scholarly journals EFFECT OF MACROECONOMIC FACTORS ON TRADING VOLUMES OF MANUFACTURING AND ALLIED COMPANIES LISTED IN NAIROBI SECURITIES EXCHANGE

2021 ◽  
Vol 6 (1) ◽  
pp. 32-52
Author(s):  
Gabriel Chege ◽  
Stanley Kirika
Keyword(s):  
Negative Correlation ◽  
Trading Volume ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Unique Contribution ◽  
Stock Trading ◽  
Macroeconomic Factors ◽  
Lending Rate ◽  
Trading Volumes ◽  
The Government

Purpose: The purpose of the study was to establish the effect of macroeconomic factors on stocks trading volumes of manufacturing and allied companies listed in Nairobi Securities Exchange.    Materials and Methods: The research adopted a quantitative descriptive design that focuses on nine manufacturing and allied companies listed in NSE and make up in the list of 25-share index companies. The nine manufacturing and allied companies were selected through purposive sampling techniques, where samples were selected based specific factors. The data used in the research was collected from Central Bank of Kenya, Nairobi Security Exchange and Kenya Bureau of Statistics. This research employed a panel data analysis using STATA software. Treasury bill rate was dropped from the model due to multicollinearity. Results: The analysis found that there was a negative relationship between inflation on trading volume, exchange rate had a negative correlation with stock trading, lending rate had a negative correlation with stock trading volume of manufacturing and allied companies listed in the Nairobi Stock Exchange.  Unique contribution to theory, practice and policy: The study recommends the government should initiate policies that will lower the lending rate in Kenya as lower lending rate may translate to higher stock trading volumes. Further studies should research on other factors affecting stock trade volume which may include the value of the stocks and the information size in the market.

scholarly journals EFFECT OF MACROECONOMIC FACTORS ON TRADING VOLUMES OF MANUFACTURING AND ALLIED COMPANIES LISTED IN NAIROBI SECURITIES EXCHANGE

2020 ◽  
Vol 5 (2) ◽  
pp. 27
Author(s):  
Gabriel Njogu Chege ◽  
Stanley Kirika
Keyword(s):  
Negative Correlation ◽  
Trading Volume ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Unique Contribution ◽  
Stock Trading ◽  
Treasury Bill ◽  
Lending Rate ◽  
Trading Volumes

Purpose: The purpose of this study was to establish the effect of inflation, lending rate, exchange rates and Treasury bill interest rate on trading volumes of manufacturing and allied companies listed in the Nairobi Stock Exchange. Materials and Methods: The research adopted a quantitative descriptive design that focuses on nine manufacturing and allied companies listed in NSE and make up in the list of 25-share index companies. The nine manufacturing and allied companies were selected through purposive sampling techniques, where samples were selected based specific factors. The data used in the research was collected from Central Bank of Kenya, Nairobi Security Exchange and Kenya Bureau of Statistics. This research employed a panel data analysis using STATA software.  Treasury bill rate was dropped from the model due to multicollinearity. Results: The analysis found that there was a negative relationship between inflation on trading volume, exchange rate had a negative correlation with stock trading, lending rate had a negative correlation with stock trading volume of manufacturing and allied companies listed in the Nairobi Stock Exchange.  Unique contribution to theory, practice and policy: The study recommends the government should initiate policies that will lower the lending rate in Kenya as lower lending rate may translate to higher stock trading volumes. Further studies should research on other factors affecting stock trade volume which may include the value of the stocks and the information size in the market.

Implications of Government Borrowing for Corporate Financing in Emerging Economies: A Crowding Out Kuznets Curve

2020 ◽  
Vol 23 (02) ◽  
pp. 2050017 ◽  
Author(s):  
Muhammad Ali Nasir ◽  
Toan Luu Duc Huynh ◽  
Quynh Thi Nhu Do ◽  
Cuc Thi Nguyen ◽  
Quynh Thi Tran
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Kuznets Curve ◽  
Crowding Out ◽  
Macroeconomic Factors ◽  
Corporate Financing ◽  
Financing Decisions ◽  
The Government

