THE IMPACT OF TERRORISM ON FINANCIAL MARKETS: EVIDENCE FROM ASIA

2018 ◽  
Vol 63 (05) ◽  
pp. 1183-1204 ◽  
Author(s):  
FAHEEM ASLAM ◽  
AMIR RAFIQUE ◽  
ANEEL SALMAN ◽  
HYOUNG-GOO KANG ◽  
WAHBEEAH MOHTI
Keyword(s):  
Financial Markets ◽  
Stock Markets ◽  
Negative Impact ◽  
Target Type ◽  
Terrorist Attacks ◽  
Market Returns ◽  
Security Forces ◽  
Suicide Attacks ◽  
The Impact ◽  
Attack Type

This paper examines the impact of 410 terrorist attacks on the performance of five Asian stock markets. The empirical findings indicate that terrorism has a significant impact on the stock markets. Furthermore, the magnitude of these effects varies with respect to country, attack type, target type and severity of the attacks. In target type, terrorist attacks on business sector and security forces are particularly destructive for the stock markets. Likewise, in attack type, suicide attacks and bomb blasts particularly generate a significant downward movement in the stock markets. Furthermore, the more severe attacks have larger negative impact on market returns.

COVID -19 and Indian Financial Markets: A Review

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Stock Markets ◽  
Global Economy ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Management Strategies ◽  
The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

scholarly journals Impact of Terrorism on Financial Markets: The Case of Turkey

2016 ◽  
Author(s):  
Neşe Algan ◽  
Mehmet Balcılar ◽  
Harun Bal ◽  
Müge Manga
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Financial Market ◽  
Terrorist Attacks ◽  
Market Returns ◽  
Stock Market Returns ◽  
Stock Indices ◽  
Daily Data ◽  
The Impact

This study investigates the impact of terrorism on the Turkish financial market using daily data from Jan 4, 1988 to May 24, 2016. In order to measure the impacts of terrorist attacks in Turkey we test for causality from terrorism index to returns and volatilities of 3 aggregate and 16 sector level stock indices using a recently developed nonparametric causality-in-test test of Balcilar et al. (2016). The results obtained indicate that there is no causality from terrorist activities to stock market returns (1st moment). However, we find significant causality at various quantiles from terrorist activates to volatility (2nd moment) of tourism, food and basic materials sectors.

Influence of Terrorist Acts on the Dynamics of World Stock Markets: Situational Analysis

2018 ◽  
Vol 2018 (1) ◽  
pp. 105-121
Author(s):  
Sergej Volodin ◽  
Andrej Mikhalev
Keyword(s):  
Developing Countries ◽  
Law Enforcement ◽  
Financial Markets ◽  
Stock Markets ◽  
Terrorist Attacks ◽  
General Nature ◽  
Situational Analysis ◽  
Law Enforcement Agencies ◽  
Terrorist Acts ◽  
The Impact

Despite the efforts of law enforcement agencies of the world’s leading countries, the influence of radical movements has become much stronger in last decades. Terrorist acts lead to a sharp destabilization in the country especially in its economy. Although the number of terrorist acts is growing, their impact on the financial markets is still barely studied. That is why the aim of this work is to define the general nature of the impact of terrorist attacks on world stock markets. For this purpose, the authors use data for nineteen countries for the period from 1988 to May 2017. The situational analysis, which is based on this data, made it possible to identify the main trends in the impact of terrorist attacks on the dynamics of market indices in developed and developing countries, and also to describe Russian specifics. The conclusions of this work can be useful to market agents as well as to the organizers of trades and regulators, for the formation of timely and correct measures to stabilize the financial system in such situations.

scholarly journals Impact of MiFID II on the Market Volatility—Analysis on Some Developed and Emerging European Stock Markets

Laws ◽  
2021 ◽  
Vol 10 (3) ◽  
pp. 55
Author(s):  
Marius Cristian Miloș
Keyword(s):  
Financial Markets ◽  
Capital Markets ◽  
Stock Markets ◽  
Negative Impact ◽  
Short Term ◽  
Emerging Stock Markets ◽  
Volatility Analysis ◽  
Stock Indexes ◽  
European Stock Markets ◽  
The Impact

The paper investigates whether the implementation of MiFID II, a packet of financial legislation applying broadly to European Union financial markets, has led to a change in the volatility of some European developed and emerging stock markets. We show that for the developed capital markets considered in the analysis, MiFID II did not lead to a decrease in the volatility of capital markets. On the contrary, for all analysis intervals considered (3 months, 6 months, 12 months, 18 months and 24 months), the impact on volatility is positive, with volatility increasing in the case of the FTSE 100, CAC40 and DAX stock indexes. There is a similar significant relationship for the Czech stock market, but only over the three-month interval. For the Polish and Romanian stock markets, which enforced MiFID II later, a negative impact of MiFID II on volatility could also be observed. In the Romanian market, MiFID II had a negative impact on volatility on the short-term horizon, while for the Polish market, the impact of MiFID II on volatility is noticeable on a longer term of 24 months.

