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

Author(s):  
Hakki Karatas ◽  
Nildag Basak Ceylan ◽  
Ayhan Kapusuzoglu

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.

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna

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.


2009 ◽  
Vol 44 (6) ◽  
pp. 1403-1426 ◽  
Author(s):  
Paul Brockman ◽  
Dennis Y. Chung ◽  
Xuemin (Sterling) Yan

AbstractWe examine the impact of block ownership on the firm’s trading activity and secondary-market liquidity. Our empirical results show that block ownership takes potential trading activity off the table relative to a diffuse ownership structure and impairs the firm’s market liquidity. These adverse liquidity effects disappear, however, once we control for trading activity. Our findings suggest that block ownership is detrimental to the firm’s market liquidity because of its adverse impact on trading activity—a real friction effect. After controlling for this real friction effect, we find little evidence that block ownership has a negative impact on informational friction. Our results suggest that the relative lack of trading, and not the threat of informed trading, explains the inverse relation between block ownership and market liquidity.


e-Finanse ◽  
2017 ◽  
Vol 13 (4) ◽  
pp. 110-126 ◽  
Author(s):  
Jerzy Różański ◽  
Paweł Kopczyński

AbstractThe recent financial crisis that began in 2007, also known as the Global Financial Crisis, had a huge influence on the financial situations of enterprises and financial institutions around the world. The situation on world stock markets was also strongly affected by the crisis. As the behavior of investors may be affected by various factors which can impact their decisions on the stock exchanges, some of them may be unable to act in a rational manner and make the right decisions. The huge drop in share prices on world stock markets was visible in the early stages of the crisis. The share price does not always reflect the real situation of the company. The main purpose of this article is to evaluate the influence of the recent financial crisis on the financial situation and performance of Polish listed companies. Financial ratios will be utilized to evaluate the real changes in the financial situation of Polish listed companies during the crisis. A large group of companies will be covered by the survey in order to assess the impact of macroeconomic factors on the financial situations of enterprises in different phases of the crisis. Market tests will not be applied because they may be affected by changes in share prices which in turn are often affected by irrational decision-making and fear.


2017 ◽  
Vol 20 (2) ◽  
pp. 229-256
Author(s):  
Linda Karlina Sari ◽  
Noer Azam Achsani ◽  
Bagus Sartono

Stock return volatility is a very interesting phenomenon because of its impact on global financial markets. For instance, an adverse shocks in one country’s market can be transmitted to other countries’ market through a particular mechanism of transmission, causing the related markets to experience financial instability as well (Liu et al., 1998). This paper aims to determine the best model to describe the volatility of stock returns, to identify asymmetric effect of such volatility, as well as to explore the transmission of stocks return volatilities in seven countries to Indonesia’s stock market over the period 1990-2016, on a daily basis. Modeling of stock return volatility uses symmetric and asymmetric GARCH, while analysis of stock return volatility transmission utilizes Vector Autoregressive system. This study found that the asymmetric model of GARCH, resulted from fitting the right model for all seven stock markets, provides a better estimation in portraying stock return volatility than symmetric model. Moreover, the model can reveal the presence of asymmetric effects on those seven stock markets. Other finding shows that Hong Kong and Singapore markets play dominant roles in influencing volatility return of Indonesia’s stock market. In addition, the degree of interdependence between Indonesia’s and foreign stock market increased substantially after the 2007 global financial crisis, as indicated by a drastic increase of the impact of stock return volatilities in the US and UK market on the volatility of Indonesia’s stock return.


2021 ◽  
Vol 5 (1) ◽  
pp. 50-60
Author(s):  
Greta Keliuotytė-Staniulėnienė ◽  
Kamilė Daunaravičiūtė

This paper summarizes the relevant researches in the area of the green bond market within the perspective of the performance of the global green bond market in the face of the COVID-19 pandemic. Despite the rapid expansion of the green bond market during the last decade, this market has also experienced the consequences of the COVID-19 pandemic. The researches on the effect of COVID-19 and its induced crisis on the green bond markets are still fragmentary; therefore, the main purpose of this research is to evaluate the impact of the COVID-19 pandemic on the global green bond market. To reach the purpose, the methods of literature analysis, and correlation-regression analysis are used. In the first section of the paper, the research problem is presented; in the second part the analysis of academic literature is conducted; in the third part the design of the research is described, and in the fourth part the results of the assessment of the impact of COVID-19 pandemic on the global green bond market are discussed. The results of the research revealed that the spread of the COVID-19 pandemic appeared to have a negative impact on the performance of the S&P Green Bond Index. The market reaction to deaths caused by COVID-19 infection proved to be stronger than the reaction to confirmed cases of COVID-19 infection. However, after a sufficiently significant negative shift, which was observed in the first quarter of 2020, the S&P Green Bond Index regained its upward trend, which continued for the rest of the year.