This paper investigates the implications of government borrowing for corporate financing and capital structure of the firms. In doing so, we explore the effects of government debt, macroeconomic and firm-specific factors on firm’s choice of financing and capital structure. We draw on the 10-year data (2007–2017) of 225 non-financial firms listed on the Ho Chi Minh Stock Exchange (HoSE) and employ the system Generalized Method of Moments (system-GMM) for estimation. Our key findings suggest that the government borrowing and debt financing for the Vietnamese listed companies have a negative relationship. Specifically, the short-term corporate leverage structure is influenced more strongly than the long-term leverage structure. We also define the threshold for the association between government borrowing and corporate financing decisions by capturing a U-shaped relationship i.e., Crowding out Kuznets Curve (CKC). Furthermore, macroeconomic factors also show a statistically significant impact on corporate financing decisions. Our findings have profound implications for the fiscal and public policymakers, investors as well as corporate finance managers and firms.

scholarly journals Comparison of Sharia Stock Prices and Trading Volumes Before and During COVID-19

2021 ◽  
Vol 1 (1) ◽  
pp. 13-24
Author(s):  
Yana Ameliana Yunus
Keyword(s):  
Stock Prices ◽  
Trading Volume ◽  
Financial Risk ◽  
Optimal Portfolio ◽  
Stock Trading ◽  
Significant Difference ◽  
Before And After ◽  
Insignificant Difference ◽  
Trading Volumes ◽  
Rights Issue

Before making an investment, entrepreneurs or investors must consider the benefits and financial risks obtained. So, investors need to take action in investing, meaning that investors need to form a portfolio by selecting several assets so that financial risk can be minimized without reducing the expected. The COVID-19 pandemic has significantly impacted the economy, especially investors, informing an optimal portfolio. This study aims to determine the optimal portfolio formation during the COVID-19 pandemic. In this study measurement, we used variables in the form of stock prices and stock trading volumes before and during COVID-19 pandemic. This study shows a comparison, but not so significant, between stock prices before and during the pandemic. Based on the survey conducted, the following results were found, i.e., first, shows an insignificant difference between prices before and after the rights issue announcement. The stock trading volume indicates a significant difference between the stock trading volume before and after the rights issue; trading volume increases after the information of the rights issue. By implementing companies affected by COVID-19 pandemic, we can watch the prices that occur around the announcement date. Investors can make a reason about their investments in shares of issuers affected by COVID-19 pandemic.

scholarly journals FACTORS DETERMINING STOCK MARKET RETURNS: CASE OF NAIROBI STOCK EXCHANGE

2016 ◽  
Vol 1 (1) ◽  
pp. 108
Author(s):  
Samson Okoth Ondiek ◽  
Dr. Ongoro
Keyword(s):  
Stock Market ◽  
Stock Returns ◽  
Significant Relationship ◽  
Unique Contribution ◽  
Market Returns ◽  
Macroeconomic Factors ◽  
Stock Market Returns ◽  
Book Value ◽  
Company Stock ◽  
The Government

AbstractPurpose: The study attempts to establish if the changing macroeconomic factors and the industry variables can predict the variation on the Nairobi Security Exchange stocks return Methodology: It adopted a regression model that related stock returns to various selected macro and micro economic factors and used data of 20 companies that constitute the NSE index. The study used monthly data spanning the year 2006 to 2010.Results: The regression results indicate that, four of the variables i.e. market return (NSEI), exchange rate for US/KSH, market to book value ratio have a positive and significant relationship with an individual company stock market returns. Risk Free rate (91 Treasury bill rate) also had a positive and significant relationship while industrial growth opportunity and inflation were found to be negative and significant. leverage on the other hand was found to be insignificant and therefore does not influence individual company stock market returns. Unique contribution to theory, practice and policy: These findings will have significant effects on investors’ investment decisions making as well as the Government and the capital markets authority (CMA) in the formulation of polices and guidelines. Once factor betas are estimated, we can describe the expected change in security returns with respect to changes in a given factor and thus giving the investors, CMA and the Government a better understanding on the effect of a change in the fiscal and monetary policies in the stock market. This is crucial to the Government as it seeks to promote the capital market as a source of alternative funding for economic growth. Investors wishing to construct portfolios should also consider the trends of the inflation rates, exchange rates, market to book value ratio, industrial production and the stock market.  The rise of either of this micro and macroeconomic indicators may influence the returns positively or negatively and hence the investor may choose the best time to either buy or sell their securities

scholarly journals The Crowd-Out Effect of Government Debt on Firm Leverage

2021 ◽  
Vol 235 ◽  
pp. 01023
Author(s):  
Xiaomiao Xia ◽  
Jingyue Liao ◽  
Zitang Shen
Keyword(s):  
Financial Crisis ◽  
Negative Correlation ◽  
Instrumental Variable ◽  
Negative Relationship ◽  
Government Debt ◽  
Corporate Financing ◽  
Financing Decisions ◽  
Division Point ◽  
The Government ◽  
The Impact

