scholarly journals Why do Korean Holding Companies Trade at a Steeper Discount to Net Asset Value?

2017 ◽  
Vol 4 (1) ◽  
pp. 77 ◽  
Author(s):  
Won Seuk Jang
Keyword(s):  
Capital Markets ◽  
Market Price ◽  
Investment Opportunity ◽  
Holding Companies ◽  
Developed Markets ◽  
Holding Company ◽  
Asset Value ◽  
Net Asset Value ◽  
Investment Opportunities ◽  
Current Market Price

This case deals primarily with the valuation of holding companies in Korea and the significant gap between its market price and net asset value (NAV), which is the sum of the estimated values of the assets in the portfolio of the holding company minus debt. Typically in the developed markets, holding company discount (as measured by price to NAV minus one) ranges between 15 to 30 percent according the various empirical studies.In Korea, however, holding company discount could stretch up to 30 to 60 percent, and often times, 30 to 40 percent has been used as a rule of thumb among the investment community. A steep discount of current market price to NAV might be interpreted as a convincing rationale for investment opportunity, but this could be a dangerous simplification of idea unless underlying reasons are properly understood.Therefore, the purpose of this case is to understand the valuation of holding companies, especially in the context of capital markets in Korea as compared to other developed markets, and develop a proper sense of investment opportunities therein.

scholarly journals The Influence of Price/Earning Ratio (PER), Price to Book Ratio (PBR) and Price to Sales Ratio (PSR) on Net Asset Value (NAV) in Sharia Equity Fund

2018 ◽  
Vol 6 (1) ◽  
pp. 91-102
Author(s):  
Gerry Immanuel Tanius ◽  
Rosita Widjojo
Keyword(s):  
Significant Influence ◽  
Capital Markets ◽  
Mutual Fund ◽  
Secondary Data ◽  
Equity Fund ◽  
Asset Value ◽  
Net Asset Value ◽  
Equity Funds ◽  
Small Investors ◽  
Short Time

From many kinds of investment in Indonesian capital markets, a mutual fund is one of the instrument to be discussed. Within a short time, the mutual fund gives a significant influence to the Indonesian capital markets. A mutual fund is one of the alternatives for the investors, especially for small investors or for the investor that does not want to meet high risk. In the growing of Indonesian capital markets, the net asset value (NAV) of the mutual fund should be increasing, and the increase of the NAV proves it. The sharia equity fund is no different. As an alternative investment, the sharia mutual fund in Indonesia is growing; however, it does not seem attractive to the investor, reflected by the small weighting from the mutual fund industry. The reason why investors are reluctant to invest in sharia equity fund is the volatility, compared to the conventional equity fund. To guide investors and to attract investment in sharia equity funds, some indicators can be used, such as PER, PBR and PSR. This study will use these indicators as the independent variables: PER (X1), PBR (X2) and PSR (X3) on the Net Asset Value (NAV) as the dependent variable (Y)  in sharia equity fund using the Jakarta Islamic Index (JII) data. In this research, the researcher uses a quantitative method using secondary data. The results show that there is a significant influence of PER, PBV and PSR on NAV in sharia equity funds. As a consequence, PER, PBR and PSR can guide investors’ decisions to invest in sharia mutual fund.   Keywords: PER, PBR, PSR, NAV, sharia mutual fund

scholarly journals FAKTOR MINAT DAN PERAN PERKEMBANGAN SUKUK TERHADAP PEMBANGUNAN

2020 ◽  
Vol 6 (1) ◽  
pp. 77-96
Author(s):  
Chandra Satria ◽  
Suandi Suandi
Keyword(s):  
Mutual Funds ◽  
Capital Markets ◽  
Capital Market ◽  
Mutual Fund ◽  
Positive Influence ◽  
Data Sources ◽  
Public Companies ◽  
The Public ◽  
Asset Value ◽  
Net Asset Value

In the period between 2010 and the end of 2018, sharia products, especially sukuk in the Indonesian capital market, have shown quite good development. Total funds under management of sharia mutual funds, or better known as the Net Asset Value (NAV), are recorded at Rp 34.5 trillion. This figure is up by 21.8% compared to 2017. The NAV reflects 6.82% of the total conventional and sharia mutual fund NAV. While the number of Islamic mutual funds that have been circulating in the public, there were 224 mutual funds. This figure increased by 23.1% compared to 2017. The number also reflects 10.7% of the total conventional and sharia mutual funds that have been circulating in public (OJK data sources for 2017 and 2018). In that period, the issuance of sukuk was conducted 104 times by 22 issuers and / or public companies with a total sukuk issuance value of Rp 22 trillion or equivalent to 10.5% of the total bond issuance value. The still low total sukuk issuance value compared to the total bond issuance value shows that there are other factors that influence Issuers / PP's interest in issuing sukuk in addition to regulatory factors related to Islamic capital markets which have had a positive influence on the development of Islamic capital markets, especially sukuk

scholarly journals Latin American iShares: Prices And Premiums

2014 ◽  
Vol 3 (2) ◽  
pp. 24 ◽  
Author(s):  
Javier Rodríguez
Keyword(s):  
Regression Analysis ◽  
Emerging Markets ◽  
Latin American ◽  
Price Efficiency ◽  
Academic Literature ◽  
Developed Markets ◽  
Asset Value ◽  
Net Asset Value ◽  
Fundamental Value ◽  
Country Specific

ETFs have fast become one of the most popular investment instruments not only in developed markets but also in emerging markets. This study examines the prices and premiums of a sample of country-specific Latin American ETFs, a highly popular group of ETFs with investors, but relatively unexplored in academic literature. Regression analysis is used to measure price efficiency and the persistence of deviations from net asset value. I find that although price efficiency is high, other factors, beside fundamental value explain the variation in prices. Most of the ETFs in the sample are more likely to trade at a premium and deviations from net asset value persist at least for a day.

