Uncharted waters: Investors get access to foreign exchange-traded funds

2021 ◽  
pp. 54-70
Author(s):  
S. R. Moiseev
Keyword(s):  
Financial Markets ◽  
Foreign Exchange ◽  
Driving Forces ◽  
Market Competition ◽  
Secondary Market ◽  
Portfolio Diversification ◽  
Exchange Traded Funds ◽  
Investment Funds ◽  
Retail Investors ◽  
Securities Trading

In 2022, Russian investors will get access to the wide possibilities of the global financial market. The Bank of Russia opens the market for foreign exchange-traded funds (ETFs) — one of the main savings instruments for households. The economy of ETFs differs from other investment funds, whose shares do not have secondary market. The opening of the ETFs market is intended to solve a number of issues for retail investors: moving away from the preference to individual foreign shares towards portfolio diversification, cost reduction, ensuring sustainable profitability, abandoning the aggressive securities trading, and supporting market competition. Soon, ETFs will be one of the driving forces in financial markets. However, their rapid growth is fraught with little-studied effects.

Peter J. Montiel, Pierre-Richer Agenor, and Nadeem ul Haque. Informal Financial Markets in Developing Countries: A Macroeconomic Analysis. Published in the "Advances in Theoretical and Applied Economics" series edited by Homa Motamen-Scobie. Oxford: Blackwell. 1992. i-xi + 212 pp., including appendices. Hardbound. £40.00.

1993 ◽  
Vol 32 (3) ◽  
pp. 332-335
Author(s):  
Willem Van der Geest
Keyword(s):  
Developing Countries ◽  
Financial Markets ◽  
Foreign Exchange ◽  
Capital Mobility ◽  
Banking System ◽  
Exchange Rate Policy ◽  
Informal Markets ◽  
Financial Repression ◽  
Macroeconomic Analysis ◽  
Econometric Analyses

This volume reviews the nature and scope of informal financial markets in developing countries and elaborates on the theoretical and conceptual models which analyse 'financial repression' and other aspects of government intervention in financial markets. It also focuses on the consequences which the prevalence of informal financial markets in developing countries may have for monetary and exchange rate policy. In particular, it attempts to capture the functioning of informal, unregulated markets into macroeconomic models, working towards a general eqUilibrium model with informal financial markets. Two types of informal markets are analysed. The first are for informal lending at terms and conditions which differ greatly from those prevailing in the official banking system. The second are the 'parallel' markets for foreign exchange which tend to emerge in response to quantity restrictions on trade and administered allocation of foreign exchange to certain users at official rates, which are well below those on the parellel markets. The key question is whether these informal markets change the efficacy of monetary and credit policy-and, if they do, to what extent and in what direction? Two supporting appendices present econometric analyses of the efficiency of parallel currency markets and the degree of capital mobility in developing countries.

Commodity Exchange-Traded Funds

2018 ◽  
Author(s):  
Christopher Milliken
Keyword(s):  
Portfolio Diversification ◽  
Futures Contracts ◽  
Spot Price ◽  
Exchange Traded Funds ◽  
Investment Strategies ◽  
Regulatory Structure ◽  
Commodity Exchange ◽  
Asset Class ◽  
Exchange Traded Fund

Commodity exchange-traded funds (ETCs), which debuted in 2004, enable investors to access an asset class previously difficult or expensive to access. Although a small segment of the overall exchange-traded fund (ETF) universe, ETCs have grown in popularity with both speculators and investors looking for long-term portfolio diversification. Examples of the types of commodities that are now accessible through ETCs include gold, oil, and agricultural. The literature on ETCs is limited, but academic and industry work has centered on using futures contracts to replicate the performance of the underlying commodities spot price as well as the effect additional capital has had on the integrity of the futures market. This chapter covers this topic by reviewing the growth, investment strategies, and regulatory structure of ETCs as well as the underlying effects these funds have had on the underlying markets with which they engage.

Foreign Direct Investment

2017 ◽  
Author(s):  
Yilmaz Akyüz
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Financial Markets ◽  
Foreign Exchange ◽  
Direct Investment ◽  
Balance Of Payments ◽  
Productive Capacity ◽  
Cross Border ◽  
Direct Contribution ◽  
High Profit

Recent years have also seen increased openness of EDEs to foreign direct investment (FDI) in search for faster growth and greater stability. However, FDI is one of the most ambiguous and least understood concepts in international economics. Common debate is confounded by several myths regarding its nature and impact. It is often portrayed as a stable, cross-border flow of capital that adds to productive capacity and meets foreign exchange shortfalls. However, the reality is far more complex. FDI does not always involve inflows of financial or real capital. Greenfield investment, unlike mergers and acquisitions, makes a direct contribution to productive capacity, but can crowd out domestic investors. FDI can induce significant instability in currency and financial markets. Its immediate contribution to balance-of-payments may be positive, but its longer-term impact is often negative because of high-profit remittances and import contents.