Author(s):  
Marek Palasinski

The main purpose of this study was to explore the impact of downsizing and efficiency measures on two key elements of operational performance - fraud detection and fraud reporting. Qualitative data were obtained from ethnographic observations of two major multinational insurance companies, which were already examined before the Global Financial Crisis, and subjected to an inter - and intra - business comparative analysis of anti - fraud resources. The paper points out a big discrepancy in opinions on the downsizing effects between junior staff and their supervisors. Whereas the latter present them as enabling the business to deal with suspicious claims more quickly, the former offer a contrastingly different view in which the constantly growing pressure often lea ds to suspicious claims getting approved. By validating the practical implications of a purposefully adapted version of resource - based theory, the paper illustrates the inviability of subjecting anti - fraud resources to the same levels of downsizing and efficiency as other business resources. Although the literature on the general negative impact of downsizing on the broadly - defined operational performance is growing, this is the first major study to examine its impact on insurance anti - fraud processes and illustrate their changes following the Global Financial Crisis.


2019 ◽  
Vol 3 (1) ◽  
pp. 7-13
Author(s):  
Dety Nurfadilah

The focus on the bank bailout has been increased since the global financial crisis in 2008 in most countries. However, previous studies often discover the relationship between bailout and corporate governance. In this study, bank bailout literature will be reviewed with the focus on the impact of bailout on bank financial performance and bank risk-taking during the financial crisis. Multi-step strategy is used to collect the data from 2000 to 2016. From the 7 papers were chosen based on the criteria. This systematic review has shown that the bank bailout has a positive impact on financial performance, however, it has a negative impact on bank risk-taking for a longer period.


2008 ◽  
Vol 6 (1) ◽  
pp. 1
Author(s):  
Francisco Eduardo de Luna e Almeida Santos

The aim of this paper is to measure the endogenous relationship between stock and bond markets. To recover the structural form of this relationship, the author applied the method of identification through heteroskedasticity. Both coefficients were found to be negative which is consistent with the notion that, given an opportunity cost of capital, the returns move in opposite directions in order to promote the equilibrium of the capital flow. However, only the coefficient that measures the impact of bond market over stock markets was significantly different from zero. Thus, the intensity of this relationship also depends on the relative size of the markets under study.


Author(s):  
Yuliia Lola

The technical structure of society and the existing concept of capitalist economic development cannot meet the current challenges of the XXI century, so it is important to consider the anti-crisis potential of countries, taking into account the conditions of its formation and use. Radical changes in the conditions of formation and attraction of anti-crisis potential require clarification of its essence taking into account the adaptability of public administration, technical capabilities of social production, as well as the human ability to make complex decisions on more efficient combination of resources in uncertainty. In terms of the 6th and 7th technological system, the "potential of regional development" is proposed to be defined as the ability of societies of certain territories to create metacognitive technologies to increase resource efficiency and the ability of societies to quickly integrate into the digital world. The development potential provides the system's ability to adapt to crisis phenomena and maintain the trend of economic growth. The anti-crisis potential (as additional), is involved in the impact of crisis phenomena and helps to overcome the negative impact that has led to a sharp decline in economic growth. A characteristic feature of the "crisis potential" concept is the ability to attract additional resources during the crisis, with the decisive role played by the level of adaptability of public administration, technical capabilities of social production, as well as the ability of labor to make complex decisions in uncertainty. Anti-crisis potential is an opportunity that in the process of anti-crisis management is transformed into an effective mechanism for counteracting crisis phenomena. In countries with strong economies (USA, Austria, Germany, France, Spain) there is a significant drop in GDP per capita during the global financial crisis of 2020, which was triggered by the coronavirus SARS-CoV-2. At the same time, there are countries (Israel, China), whose economic condition not only has not deteriorated, but undergone even further sustainable development. This trend is due to the fact that for some systems the crisis is not only a threat, but also provides opportunities for the formation of new combinations of resources, which leads to a significant economic effect and further development. If we conduct research the trends of countries' response to global crises and exit from crises, we can see different trajectories. It has been proven that some countries in the world are strengthening their economies after economic crises, so the term "economic potential of the global crisis" has been proposed. The economic potential of the crisis is the possibility for strong economic growth in the region, the ability of the national economy to achieve a strategic goal by using changes in the international market, changing the positions on the international arena.


2013 ◽  
Vol 7 (2-3) ◽  
pp. 109-113
Author(s):  
Josip Juračak ◽  
Dario Vukalović

The purpose of this paper is to explore recent trends in the Croatian agriculture and forestry business sector and compare it with the Croatian economy as a whole. This topic is considered interesting because recent business years have been heavily influenced by the global financial crisis. Many authors would say that agriculture, as a specific branch of the economy, does not follow general trends, but is affected rather by other factors, especially such as environmental ones. The global financial crisis had the most negative impact on the Croatian economy in the 2008/2009 period, when the GDP growth rate tumbled from 2.4% to -5.8%. Although some positive movements have been recorded since 2009, a recession is still going on. Based on information from the National Financial Agency (FINA) database we found that during the period 2007-2011, agricultural firms experienced the same trends as the whole economy, except in terms of average monthly salaries and employment. However, due to the impact of / on? agricultural products prices and yields, in two year period from 2008 to 2010, agricultural firms recorded an almost linear fall in revenues, while the national business sector on the whole experienced a sharp fall in revenues in 2009 and then only a modest fall in 2010.


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