scholarly journals Faktor-Faktor Yang Mempengaruhi Nilai Aktiva Bersih Reksadana Manulife Syariah Sektor Amanah

2017 ◽  
Vol 4 (2) ◽  
pp. 117
Author(s):  
Yesika Novita Lintang Gumilang ◽  
Leo Herlambang
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Mutual Funds ◽  
Capital Markets ◽  
Strong Influence ◽  
Quantitative Approach ◽  
Study Results ◽  
Asset Value ◽  
Net Asset Value ◽  
Small Investors

Mutual funds can be bridging For Small investors but Want to invest hearts Capital Markets Namely mutual funds, but so far there is hardly any who see mutual funds as part of an attractive investment exceeds savings, deposits, or even stocks.There is factors that affect Net Asset Value namely interest rates and market unsystematic risk. Based on this study proved this study uses a quantitative approach to the study results The results of this study is the Effect of interest rate and market unsystematic risk to Net Asset Value simultaneously significantly.The influence of interest rates on the second partial Net Asset Value significantly, interest rates affect the Net Asset Value of 99.4%, which means have a strong influence on the NAB. The effect of market unsystematic risk on a third partially NAB insignificant. market unsystematic risk affect the NAB amounted to only 66.2%.

Pricing Efficiency of Nifty BeES in Bullish and Bearish Markets

2012 ◽  
Vol 13 (1) ◽  
pp. 109-121 ◽  
Author(s):  
R. Shanmugham ◽  
Zabiulla
Keyword(s):  
Tracking Error ◽  
Market Price ◽  
Market Conditions ◽  
Pricing Efficiency ◽  
Significant Difference ◽  
Asset Value ◽  
Replication Strategy ◽  
Net Asset Value ◽  
Portfolio Manager ◽  
Price Divergence

This article examines the pricing efficiency of Nifty BeES in bullish and bearish market conditions using high frequency data for a period of seven years. It seeks to address three questions. First, does the portfolio manager of Nifty BeES follow its benchmark replication strategy across different market conditions? Second, whether the portfolio manager minimizes the portfolio return volatility relative to the benchmark volatility. Third, whether the magnitude of premiums/discounts varies in bullish and bearish market conditions. Our findings suggest a significant difference in alpha-generation abilities of fund manager between the two market conditions. Tracking error was found to be relatively high in bearish conditions. The average premium is higher in bearish markets characterized with highest volatility. On the other hand, the average discount is higher in bullish markets characterized with least volatility. The price divergence disappears within three days and the market price and the fund’s net asset value (NAV) get aligned due to arbitrage mechanism.

scholarly journals Foreign Financial Institution Equities: Returns From Emerging Markets And Developed Markets Differ

2011 ◽  
Vol 4 (4) ◽  
Author(s):  
R. Stephen Elliott ◽  
Mark Schaub
Keyword(s):  
Emerging Markets ◽  
Capital Markets ◽  
Financial Institution ◽  
Technical Analysis ◽  
International Markets ◽  
Foreign Companies ◽  
Developed Markets ◽  
Investment Opportunities ◽  
Innovative Techniques ◽  
Profit Potential

With the vicissitude of the capital markets, investors continually seek new and innovative techniques that will identify securities that outperform the market. In addition to the usual fundamental and technical analysis, the international markets may provide enhanced profit potential. Investors may purchase securities of foreign companies to gain greater diversity and new investment opportunities.

Reconsidering Returns

2021 ◽  
Author(s):  
Samuel M Hartzmark ◽  
David H Solomon
Keyword(s):  
Mutual Funds ◽  
Price Index ◽  
Market Performance ◽  
Performance Expectations ◽  
Asset Value ◽  
Net Asset Value ◽  
Perception Of Performance ◽  
Predictable Returns

Abstract Investors’ perception of performance is biased because the relevant measure, returns, is rarely displayed. Major indices ignore dividends, thereby underreporting market performance. Newspapers are more pessimistic on ex-dividend days, consistent with mistaking the index for returns. Market betas should track returns, but track prices more than dividends, creating predictable returns. Mutual funds receive inflows for “beating the S&P 500” price index based on net asset value (also not a return). Investors extrapolate market indices, not returns, when forming annual performance expectations. Displaying returns by default would ameliorate these issues, which arise despite high attention and agreement on the appropriate measure.

Capital Market Imperfections and the Sensitivity of Investment to Stock Prices

2009 ◽  
Vol 44 (3) ◽  
pp. 551-578 ◽  
Author(s):  
Alexei V. Ovtchinnikov ◽  
John J. McConnell
Keyword(s):  
Capital Markets ◽  
Stock Prices ◽  
Financial Distress ◽  
Stock Price ◽  
Debt Overhang ◽  
Capital Market Imperfections ◽  
Investment Opportunities ◽  
Imperfect Capital Markets ◽  
Empirical Tests ◽  
External Equity

AbstractPrior studies argue that investment by undervalued firms that require external equity is particularly sensitive to stock prices in irrational capital markets. We present a model in which investment can appear to be more sensitive to stock prices when capital markets are rational, but subject to imperfections such as debt overhang, information asymmetries, and financial distress costs. Our empirical tests support the rational (but imperfect) capital markets view. Specifically, investment–stock price sensitivity is related to firm leverage, financial slack, and probability of financial distress, but is not related to proxies for firm undervaluation. Because, in our model, stock prices reflect the net present values (NPVs) of investment opportunities, our results are consistent with rational capital markets improving the allocation of capital by channeling more funds to firms with positive NPV projects.

Sign in / Sign up

Export Citation Format

Share Document