The Baltic Dry Index as a Predictor of Global Stock Returns, Commodity Returns, and Global Economic Activity

2011 ◽  
Author(s):  
Gurdip S. Bakshi ◽  
George Panayotov ◽  
Georgios Skoulakis
Keyword(s):  
Stock Returns ◽  
Economic Activity ◽  
The Baltic ◽  
Baltic Dry Index ◽  
Global Stock

scholarly journals Does the Baltic Dry Index predict economic activity in South Africa? A review from 1985 to 2016

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Kurt Sartorius ◽  
Benn Sartorius ◽  
Dino Zuccollo
Keyword(s):  
South Africa ◽  
Economic Activity ◽  
Research Question ◽  
Share Price ◽  
Series Data ◽  
Published Data ◽  
Data Set ◽  
Wide Range ◽  
The Baltic ◽  
Baltic Dry Index

Background: The ability of the Baltic Dry Index to predict economic activity has been evaluated in a number of developed and developing countries. Aim: Firstly, the article determines the primary factors driving the dynamics of the Baltic Dry Index (BDI) and, secondly, whether the BDI can predict future share price reactions on the Johannesburg Stock Exchange All Share Index (JSE ALSI), South Africa. Setting: This article investigates the dynamics and predictive properties of the BDI in South Africa between 1985 and 2016. Methods: The article uses a review of a wide range of published data and two time-series data sets to adopt a mixed methods approach. An inductive contents analysis is used to answer the first research question and a combination of a unit root test, correlation analysis and a Granger causality model is employed to test the second research question. Results: The results show that the BDI price is primarily driven by four underlying constructs that include the supply and demand for dry bulk shipping, as well as risk, cost and logistics management factors. Secondly, the results indicate a break in the BDI data set in July 2008 that influences a fundamental change in its relationship with the JSE ALSI index. In the pre-break period (1985 to 2008), the BDI is positively correlated with the ALSI (0.837, α = 0.05) before sharply diverging in the second period from August 2008 to 2016. In the first period, the BDI showed an optimal lag period of 6 months as a predictor of the ALSI index, but this predictive ability ceases after July 2008. The article makes a two-part contribution. Firstly, it demonstrates that the BDI is a useful predictor of future economic activity in an African developing country. Secondly, the BDI can be incorporated in government and industry sector planning models as a variable to assess future gross domestic product trends. Conclusion: The study confirms that the BDI is only a reliable indicator of future economic activity when the supply of shipping capacity is well matched with the demand.

scholarly journals Are Bulk/Container Shipping Companies Improving Compared to the Baltic Dry Index?

2019 ◽  
Vol 15 (12) ◽  
pp. 1
Author(s):  
Samuel D. Barrows
Keyword(s):  
Economic Activity ◽  
Stock Price ◽  
Time Frame ◽  
Container Shipping ◽  
Shipping Industry ◽  
Freight Rates ◽  
Industry Competition ◽  
Before And After ◽  
The Baltic ◽  
Baltic Dry Index

This study evaluates the 2000-2017 time frame and assesses the performance of the bulk/container shipping industry before and after the Great Financial Crisis (GFC) in relation to the Baltic Dry Index (BDI) and two other benchmarks in a variety of combinations. This study evaluates two different period portfolios of shipping companies based on their stock price total return performance. Five cases are presented that demonstrate portfolio improvement when comparing performance after the GFC with performance before the GFC in relation to the BDI and the other benchmarks. Included are discussions on shipping industry competition, vessel utilization and freight rates plus the BDI as an economic activity predictor.

scholarly journals The Baltic states and Europe: common factors of economic activity

2008 ◽  
Vol 8 (1) ◽  
pp. 75-96 ◽  
Author(s):  
Ludmila Fadejeva ◽  
Aleksejs Melihovs
Keyword(s):  
Economic Activity ◽  
Common Factors ◽  
Baltic States ◽  
The Baltic

From Main Street to Wall Street

2021 ◽  
Author(s):  
Jesper Rangvid
Keyword(s):  
Economic Growth ◽  
Stock Market ◽  
Business Cycle ◽  
Financial Markets ◽  
Stock Returns ◽  
Economic Activity ◽  
Wall Street ◽  
Business Cycle Fluctuations ◽  
Main Street ◽  
Long Run

From Main Street to Wall Street examines the relation between the economy and the stock market. It discusses the academic theories and empirical facts, and guides readers through the fascinating interaction between economic activity and financial markets. Itexamines what causes long-run economic growth and shorter-term business-cycle fluctuations and analyses their impact on stock markets. From Main Street to Wall Street also discusses how investors can use knowledge of economic activity and financial markets to formulate expectations to future stock returns. The book relies on data, and figures and tables illustrate arguments and theories in intuitive ways.In the end, From Main Street to Wall Street helps academic scholars and practitioners navigate financial markets by understanding the economy.

Introduction

2021 ◽  
pp. 1-6
Author(s):  
Jesper Rangvid
Keyword(s):  
Economic Growth ◽  
Business Cycle ◽  
Stock Returns ◽  
Economic Activity ◽  
Final Part ◽  
Stylized Facts ◽  
Long Run ◽  
Key Concepts ◽  
The Business Cycle

Chapter 1 contains an overview of the book. Part I introduces key concepts, definitions, and stylized facts regarding long–run economic growth and stock returns.Part II analyses the relation between economic growth and stock returns in the long run. Part III examines the shorter-horizon relation between economic growth and stock returns: the relation over the business cycle. Part IV explains how to make reasonable projections for economic activity, both for the short and the long run. Part V deals with expected future stock returns. The final part, a short one including one chapter only, explains how one can use the insights from the book when making investments.

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