Financial Markets and Exchanges Law

2021 ◽  
Keyword(s):  
Financial Markets ◽  
New Technology ◽  
Payment Systems ◽  
Regulation Of Financial Markets ◽  
Market Location ◽  
Clearing And Settlement ◽  
The Uk ◽  
Securities Trading ◽  
Market Infrastructure ◽  
Financial Technology

The book provides a comprehensive and authoritative analysis on the regulation of financial markets and market infrastructure. It focuses on stock markets and exchanges, associated trading, clearing, and settlement, and on payment systems, set in their historical and current contexts. This new edition addresses a number of major developments that have impacted the UK, wider European and international financial markets, such as within the UK, the PRA, the FCA and the Bank of England have become established financial regulators, each with its distinguishing responsibilities; MiFID has been substantially revised and strengthened through new directly applicable EU regulation; MiFID 2 also addresses the challenges posed by the use of fast-technology such as high frequency and algorithmic trading; and new technology is beginning to make an impact on the infrastructure of financial markets. This new edition includes updated content on the growing importance of financial technology with two new chapters on the emerging impact of financial technology on markets and on the regulation of markets. There is also a new chapter on MiFID 2 and MiFIR – the new securities trading architecture that will see the introduction of a new trading venue as well as significant changes to and the pre- and post-trade transparency and reporting regime. The introduction of mandatory trading of derivatives on trading venues is addressed together with the related post-EMIR regime for the mandatory clearing of certain classes of derivatives. Chapters on the role of the European Commission and ESMA have been updated, and consideration is given to the possible implications of Brexit for market location and access

The effect of auditor narcissism on audit market competition

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hojat Mohammadi ◽  
Mahdi Salehi ◽  
Meysam Arabzadeh ◽  
Hassan Ghodrati
Keyword(s):  
Financial Markets ◽  
Significant Relationship ◽  
Design Methodology ◽  
Audit Quality ◽  
Stock Exchange ◽  
Market Competition ◽  
Competitive Pressure ◽  
Content Type ◽  
Listed Firms ◽  
Audit Market

Purpose This paper aims to assess auditor narcissism’s effect on audit market competition (auditor concentration, clients’ concentration and competitive pressure). Design/methodology/approach This paper’s method is descriptive-correlational based on published information from listed firms on the Tehran Stock Exchange from 2012 to 2018 using a sample of 188 firms (1,310 observations). The method used for hypothesis testing is linear regression using panel data. Findings The results show a negative and significant relationship between auditor narcissism and audit market competition and its indices, including auditor concentration, clients’ concentration and competitive pressure. Moreover, a positive and significant relationship was observed between audit quality and audit market competition and its indices, including auditor concentration, client concentration and competitive pressure. Originality/value To analyzes competition indices in the audit market (auditor concentration, clients’ concentration and competitive pressure). The variable is assessed once more using the exploratory factor analysis of the so-called three variables single variable, named audit market competition. So the central question of the study is investigated within a broader sense. Moreover, as the present study is carried out in the emergent financial markets with extremely competitive audit markets to figure out the effect of auditors’ intrinsic characteristics on such markets’ competitiveness, it can provide useful information in this field.

scholarly journals Exchange-traded products in Germany: development and substitution of exchange-traded funds, exchange-traded commodities and exchange-traded notes

Equilibrium ◽  
2018 ◽  
Vol 13 (4) ◽  
pp. 643-665
Author(s):  
Adam Marszk
Keyword(s):  
Value Added ◽  
Stock Exchanges ◽  
Exchange Traded Funds ◽  
Investment Funds ◽  
Market Shares ◽  
Time Period ◽  
Fast Development ◽  
Exchange Traded Notes ◽  
Insight Into ◽  
Total Market