Based on the data of 21 provinces from 2000 to 2018, this paper empirically examines the impact of government debt on corporate financing decisions, and finds that there is a negative correlation between government debt and corporate leverage. In large enterprises, private enterprises and enterprises in economically developed areas, the negative relationship is stronger. In order to deal with the potential endogenous problems, we use the government debt excluding the province GDP as the instrumental variable, and take the financial crisis and the 4 trillion policy as the division point to divide two periods of time as the robustness test. The results show that government debt crowds out corporate debt.

scholarly journals Determinants of liquidity risk in Islamic banks

2017 ◽  
Vol 12 (3) ◽  
pp. 142-148 ◽  
Author(s):  
Tariq Alzoubi
Keyword(s):  
Negative Correlation ◽  
Positive Relationship ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Liquidity Risk ◽  
Islamic Banks ◽  
Cash Balance ◽  
Several Variables ◽  
Stable Source ◽  
The Relationship

This research analyzes the determinants of liquidity risk in Islamic banks by using a comprehensive model that incorporates several variables that impact the liquidity of Islamic banks. A panel data analysis is conducted on a sample of 42 Islamic banks from 15 countries between 2007 and 2014. The results show a negative correlation between liquidity risk and cash ratio, as the cash balance can be used to meet any demands for liquidity from the bank’s customers. There is negative correlation between liquidity risk and securities held by the bank, since banks which need liquidity can sell these assets to meet any liquidity shortages they face. Bank size also has a negative relationship with liquidity risk, as larger banks tend to have more stability and customers feel safer dealing with large banks. Bank’s equity also has a negative correlation with liquidity risk, as equity is a more stable source of funding for banks, a higher ratio of equity lowers liquidity risk. On the other hand, there is a positive relationship with high profit assets, as banks shift their portfolio towards more profitable assets in order to increase their earnings, they face greater liquidity risk, a positive relationship also exists with bad finance provision. Additionally, the findings demonstrate that the relationship between bank size and liquidity risk is not linear.

scholarly journals Investigating the Link Between Macroeconomic Factors and Income Inequality of Asian Countries

2021 ◽  
Vol 3 (3) ◽  
Author(s):  
Ameenullah Aman ◽  
Usman Ahmad ◽  
Sumera Muhammad Saleem
Keyword(s):  
Economic Growth ◽  
Data Analysis ◽  
Income Inequality ◽  
Positive Relationship ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Asian Countries ◽  
Macroeconomic Factors ◽  
Sample Data ◽  
The Impact

The main purpose of the study was to analyze the impact of macroeconomic factors on income inequality. The panel data analysis is conducted on the sample data of 36 Asian countries. The data of 19 years from the period 2001 to 2019 is collected to analyze the impact of interest rate, economic growth, FDI and exports. The findings revealed the positive relationship between income inequality and economic growth whereas FDI and exports have negative relationship with income inequality. Result of the study implies that authorities should pay special attention to design policies that encourage inward FDI and increase exports.

Pricing efficiency of Saudi exchange traded funds (ETFs)

2020 ◽  
Vol 11 (3) ◽  
pp. 793-809
Author(s):  
Fahad Almudhaf ◽  
Bader Alhashel
Keyword(s):  
Trading Volume ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Research Approach ◽  
Exchange Traded Funds ◽  
Market Prices ◽  
Content Type ◽  
Market Participants ◽  
Pricing Efficiency ◽  
Trading Volumes

Purpose This paper aims to investigate the pricing efficiency of Saudi Sharia-compliant (i.e. Islamic) exchange-traded funds (ETFs). Design/methodology/approach The paper adheres to a positivist research philosophy with a deductive research approach where data is collected, analyzed and interpreted to examine a hypothesis. Ordinary least squares (OLS) regressions are applied to investigate pricing efficiency and persistence. Findings The results show that Saudi ETFs do not currently offer proper diversification for investors, possibly due to their low trading volumes and the delays of market prices in reflecting net asset value (NAV). On average, ETFs trade at a premium to their NAVs. Moreover, the authors find that the deviations of ETF prices from their NAVs (i.e. premiums or discounts) do not disappear in one day. The results reveal a significant positive relationship between the trading volume of Saudi ETFs and volatility, a significant positive correlation between ETF returns and contemporaneous deviations and a significant negative relationship between returns and lagged deviations. These findings can be interpreted as evidence against the market efficiency of Saudi ETFs. Practical implications Individual and institutional investors can use Saudi ETFs, especially as their efficiency improves with increased trading volume (liquidity). Saudi regulators must increase their efforts to educate market participants and expand the availability of information to enhance transparency and awareness of the benefits of investing in ETFs, which will positively affect liquidity and pricing efficiency in the future. Originality/value This paper is the first to perform empirical tests on Saudi ETFs. Saudi Arabia deserves further attention because it is the most significant stock market in the Gulf Cooperation Council and only recently allowed foreigners to participate.

