scholarly journals The effect of foreign investment flow on commonality in liquidity on the Brazilian stock market

2020 ◽  
Vol 31 (84) ◽  
pp. 425-443
Author(s):  
Claudio Pilar Silva ◽  
Márcio André Veras Machado
Keyword(s):  
Stock Market ◽  
Transaction Costs ◽  
Current Literature ◽  
Foreign Investment ◽  
Financial Crises ◽  
Stock Exchange ◽  
Foreign Investor ◽  
Foreign Investors ◽  
International Financial Crises ◽  
Investor Trading

ABSTRACT The aim of this study was to analyze the characteristics and determinants of commonality in liquidity in the Brazilian stock market. Since the internationalization of the Brazilian stock market (Bolsa, Brasil, Balcão - B3), the flow of foreign investment in Brazil has increased over the years, except in times of crisis. Thus, the present study argues that, in the Brazilian stock market, commonality in liquidity is partly determined by foreign investor trading. Despite the benefits obtained from foreign resources in the Brazilian stock market, it is important to analyze the effect of this flow of foreign investment into the Brazilian stock market. This paper contributes to the current literature by providing evidence for commonality in liquidity in the Brazilian stock market and by showing its stronger effect in periods of market decline. Therefore, investors pay greater attention to the risk of commonality in their portfolios when executing orders and to their trading timing due to the increase in transaction costs of the stocks most sensitive to commonality in liquidity. The study sample consisted of a set of companies listed on the Brazilian stock exchange from January 2007 through December 2017. To analyze commonality in liquidity, we used the model proposed by Karolyi, Lee, and Djik (2012) and by Qian, Tam, and Zhang (2014). To measure the influence of foreign investors on the Brazilian stock market, we used three measures based on Gonçalves and Eid (2016). The results showed that commonality occurs in the Brazilian stock market and that it peaks during international financial crises, as well as indicated that commonality might be higher in times of crisis due to capital constraint. In addition, the results showed that foreign investor participation partly determined commonality.

scholarly journals The Impact of Foreign Investor Trading Activity on Vietnamese Stock Market

2017 ◽  
Vol 9 (1) ◽  
pp. 109 ◽  
Author(s):  
Tri Minh Nguyen
Keyword(s):  
Stock Market ◽  
Trading Volume ◽  
Stock Exchange ◽  
Market Performance ◽  
Market Liquidity ◽  
Arch Model ◽  
Trading Activity ◽  
Foreign Investors ◽  
Investor Trading ◽  
The Impact

The empirical research examines the impact of net purchase of foreign investors on performance of stock market and market liquidity. In this study, market performance is proxied by VN-index, which measures growth of equity market and market liquidity is estimated by the trading volume of whole market. The data is collected in Vietnamese Stock Exchange in the period of 1215 intraday from 2011 to 2014. By using ARCH model, main findings of this research are: first, there is positive relationship between market performance and net purchase; second, performance of stock market is influence by lag factor and third, liquidity of market is affected negatively by trading activity of foreign investors.

scholarly journals NET BUYING (SELLING) INVESTOR ASING DAN PERUBAHAN KURS TERHADAP PERGERAKAN INDEKS PASAR

2007 ◽  
Vol 6 (1) ◽  
Author(s):  
Ignatius Roni Setyawan
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Stock Exchange ◽  
Foreign Exchange Rate ◽  
Foreign Investor ◽  
Foreign Investors ◽  
Stationary Test

The article tested net buying selling in Jakarta Stock Exchange. JSX index stated an amazing leap during 2006 however the performance was affect by foreign investor rather than domestic investors. The research indicates that net buying selling forces by foreign investors and the fund transfer during transaction will affect the foreign exchange rate (USD to IDR). The study argues the increasing rate of net buying selling also increase the volatility of exchange rate. Using TARCH model, the research found significant result that supported the argument. The research also test the robustness of data using stationary test. Therefore, the result statistically hold and TARCH model plus AR (1) also hold during the analysis.

THE IMPORTANCE OF LEGAL AND INSTITUTIONAL FUNDAMENTALS IN ATTRACTING FOREIGN INVESTMENT

2021 ◽  
Vol 4 (5) ◽  
pp. 32-37
Author(s):  
Hulkar Azimova ◽  
Keyword(s):  
Foreign Investment ◽  
Direct Investment ◽  
Investment Policy ◽  
Comprehensive System ◽  
Foreign Investor ◽  
Project Investment ◽  
Legal Regime ◽  
Foreign Investors ◽  
Legitimate Interests ◽  
Investment Agreement

This article describes the essence of foreign investment, the introduction of a comprehensive system of legal guarantees and benefits for foreign investors. The issues of strengthening the protection of the legitimate interests of investors in attracting foreign investment are also discussed.Keywords:investment project, investment commitment, investment policy, foreign direct investment, foreign investor rights, investment agreement, legal regime, investment visa

Revolutionizing the Stock Market With Blockchain

2021 ◽  
pp. 119-133
Author(s):  
Namrata Dhanda ◽  
Anushka Garg
Keyword(s):  
Stock Market ◽  
Transaction Costs ◽  
Stock Exchange ◽  
Exchange Mechanism ◽  
Suggested Model ◽  
Exclusive Contracts ◽  
Business Behavior ◽  
Experimental Findings