The Impact of Terrorism on Construction Industry in Iraq

2015 ◽  
Vol 3 (2) ◽  
pp. 69-84
Author(s):  
Wadhah Amer Hatem ◽  
Samiaah M. Hassen Al-Tmeemy
Keyword(s):  
Construction Industry ◽  
Construction Projects ◽  
Historical Data ◽  
Terrorist Attacks ◽  
Construction Sector ◽  
Statistical Procedures ◽  
Qualitative Approaches ◽  
Suicide Attacks ◽  
The Face ◽  
The Impact

     Suicide attacks, bombings, explosions became the part of daily life in Iraq. Consequently, the threat of terrorism put the Iraqi construction sector in the face of unique and unusual challenges that not seen on other countries. These challenges can have extensive impact on construction projects. This paper seeks to examine the impact of the terrorist attacks on construction industry and determine the extent to which the impact of terrorism on construction projects in terms of cost, schedule, and quality. This study adapted quantitative and qualitative approaches to collect data using questionnaire survey and interviews, as well as historical data. The study focused on projects that have been the target of terrorist strikes in Diyala governorate. A variety of statistical procedures were employed in data analysis. The results revealed the extent to which terrorist attacks impact construction projects in terms of cost, time, and quality. The results of this study will enhance the awareness of all construction parties to the impact of the terrorist attacks against construction projects. Eventually, this can develop a risk management assessment and assist contractors to properly protect projects and buildings to minimize injuries and fatalities in the event of terrorism.

A quantile regression approach to evaluate the relative impact of global and local factors on the MENA stock markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Slah Bahloul ◽  
Nawel Ben Amor
Keyword(s):  
Stock Market ◽  
Quantile Regression ◽  
Stock Returns ◽  
Stock Markets ◽  
Financial Integration ◽  
Ordinary Least Squares ◽  
Market Returns ◽  
Stock Market Returns ◽  
Content Type ◽  
The Impact

PurposeThis paper investigates the relative importance of local macroeconomic and global factors in the explanation of twelve MENA (Middle East and North Africa) stock market returns across the different quantiles in order to determine their degree of international financial integration.Design/methodology/approachThe authors use both ordinary least squares and quantile regressions from January 2007 to January 2018. Quantile regression permits to know how the effects of explanatory variables vary across the different states of the market.FindingsThe results of this paper indicate that the impact of local macroeconomic and global factors differs across the quantiles and markets. Generally, there are wide ranges in degree of international integration and most of MENA stock markets appear to be weakly integrated. This reveals that the portfolio diversification within the stock markets in this region is still beneficial.Originality/valueThis paper is original for two reasons. First, it emphasizes, over a fairly long period, the impact of a large number of macroeconomic and global variables on the MENA stock market returns. Second, it examines if the relative effects of these factors on MENA stock returns vary or not across the market states and MENA countries.

scholarly journals Taxing impact of terrorism on global economic openness of developed and developing countries

2018 ◽  
Vol 68 (3) ◽  
pp. 311-335
Author(s):  
Abubakr Saeed ◽  
Yuhua Ding ◽  
Shawkat Hammoudeh ◽  
Ishtiaq Ahmad
Keyword(s):  
Developing Countries ◽  
Negative Impact ◽  
Developed Countries ◽  
Terrorist Attacks ◽  
Economic Openness ◽  
Significant Negative Impact ◽  
Military Expenditures ◽  
The Developed Countries ◽  
The Impact ◽  
The Relationship

This study examines the relationship between terrorism and economic openness that takes into account both the number and intensity of terrorist incidents and the impact of government military expenditures on trade-GDP and foreign direct investment-GDP ratios for both developed and developing countries. It uses the dynamic GMM method to account for endogeneity in the variables. Deaths caused by terrorism have a significant negative impact on FDI flows, and the number of terrorist attacks is also found to be significant in hampering the countries’ ability to trade with other nations. The study also demonstrates that the developing countries exhibit almost similar results to our main analysis. The developed countries exhibit a negative impact of terrorism, but the regression results are not significant.

