scholarly journals Relationship Between Selected Macroeconomic Variables and the Financial Performance of Investment Banks in Kenya

2021 ◽  
Vol 13 (11) ◽  
pp. 98
Author(s):  
Mungiria James Baariu ◽  
Njuguna Peter
Keyword(s):  
Financial Performance ◽  
Interest Rates ◽  
Significant Influence ◽  
Investment Banks ◽  
Arbitrage Pricing Theory ◽  
Macroeconomic Variables ◽  
Pricing Theory ◽  
Equity Investments ◽  
Classical Economic ◽  
The Relationship

Currently, investment banks in Kenya are facing a lot of challenges due to persistence losses. However, the available studies are inadequate to aid investment banks in overcoming these challenges in Kenya due to mixed findings, resulting in rising uncertainty on equity investments’ performance, leading to massive losses among investment banks.  This study, therefore, sought to model the relationship between inflation, GDP, interest rates, exchange rates, and financial performance of investment banks. Arbitrage pricing theory, Modern portfolio theory as well as classical economic theory (flow-oriented model) was used. A causal research design was adopted. The study found that inflation has negative significant influence on financial performance of equity investments among investment banks in Kenya. Also, GDP has positive and significant influence on financial performance of equity investments among investment banks in Kenya. Interest rate was also found to have negative and significant influence on financial performance of equity investments among investment banks in Kenya. In addition, exchange rate has negative significant influence on financial performance of equity investments among investment banks in Kenya. The study therefore recommends any investor including financial investors to methodically analyze inflation trends and understand how it affects the company’s financial performance. Investors must also be in a position to predict the future concerning inflation changes.

scholarly journals Relationship Between Selected Macroeconomic Variables and the Financial Performance of Investment Banks in Kenya

2021 ◽  
Vol 13 (11) ◽  
pp. 102
Author(s):  
Mungiria James Baariu ◽  
Njuguna Peter
Keyword(s):  
Financial Performance ◽  
Interest Rates ◽  
Significant Influence ◽  
Investment Banks ◽  
Arbitrage Pricing Theory ◽  
Macroeconomic Variables ◽  
Pricing Theory ◽  
Equity Investments ◽  
Classical Economic ◽  
The Relationship

Currently, investment banks in Kenya are facing a lot of challenges due to persistence losses. However, the available studies are inadequate to aid investment banks in overcoming these challenges in Kenya due to mixed findings, resulting in rising uncertainty on equity investments’ performance, leading to massive losses among investment banks.  This study, therefore, sought to model the relationship between inflation, GDP, interest rates, exchange rates, and financial performance of investment banks. Arbitrage pricing theory, Modern portfolio theory as well as classical economic theory (flow-oriented model) was used. A causal research design was adopted. The study found that inflation has negative significant influence on financial performance of equity investments among investment banks in Kenya. Also, GDP has positive and significant influence on financial performance of equity investments among investment banks in Kenya. Interest rate was also found to have negative and significant influence on financial performance of equity investments among investment banks in Kenya. In addition, exchange rate has negative significant influence on financial performance of equity investments among investment banks in Kenya. The study therefore recommends any investor including financial investors to methodically analyze inflation trends and understand how it affects the company’s financial performance. Investors must also be in a position to predict the future concerning inflation changes.

scholarly journals Valuation of Government Bonds: the Exchange Rate Is an Important Aspect

2017 ◽  
Vol 65 (6) ◽  
pp. 1911-1916
Author(s):  
Blanka Francová
Keyword(s):  
Regression Model ◽  
Interest Rates ◽  
Arbitrage Pricing Theory ◽  
Arbitrage Pricing ◽  
Data Set ◽  
Government Bonds ◽  
Exchange Risk ◽  
Pricing Theory ◽  
Multi Linear Regression ◽  
The Relationship

Interest rates are currently very low in the countries. In these countries bonds are issued with low or negative yields. In this paper, I empirically investigate the factors that affect the price of bonds. I follow international arbitrage pricing theory to determine the relationship between factors and the price of bonds. The international arbitrage pricing theory applies a multi‑linear regression model. The regression model is used for emerging markets and developing markets separately. I have a unique data set of 46 countries. The main data are the monthly returns on government bonds in the period 2010–2015. Exchange risk influences the bond prices. Currency movements can bring further yield for investors.

scholarly journals The Relationship Between Macroeconomic Factors and Mortgage Market Growth in Kenya

2018 ◽  
Vol 14 (10) ◽  
pp. 68
Author(s):  
Natalie Diana Owuor ◽  
Wainaina Githii ◽  
Mirie Mwangi
Keyword(s):  
Interest Rates ◽  
Secondary Data ◽  
Mortgage Market ◽  
Arbitrage Pricing Theory ◽  
Property Market ◽  
Macroeconomic Factors ◽  
Market Growth ◽  
Descriptive Research ◽  
Pricing Theory ◽  
The Relationship

The mortgage market is the market for financing real estate assets. Mortgage financing is vital in financing the property market. This study seeks to determine the relationship between selected macro factors and mortgage market growth in Kenya. The study is based on the arbitrage pricing theory, capital assets pricing theory, title theory and lien theory of mortgages. The study utilizes descriptive research design and quarterly secondary data for a period of 10 years from 2007 to 2016. Analysis of data is carried out through descriptive and inferential statistical techniques. Inferential statistics such as linear correlations and multiple linear regressions are used to draw conclusions and make predictions on the relationship between the independent variables and the dependent variable. The research establishes that there is a positive and significant relationship between interest rates, inflation and the mortgage market growth. The research also finds that there is insignificant relationship between exchange rates, gross domestic product and the mortgage market growth. The research concludes that the mortgage market growth in Kenya is influenced by interest rates and inflation. The research recommends that the central bank of Kenya should ensure that interest rates are stable and inflation levels are low to ensure that they do not affect the mortgage market growth.