This chapter explores the drawbacks of conventional centralized share exchange frameworks, like those of higher transaction costs, central and vulnerable regulation to exploitation, and lack of revelation to business behavior and practices by introducing a revolutionary model that utilizes blockchain to establish a decentralized stock exchange and a transparent persistent economy. The suggested model utilizes exclusive contracts to implement the validity of the privileges of the owner and the proper accomplishment and settlement of the transactions, thereby mitigating the need for a centralized authority to ensure the accuracy of the stock exchange mechanism. The experimental findings convincingly demonstrate that the decentralized solution can provide lower transaction costs by progressively replacing brokerage costs and centralized officials' commissions with mining charges, which reward the miners for their backbreaking work in maintaining the system and enforcing the laws.

FOREIGN INVESTMENT AND THE POLITICAL ECONOMY OF INDONESIAN CAPITAL MARKET IN 2015-2016

2019 ◽  
Vol 7 (6) ◽  
pp. 340-348
Author(s):  
Faris Al-Fadhat ◽  
Mohammad Raihan Nadhir
Keyword(s):  
Political Economy ◽  
Interest Rates ◽  
Foreign Investment ◽  
Capital Market ◽  
International Political Economy ◽  
Stock Exchange ◽  
Economic Stability ◽  
Foreign Investors ◽  
The Impact ◽  
The Capital Market

Purpose of the study: This article examines the impact of foreign investment—especially through the capital market—towards the economic stability and strategic policy in Indonesia. Despite being a member of G20, a group of states with the world’s highest Gross Domestic Products, Indonesia is still a developing state whose need for investment to support economic growth is high. On the other side, Indonesia has a low capital accumulation rate due to low people’s savings which inhibits the development projects. Therefore, the government prioritizes the incoming flow of foreign investment. Methodology: This study applies the international political economy approach to provide critical analysis of Indonesian contemporary foreign investment, especially in the capital market. The data used is the investment activities through the Indonesia Stock Exchange during 2015-2016. Main Findings: It argues that Indonesia’s considerable dependence on investment has enabled foreign investors to play the capital flow to influence the national economic stability for their interests. Such influence was a result of two strategies: (i) the transaction domination in the capital market through the Indonesia Stock Exchange, and (ii) the alliance with financial actors in accessing inside information—which is not commonly owned by domestic investors. Implications/Applications: This study suggests that the politics of foreign investors has contributed towards the changes of government policies in the financial sectors to facilitate the process and to ensure the flow of foreign investment to Indonesia. Such policies include the government’s control of interest rates, fiscal policy, as well as currency stability through macroprudential regulation. Novelty/Originality: Essentially, the capital market is not politically neutral. It has been used by foreign investors to augment their interests by dominating transactions and building political alliances at the domestic level.

Day Of The Week And Its Effect On Stock Market Volatility: Evidence From An Emerging Market

2013 ◽  
Vol 29 (6) ◽  
pp. 1727 ◽  
Author(s):  
Omar Farooq ◽  
Mohammed Bouaddi ◽  
Neveen Ahmed
Keyword(s):  
Stock Market ◽  
Stock Exchange ◽  
Emerging Market ◽  
International Markets ◽  
Conditional Variance ◽  
Market Volatility ◽  
Stock Market Volatility ◽  
Foreign Investors ◽  
High Volatility ◽  
Day Of The Week

This paper investigates the day of the week effect in the volatility of the Saudi Stock Exchange during the period between January 7, 2007 and April 1, 2013. Using a conditional variance framework, we find that the day of the week effect is present in the volatility. Our results show that the lowest volatility occurs on Saturdays and Sundays. We argue that due to the closure of international markets on Saturdays and Sundays, there is not enough activity in the Saudi Stock Exchange. As a result, the volatility is the lowest on these days. Our results also show that the highest volatility occurs on Wednesdays. We argue Wednesday, being the last trading day of the week, corresponds with the start of four non-trading days (Thursday through Sunday) for foreign investors. Fearing that they will be stuck up with stocks in case some unfavorable information enters the market, foreign investors tend to exit the market on Wednesdays. As a result of excessive trading, there is high volatility on Wednesdays.

