Policies ◽  
Content Type ◽  
Trading Partners ◽  
Zero Growth

Significance Low global oil prices and GDP declines in Russia and other trading partners caused a slowdown in growth in Kazakhstan in 2015 and early 2016. External shocks led to a large devaluation of the currency, hikes in inflation, and low domestic demand and industrial activity. Savers switched from tenge to dollars, and devaluation brought reduced liquidity and increased volatility in the financial markets, undermining the banking system. Impacts Falling living standards are a key political risk for President Nursultan Nazarbayev. Higher oil prices and a modest Russian recovery may offer Kazakhstan some respite. Tenge depreciation against trading partners' currencies will boost non-commodity exports. 'Dollarisation' of the economy will reduce the central bank's ability to implement monetary policies.

Shallower recession will not boost Russia's GDP hopes

2020 ◽  
Keyword(s):  
Central Bank ◽  
Economic Performance ◽  
Oil Prices ◽  
Domestic Demand ◽  
Productive Capacity ◽  
Monetary Policies ◽  
Content Type ◽  
The Third ◽  
Permanent Loss ◽  
Vulnerable Population Groups

Significance The ministry's optimism is based on a recovery in global oil prices, the limited effects of COVID-19 lockdown measures on industries and businesses, and a rebound in domestic demand. It expects economic performance to return to pre-pandemic levels by the third quarter of 2021. Impacts A permanent loss of productive capacity in some sectors would fuel inflation. This and other inflationary pressures may force the central bank to shift from accommodating to restrictive monetary policies. Job losses in small and medium-sized companies will hurt the most vulnerable population groups.

COVID-19 pandemic and connectedness across financial markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Abubakr Naeem ◽  
Saba Sehrish ◽  
Mabel D. Costa
Keyword(s):  
Financial Markets ◽  
Financial Risk ◽  
Negative Impact ◽  
Spillover Effect ◽  
External Shocks ◽  
Content Type ◽  
Time Frequency ◽  
Long Run ◽  
Short Run ◽  
Momentum Trading

Purpose This study aims to estimate the time–frequency connectedness among global financial markets. It draws a comparison between the full sample and the sample during the COVID-19 pandemic. Design/methodology/approach The study uses the connectedness framework of Diebold and Yilmaz (2012) and Barunik and Krehlik (2018), both of which consider time and frequency connectedness and show that spillover is specific to not only the time domain but also the frequency (short- and long-run) domain. The analysis also includes pairwise connectedness by making use of network analysis. Daily data on the MSCI World Index, Barclays Bloomberg Global Treasury Index, Oil future, Gold future, Dow Jones World Islamic Index and Bitcoin have been used over the period from May 01, 2013 to July 31, 2020. Findings This study finds that cryptocurrency, bond and gold are hedges against both conventional stocks and Islamic stocks on average; however, these are not “safe havens” during an economic crisis, i.e. COVID-19. External shocks, such as COVID-19, strengthen the return connectedness among all six financial markets. Research limitations/implications For investors, the study provides important insights that during external shocks such as COVID-19, there is a spillover effect, and investors are unable to hedge risk between conventional stocks and Islamic stocks. These so-called safe haven investment alternatives suffer from the similar negative impact of systemic financial risk. However, during an external shock such as COVID-19, cryptocurrencies, bonds and gold can be used to hedge risk against conventional stocks, Islamic stocks and oil. Moreover, the findings imply that by engaging in momentum trading, active investors can gain short-run benefits before the market processes any new information. Originality/value The study contributes to the emergent literature investigating the connectedness among financial markets during the COVID-19 pandemic. It provides evidence that the return connectedness among six global financial markets, namely, conventional stocks, Islamic stocks, bond, oil, gold and cryptocurrency, is extremely strong. From a methodological standpoint, this study finds that COVID-19 pandemic shock has a significant short-run impact on the connectedness among financial markets.

scholarly journals Behavioral agent-based framework for interacting financial markets

2020 ◽  
Vol 5 (2) ◽  
pp. 94-115
Author(s):  
Heba M. Ezzat
Keyword(s):  
Financial Markets ◽  
Trading Strategy ◽  
Past Performance ◽  
Time Step ◽  
Monetary Policies ◽  
Content Type ◽  
Agent Based ◽  
Market Makers ◽  
Novel Approach ◽  
Excess Volatility