scholarly journals Analysis of the Effect of Sharia Stock Trading Activity Factors and Macroeconomic Factors on the Performance of Sharia Stocks in the Capital Market in Indonesia

2019 ◽  
pp. 12-28
Author(s):  
Teddy Sumirat Bassar
Keyword(s):  
Stock Market ◽  
Capital Market ◽  
Trading Volume ◽  
Research Method ◽  
Inflation Rate ◽  
Trading Activity ◽  
Stock Trading ◽  
Macroeconomic Factors ◽  
Trading Frequency ◽  
Trading Activities

This research aimed to analyze the influence of sharia stock trading activity and macroeconomic factors on the performance of Sharia stocks in the capital market in Indonesia. The theoretical foundation used in this research was the Capital Asset Pricing Model (CAPM), which was a model that connects the expected rate of return with the risk of balanced market conditions. In addition, the theory of Arbitrage Pricing Theory (APT) which has the view that the expected return for a security will be influenced by several risk factors. Shariastock performance measurement was carried out using the Sharpe Index evaluation measuring instrument. The Sharpe index measures portfolio performance by connecting between returns and total risks as indicators. In this research, the research model used as a dependent variable was the performance of Sharia stocks. While the independent variable was sharia stock trading activities factors which consist of sharia stock market capitalization, sharia stock trading volume, Sharia stock trading frequency, and sharia stock trading day; and macroeconomic factors, including the SBI interest rate (Bank Indonesia Valuable Certificates), inflation rate, and exchange rate. The research method that was used in this research was the quantitative research method with multiple regression models. The data used were panel data, i.e. ISSI sharia share data (Indonesian Sharia Stock Index) which represented the trading of sharia shares listed on the stock, active, and fulfilling the requirements in the period of January 2014 to December 2018. Based on the results of this research, it showed that the Sharia stock market capitalization, sharia stock trading volume, sharia stock trading frequency, and sharia stock trading day had no positive effect on the performance of sharia shares. While the interest rates of SBI and exchange rates negatively affected the performance of Sharia stocks. For the inflation rate did not negatively affect the performance of Sharia stocks. Taken together, the factors of sharia stock trading activities and macroeconomic influenced the performance of sharia shares

scholarly journals What drives DS30 Index amid bourse lockdown decision? An emerging economy perspective

2021 ◽  
Vol 9 (10) ◽  
pp. 2507-2520
Author(s):  
Mohammad Omar Faruq
Keyword(s):  
Stock Market ◽  
Positive Impact ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Macroeconomic Factors ◽  
Negative Relation ◽  
Book To Market Ratio ◽  
The Government ◽  
Key Aspects ◽  
The Impact

This study measures the impact of the COVID-19 pandemic outbreak on the stock market of Bangladesh amid bourse lockdowns. The top 30 blue-chip companies listed in the DS30 Index of the Dhaka Stock Exchange are used as the sample for this study. Panel data regression analysis has been used after performing several diagnostics tests to assess the impact for January to December during the year 2020. The regression model used in the study considers three key aspects, namely COVID-19, firm-specific factors, and macroeconomic variables amid the bourse lockdown. This study finds that daily trend in affected cases, death cases and investors' attention significantly affect the stock market but does not show any negative relation to conclude. The Government imposed lockdown shows a negative relation with the stock market significantly. Firm-specific variables like daily market capitalization and book to market ratio show a significant negative relationship with the stock market. On the other hand, macroeconomic factors have a significantly positive impact on the stock market amid bourse lockdowns. This study assesses the performance of the Bangladesh stock market by use of DS30 Index listed firms during the COVID-19 pandemic in response to the Government imposed bourse lockdown. This study provides unique insights into how the Bangladesh stock market reacted during the pandemic, along with a rare bourse lockdown decision.  

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