Australia will seek foreign infrastructure money

2019 ◽  
Keyword(s):  
Population Growth ◽  
Foreign Investment ◽  
Foreign Investor ◽  
State Governments ◽  
Foreign Investors ◽  
Content Type ◽  
Competitive Disadvantage ◽  
The Government ◽  
Budget Surplus ◽  
Tax Cuts

Significance Tax cuts were announced earlier this month for foreign investment in infrastructure, including transport, energy, water and communication. The move follows concerns that spending on infrastructure is too low for Australia’s projected population growth. Impacts The stimulus does not involve any new spending and will require the support of state governments, which co-fund some projects. Tax concessions will help ease a competitive disadvantage faced by foreign investors, but there will still be market barriers. Uncertain confidence in the current government could depress foreign investor interest. If it maintains the budget surplus, the government will keep backbenchers’ support.

scholarly journals Establishment of a Company and Share Acquisitions in Turkey by Foreigner Investors

2019 ◽  
Author(s):  
Mustafa Topaloğlu
Keyword(s):  
Foreign Capital ◽  
Stock Exchange ◽  
Foreign Investor ◽  
Foreign Direct Investments ◽  
Government Bonds ◽  
Foreign Investors ◽  
Foreign Companies ◽  
The Republic ◽  
Economic Assets ◽  
A Company

Relating to the establishment and acquisition of a company in Turkey by foreign investors, Foreign Direct Investments Law No.4875, FDI has entered into force on 17.06.2003. FDI formed a notification-based system rather than an approval-based system for foreigners to establish a new company and to take over company shares. Accordingly, company information regarding foreign investors will be notified to the General Directorate of Incentive Implementation and Foreign Capital via “Electronic Incentive Implementation and Foreign Capital Information System”. Foreign investment means establishment of a new company by a foreign investor or share acquisitions of an existing company, any percentage of shares acquired outside the stock exchange or 10 percentage or more of the shares/voting power of a company acquired through the stock exchange, by means of the following economic assets: assets acquired from abroad by the foreign investor which are capital in cash in the form of convertible currency bought and sold by the Central Bank of the Republic of Turkey, stocks and bonds of foreign companies excluding government bonds, machinery and equipment, industrial and intellectual property rights; or assets acquired from Turkey by foreign investor which are reinvested earnings, revenues, financial claims, or any other investment-related rights of financial value, rights for the exploration and extraction of natural resources. According to Article 4 of the Regulation for Implementation of Foreign Direct Investment Law, the Ministry of Economy shall provide information on the companies within the scope of foreign direct investments from Trade Registry Offices and related public institutions and organizations.

The Informative Content of the Net-Buy Information of Institutional Investors in the Taiwan Stock Market: A Revisit Using Conditional Analysis

2006 ◽  
Vol 09 (04) ◽  
pp. 661-697 ◽  
Author(s):  
Chaoshin Chiao ◽  
David C. Cheng ◽  
Yunju Shao
Keyword(s):  
Stock Market ◽  
Transaction Costs ◽  
Institutional Investors ◽  
Conditional Analysis ◽  
Economic Recovery ◽  
Foreign Investors ◽  
Security Investment ◽  
Investment Trust ◽  
Informative Content

Chiao and Lin (2004) argue that the strategies following the investment pace of security investment trust companies (SITCs) are more profitable than the market and those following foreign investors (FIs) and security dealers (SDs) in the Taiwan stock market. We reexamine their results under various market events and economic states. Employing the close-to-close returns, our results are mostly consistent with Chiao and Lin (2004) except that, during the period of economic recovery, following FIs is more profitable. However, employing the open-to-close returns and considering transaction costs, none of the strategies are profitable.

scholarly journals Protecting the Rights of Local Shareholders under the Saudi rules for Qualified Foreign Financial Institutions Investments in Listed Shares: قانون الاستثمار الأجنبي في سوق الأسهم السعودية: دراسة تأصيلية مقارنة مع دول مجلس التعاون الخليجي ودولة استراليا

2020 ◽  
Vol 4 (8) ◽  
Author(s):  
Abdullah Mushkus Almutairi
Keyword(s):  
Financial Institutions ◽  
Foreign Investment ◽  
Stock Exchange ◽  
Local Economy ◽  
Exchange Market ◽  
Foreign Investments ◽  
Research Project ◽  
Positive Role ◽  
Foreign Investors ◽  
Local Stock

Recently, the Saudi Capital Market Authority (CMA) opened the door for foreign investors to invest directly in the stock exchange market (Tadawul) to gain more welfare from their investments. Along with this step, the CMA released a set of Rules for Qualified Foreign Financial Institutions Investments (RQFFII) in Listed Shares 2015 that aimed to attract and protect the shareholders' rights. In this research project, the RQFFII have been examined to discover the level of attraction that these Saudi rules offer to foreign investment. The project also aimed to highlight strengths and weaknesses in the rules with regard to the protection shareholders' rights. This thesis explored the possible influence of foreign investments in the Saudi stock exchange. The research project aimed to increase the CMA and shareholders' awareness and knowledge in regard to these rules which lead to more protection of the local stock exchange. In order to achieve this goal, this thesis used a qualitative method by comparing these rules to the regulations of other countries that have a successful record, such as the Gulf Countries Council (GCC) and Australia. It has also analysed reports of the international organization to support the findings. The findings showed that on the one hand the current rules are not sufficiently attractive, and on the other hand are restricted and able to provide enough protection to the domestic market and shareholders. In addition, the results support the positive role of foreign investors on the local stock exchange market and its regulations. The findings implied a correlation between regulations and foreign investment flows in regard to attracting foreign investments and protecting the local economy. Hence, Saudi policymakers use the gradual opening of foreign investors to its stock exchange, this project found that the amended rules in 2016 may lead to more foreign investment inflow.

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