A Comparative Analysis of Drivers of Secondary Market Liquidity in Financial Markets for Investment Analysis

2019 ◽  
pp. 340-366
Author(s):  
Hakki Karatas ◽  
Nildag Basak Ceylan ◽  
Ayhan Kapusuzoglu
Keyword(s):  
Comparative Analysis ◽  
Stock Markets ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Bond Market ◽  
Secondary Market ◽  
Market Liquidity ◽  
Investment Analysis ◽  
Secondary Bond ◽  
The Impact

The purpose of this chapter is to examine the drivers of secondary bond market and stock market liquidity for investment analysis after global financial crisis in Turkey. The literature in Turkey mainly focuses only on the volatility of return for driving liquidity in both bond and stock markets. However, it is argued that other types of volatilities including domestic and international volatilities have also a deteriorating impact on secondary market liquidity in Turkey. In this context, it is empirically tested whether the volatility and/or uncertainty that stem from the FED and ECB policies within the last 10 years had a negative impact on liquidity both in government bond and stock markets. Moreover, the impact of non-residents in bond and stock markets on secondary market liquidity is examined by including their holdings in stock and bond market.

scholarly journals Opportunity or Crisis? Volatility and Leverage Effect in the World’s Largest Economies

2019 ◽  
Vol 9 (4) ◽  
pp. 1
Author(s):  
Amalendu Bhunia ◽  
Devrim Yaman
Keyword(s):  
Stock Market ◽  
Stock Markets ◽  
Market Volatility ◽  
Future Market ◽  
Market Returns ◽  
Stock Market Returns ◽  
The Us ◽  
The World ◽  
The Impact ◽  
The Relationship

This paper examines the relationship between asset volatility and leverage for the three largest economies (based on purchasing power parity) in the world; US, China, and India. Collectively, these economies represent Int$56,269 billion of economic power, making it important to understand the relationship among these economies that provide valuable investment opportunities for investors. We focus on a volatile period in economic history starting in 1997 when the Asian financial crisis began. Using autoregressive models, we find that Chinese stock markets have the highest volatility among the three stock markets while the US stock market has the highest average returns. The Chinese market is less efficient than the US and Indian stock markets since the impact of new information takes longer to be reflected in stock prices. Our results show that the unconditional correlation among these stock markets is significant and positive although the correlation values are low in magnitude. We also find that past market volatility is a good indicator of future market volatility in our sample. The results show that positive stock market returns result in lower volatility compared to negative stock market returns. These results demonstrate that the largest economies of the world are highly integrated and investors should consider volatility and leverage besides returns when investing in these countries.

Herding behavior in Islamic GCC stock market: a daily analysis

2018 ◽  
Vol 11 (2) ◽  
pp. 182-193 ◽  
Author(s):  
Mustapha Chaffai ◽  
Imed Medhioub
Keyword(s):  
Stock Market ◽  
Quantile Regression ◽  
Financial Markets ◽  
Stock Returns ◽  
Stock Markets ◽  
Content Type ◽  
Quantile Regression Analysis ◽  
Herd Behaviour ◽  
The Impact ◽  
Quantile Regression Method

Purpose This paper aims to examine the presence of herd behaviour in the Islamic Gulf Cooperation Council (GCC) stock markets following the methodology given by Chiang and Zheng (2010). Generalized auto regressive conditional heteroskedasticity (GARCH)-type models and quantile regression analysis are used and applied to daily data ranging from 3 January 2010 to 28 July 2016. Results show evidence of herd behaviour in the GCC stock markets. When the data are divided into down and up market periods, herd information is found to be statistically significant and negative during upward market periods only. These results are similar to those reported in some emerging markets such as China, Japan and Hong Kong, where stock returns perform more similarly during down market periods and differently during rising markets. Design/methodology/approach The authors present a brief literature on herd behaviour. Second, the authors provide some specificity of the GCC Islamic stock market, followed by the presentation of the methodology and the data, results and their interpretation. Findings The authors take into account the difference existing in market conditions and find evidence of herding behaviour during rising markets only for GCC markets. This result was confirmed after using the quantile regression method, as evidence of herding was observed only in highly extreme periods. Stock returns perform more similarly when market is down in Islamic GCC stock market. Research limitations/implications The research limitation consists in the fact that this work can be extended to compare the GCC stock markets with other markets in Asia such as Malaysia and Indonesia. Practical implications The principal implication consists in the fact that herding behaviour is limited in the GCC markets and Islamic finance can have an important contribution to moderate the behaviour in the financial markets. Social implications The work focusses on the role of ethics in the financial markets and their ability to reduce the impact of behavioural biases. Originality/value The paper studies the behaviour of investors in the Islamic financial markets and gives an idea about the importance of the behaviour in this particular market regarding its characteristics.

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