Research background: Exchange-traded products (ETPs) are one of the most rapidly growing categories of financial products. Their fast development has been boosted by innovative features. Three main categories of ETPs are exchange-traded funds (ETFs), exchange-traded commodities (ETCs) and exchange-traded notes (ETNs). ETCs and ETNs remain least known, even though their number on some stock exchanges is high. In Europe, Germany is one of the largest and most active ETPs markets. ETCs and ETNs are debt instruments, in contrast with the most popular ETFs, which are equity securities. Therefore, they offer investors different advantages, but also expose them to other types of risks. Purpose of the article: The key aim of the article is to present the features of ETPs and to provide in-depth insight into the issues linked with the development of ETPs market in Germany, with the special emphasis on the ETCs and ETNs. Methods: In the main empirical part of the article, German ETPs market is analyzed using descriptive statistics and technological substitution framework (employed for the analysis of innovations in order to evaluate the changing market shares of, first, ETFs versus ETCs and ETNs, as well as, second, ETFs versus other types of investment funds). The period of the analysis is 2010–2016 in the former case and 2007–2016 in the latter. Findings & Value added: Share of ETPs other than ETFs in the total market in Germany remains low. Even though the market position of the leading products, i.e. ETFs, is still very strong, some substitution has been observed, especially after 2015. Predictions indicate that this trend will continue in the upcoming years. The results of the analysis of the investment funds’ market confirm the substitution between ETFs and traditional investment funds over 2007–2017, in particular in the first years of this time period.

scholarly journals Kelly's Strategy Analysis in Optimizing Investment Portfolios in Foreign Exchange

2019 ◽  
Vol 8 (2S7) ◽  
pp. 245-250
Keyword(s):  
Financial Markets ◽  
Foreign Exchange ◽  
Optimal Portfolio ◽  
Minimal Risk ◽  
Investment Portfolio ◽  
Strategy Analysis ◽  
Average Value ◽  
Portfolio Returns ◽  
Strategy Model ◽  
Investment Portfolios

Investments in financial markets not only pay attention to promising profits, but also need to consider the risks that follow. Risks can be minimized by establishing an investment portfolio. This research was conducted with the aim of analyzing optimal portfolios on foreign exchange investments, so that investments made provide maximum returns at certain risks, or minimal risk on certain returns. The data analyzed in this study are foreign exchange traded at Bank Indonesia. Data analysis is carried out quantitatively using the Kelly Strategy model. The steps: (i) Calculation of individual foreign exchange returns, (ii) Determine the average value of individual foreign exchange returns, (iii) Determine the optimal portfolio using the Kelly strategy approach, and (iv) Determine portfolio returns and risks. Based on the results of the analysis obtained the allocation of weights that provide returns and risks to the optimal portfolio. A 95% USD currency is an optimal portfolio of the five currencies used. So that it can be used as a consideration for investors, in making investment decisions in the foreign exchange being analyzed.

scholarly journals Return spillover across Bitcoin markets and foreign exchange pairs dominated in major trading currencies

2020 ◽  
Vol 12 (3) ◽  
pp. 123-160
Author(s):  
Muhammad Owais Qarni ◽  
Saqib Gulzar
Keyword(s):  
Foreign Exchange ◽  
Portfolio Diversification ◽  
Foreign Exchange Markets ◽  
Significant Implication ◽  
Risk Minimization ◽  
Dynamic Nature ◽  
Market Return ◽  
Exchange Markets ◽  
Short Horizon ◽  
Asymmetry Measure

This study examines the dynamic nature of return spillover across Bitcoins indices and foreign exchange pairs denominated in 6 major trading currencies. The findings of spillover index, Spillover Asymmetry Measure (SAM) and frequency connectedness methodologies indicate that return spillover across Bitcoin markets and foreign exchange pairs dominated in six major trading currencies is very low. The intra-market return spillover for the Bitcoin markets and foreign exchange pairs is found to be significant. Presence of asymmetry in the return spillover is also found. Evidence indicates that return spillover are dominated in short horizon, with significant spillover occurring within 4 days of an event. The low integration of Bitcoin markets with the foreign exchange markets provide significant implication for portfolio diversification and risk minimization.

Global markets as global conversations

2007 ◽  
Vol 27 (5-6) ◽  
Author(s):  
Karin Knorr Cetina
Keyword(s):  
Financial Markets ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Global Market ◽  
Global Markets ◽  
Economic Aspects ◽  
Exchange Market ◽  
Conversational Interaction ◽  
Interaction System ◽  
Streaming Flow

AbstractFinancial markets are one of the most iconic and influential structures of our time. The foreign exchange market in particular is also the most genuinely global market—and the largest market worldwide, with an average daily turnover of 1.8 trillion US dollars. The foreign exchange market is also structurally like a massive conversational interaction system; many of its transactions are conducted through electronically mediated ‘conversations’. Transactions not conducted through conversations but through an electronic broker also display a sequential turn-taking structure. In this paper, I analyze the streaming ‘flow’ architecture of this market in terms of its sequential structures and their technological and economic aspects. I also specify and analyze several types of texted sequences that articulate and illustrate the response-based interaction system of this market. I argue that informational sequences are particularly important; the informational liquidity of this market sustains and supports the market's economic liquidity.

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