Purpose This paper aims at developing a behavioral agent-based model for interacting financial markets. Additionally, the effect of imposing Tobin taxes on market dynamics is explored. Design/methodology/approach The agent-based approach is followed to capture the highly complex, dynamic nature of financial markets. The model represents the interaction between two different financial markets located in two countries. The artificial markets are populated with heterogeneous, boundedly rational agents. There are two types of agents populating the markets; market makers and traders. Each time step, traders decide on which market to participate in and which trading strategy to follow. Traders can follow technical trading strategy, fundamental trading strategy or abstain from trading. The time-varying weight of each trading strategy depends on the current and past performance of this strategy. However, technical traders are loss-averse, where losses are perceived twice the equivalent gains. Market makers settle asset prices according to the net submitted orders. Findings The proposed framework can replicate important stylized facts observed empirically such as bubbles and crashes, excess volatility, clustered volatility, power-law tails, persistent autocorrelation in absolute returns and fractal structure. Practical implications Artificial models linking micro to macro behavior facilitate exploring the effect of different fiscal and monetary policies. The results of imposing Tobin taxes indicate that a small levy may raise government revenues without causing market distortion or instability. Originality/value This paper proposes a novel approach to explore the effect of loss aversion on the decision-making process in interacting financial markets framework.

Low oil prices put pressure on China's energy policy

2015 ◽  
Keyword(s):  
Oil And Gas ◽  
Oil Prices ◽  
International Market ◽  
Domestic Demand ◽  
Energy Prices ◽  
Content Type ◽  
Oil Companies ◽  
National Oil Companies ◽  
Financial Pressure ◽  
Difficult Time

Subject Effect of low oil prices on China. Significance China is the world's second-largest oil user and imports nearly 60% of its annual requirements. If oil prices remain below 50 dollars per barrel, China's import bill for crude oil will fall by tens of billions of dollars in 2015, while the national oil companies (NOCs) face a difficult time as their profits from oil production are squeezed. However, the consequences are not straightforward due to the government's role in setting energy prices and the mix of commercial and state objectives of the NOCs. Impacts Financial pressure on China's NOCs will not be as great as on their international counterparts. The NOCs are likely to embark on a spree of buying overseas oil and gas assets. With contracted gas supplies exceeding domestic demand, Chinese LNG importers will sell surplus on the international market.

Low oil prices will force policy choices on Azerbaijan

2015 ◽  
Keyword(s):  
Oil And Gas ◽  
Banking System ◽  
Oil Prices ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Policy Choices ◽  
The Past ◽  
Fiscal Space ◽  
Will Force ◽  
The Impact

Subject The impact of prolonged low oil prices. Significance Hydrocarbons drove rapid economic expansion in the past. The associated increase in income fuelled the growth of domestically oriented sectors, such as trade and construction. Publicly financed infrastructure spending, using the fiscal space created by oil and gas revenues, also contributed. Impacts Sluggish oil production will compound the impact of persistent low oil prices. Fiscal consolidation will also require a stronger focus on the prioritisation of spending. Devaluation has not fully restored competitiveness but is a source of stress for the banking system.

PiS policy shift puts Polish markets under strain

2016 ◽  
Keyword(s):  
Financial Markets ◽  
Foreign Currency ◽  
Monetary Policies ◽  
Government Bonds ◽  
Content Type ◽  
Local Currency ◽  
Policy Shift ◽  
Law And Justice ◽  
Rating Downgrades ◽  
High Share

Significance However, the unexpected downgrade of Poland by Standard & Poor's (S&P) on January 15 has focused attention on the financial and economic policy stance of the Law and Justice (PiS) government, in particular, the party's plans for a Hungarian-style forced conversion of foreign currency (FX)-denominated mortgages in local currency contracts. Poland's equity markets have fallen sharply, although the zloty and local government bonds are proving more resilient, despite coming under increasing pressure. Impacts The threat is looming over Poland of further rating downgrades if the credibility of its fiscal and monetary policies is undermined. Emerging Europe's high share of FX-denominated debt, particularly in the south-east, might be a source of financial vulnerability. Non-resident investors are still purchasing Poland's domestic bonds and may even be attracted by the recent rise in yields. CEE's negligible trade linkages with China and favourable status as an oil importer put its financial markets among the most resilient EMs.

Iran nuclear deal could test European unity

2018 ◽  
Keyword(s):  
Crude Oil ◽  
National Security ◽  
Financial Institutions ◽  
Negative Impact ◽  
Oil Prices ◽  
Content Type ◽  
Crude Oil Prices ◽  
European Unity ◽  
Oil Exports ◽  
Trading Partners

Significance The recent appointments of Secretary of State Mike Pompeo and National Security Advisor John Bolton, both critics of the deal, could contribute to Trump’s willingness to withdraw -- despite progress in consultations between Washington and its European allies to address US concerns. Impacts The reluctance of financial institutions to enter Iran’s market makes it difficult for firms to secure financing for their Iran operations. US secondary sanctions would have a particularly negative impact on Iran’s top European trading partners: Italy, France, Germany and Spain. A snapback of US sanctions would cut Iranian oil exports and push up crude oil prices.

scholarly journals Measuring Dynamic Return and Volatility Connectedness among Nigerian Financial Markets

2020 ◽  
pp. 169-191
Author(s):  
Elias A. Udeaja
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Financial Markets ◽  
Oil Prices ◽  
Money Market ◽  
Time Varying ◽  
External Shocks ◽  
Treasury Bill ◽  
Official Exchange Rate

This study employs the connectedness measure of Diebold and Yilmaz (2012, 2014) to examine the intensity of connectedness among the Nigerian financial markets for the period January 2000 to December 2018. The study used all shares index, Treasury bill rate and Naira/USD official exchange rate to measure stock market, money market and exchange rate market, respectively. The study found connectedness among the Nigerian financial markets to be highly time-varying and appear to be higher during the period of high depreciation of the naira which coincides with the period of falling oil prices and domestic economic meltdown of 2014 and 2016, respectively. This shows that, relative to external shocks, connectedness among financial markets is likely to get amplified during the time of domestic turbulence. The paper, therefore recommends that policymakers should look inward whenever policy discuss revolves around the increasing integration of financial markets to save the economy from aggravation of contagion.

Russian economic gloom belied by benign debt outlook

2016 ◽  
Keyword(s):  
Credit Rating ◽  
External Shocks ◽  
Public And Private ◽  
Monetary Policies ◽  
Content Type ◽  
Domestic Debt ◽  
Capital Outflows ◽  
Fiscal Austerity ◽  
Investment Grade ◽  
Sovereign Credit Rating

Subject Russia's foreign and domestic debt position. Significance Standard & Poor's (S&P) raised its outlook for Russia's sovereign credit rating from 'negative' to 'stable' on September 16. At BB+, the agency's rating for Russia remains a notch below investment grade, as does Moody's, but S&P notes that the economy has demonstrated resilience in its response to external shocks and that plans for fiscal austerity are encouraging. The scale of Russian external debt, both public and private, is modest thanks to years of eschewing borrowing. Impacts Providing fiscal and monetary policies remain prudent, net private capital outflows are likely to be limited. Corporate ruble bonds, already enjoying some popularity among foreign investors, are likely to remain attractive. When financial sanctions are eventually lifted, some Russian companies able to repay debt will pull in foreign direct investment.

Factors domestic and foreign will slow Georgia's GDP

2015 ◽  
Keyword(s):  
Oil Prices ◽  
Content Type ◽  
Parliamentary Elections ◽  
Export Competitiveness ◽  
Trading Partners ◽  
Economic Slowdown ◽  
Remittance Flows ◽  
Run Up ◽  
Household Incomes ◽  
Trade And Investment

Subject Georgia's economic slowdown. Significance Growth is expected to slow sharply this year, owing to the ramifications of the Russian recession and the weak regional outlook, which has hit remittance flows, trade and investment. Inflationary pressures started to pick up in the second quarter, undermining household incomes. The external sector's performance is also weak. Impacts Extended EU sanctions and weak global oil prices dampening Russian growth -- or further Greek complications -- will limit remittance flows. Government credibility will be hurt in the run-up to 2016 parliamentary elections unless it can reverse Georgia's GDP and inflation trends. Similar steep falls in currencies of regional trading partners will limit the boost to export competitiveness from lari depreciation.

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