Do Macroeconomic Variables affect Stock Returns in BRICS Markets? An ARDL Approach

2015 ◽  
Vol 4 (2) ◽  
Author(s):  
Vanita Tripathi ◽  
Arnav Kumar
Keyword(s):  
Stock Returns ◽  
Oil Prices ◽  
Arbitrage Pricing Theory ◽  
Macroeconomic Variables ◽  
Quarterly Data ◽  
Distributed Lag ◽  
Ardl Approach ◽  
Auto Regressive ◽  
Pricing Theory ◽  
The Relationship

The Arbitrage Pricing Theory (APT) propounded by Ross in 1976 argued for a variety of macroeconomic variables (sources of systematic risk) in explaining stock returns. In the same vein, this paper examines the relationship between macroeconomic variables (GDP, inflation, interest rate, exchange rate, money supply, and oil prices) and aggregate stock returns in BRICS markets over the period 1995-2014 using quarterly data. We have applied Auto Regressive Distributed Lag (ARDL) model to document such a relationship for individual countries as well as for panel data.

scholarly journals Asymmetric Macroeconomic Shocks and Asset Price Behaviors in Selected African Countries

2021 ◽  
Vol 11 (2) ◽  
pp. 90
Author(s):  
Saliu Mojeed Olanrewaju ◽  
Ogunleye Edward Oladipo
Keyword(s):  
Real Estate ◽  
Interest Rates ◽  
Asset Prices ◽  
Asset Price ◽  
Panel Cointegration ◽  
African Countries ◽  
Vector Autoregressive ◽  
Macroeconomic Variables ◽  
Real Estate Prices ◽  
The Relationship

This study examines the relationship between Asset prices (Stock and Real estate prices) and Macroeconomic variables in four selected African countries. The study employs the Westerlund Error Correction Based Panel Cointegration test and Eight-variable Structural Vector Autoregressive model to examine the relationship between asset prices and macroeconomic variables. Findings from the study confirm that no long-run relationship exists between both Asset prices and macroeconomic variables. The study equally reveals that portfolio diversification benefits of both stock and real estate markets are more pronounced in the period of a boom than the recession period in Africa. The results also show that GDP growth rate shock exerts a significant impact on both asset prices during expansion and recession periods. The study reveals that foreign interest rates and World oil price shocks are better predictors of both stock and real estate prices during the crisis period than in the expansion period.

scholarly journals The Determinants of CDS Spreads in Multiple Industry Sectors: A Comparison between the US and Europe

Risks ◽  
2018 ◽  
Vol 6 (3) ◽  
pp. 89 ◽  
Author(s):  
Jatin Malhotra ◽  
Angelo Corelli
Keyword(s):  
Interest Rates ◽  
Global Financial Crisis ◽  
Causality Test ◽  
Macroeconomic Variables ◽  
Credit Default ◽  
The Us ◽  
Before And After ◽  
The Global Financial Crisis ◽  
Industry Sectors ◽  
The Relationship

The paper analyzes the relationship between the credit default swaps (CDS) spreads for 5-year CDS in Europe and US, and fundamental macroeconomic variables such as regional stock indices, oil prices, gold prices, and interest rates. The dataset includes consideration of multiple industry sectors in both economies, and it is split in two sections, before and after the global financial crisis. The analysis is carried out using multivariate regression of each index vs. the macroeconomic variables, and a Granger causality test. Both approaches are performed on the change of value of the variables involved. Results show that equity markets lead in price discovery, bidirectional causality between interest rate, and CDS spreads for most sectors involved. There is also bidirectional causality between stock and oil returns to CDS spreads.

scholarly journals ANALISIS PENGARUH FAKTOR VARIABEL MAKROEKONOMI TERHADAP JAKARTA ISLAMIC INDEX (JII) PERIODE 2010 – 2013

2014 ◽  
Vol 3 (2) ◽  
Author(s):  
Herni Ali
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
Regression Models ◽  
Secondary Data ◽  
Macroeconomic Variables ◽  
Multiple Regression Models ◽  
Negative Effect ◽  
The Exchange Rate ◽  
The Relationship ◽  
Positive Effect

The aim of this study is examining the relationship between cointergration and causality levels of Exchange Rate, GDP, BI interest rates and inflation on Islamic Capital Markets. The data used in this study is a quantitative secondary data in the form of time series of the period January 2010 to December 2013. The test were conducted with the approach of multiple regression models with variable index research JII (Y), the exchange rate (X1), GDP (X2) , BI rate (X3) and inflation (X4) as for hypothesis testing performed using SPSS statistical software. From the results obtained by testing the hypothesis that: a positive effect on the exchange rate, positive effect on GDP, interest harga sewa rates BI negative effect and inflation positive effect on JII. Simultanious testing into four macroeconomic variables affect the JII.DOI: 10.15408/sjie.v3i2.2061   

scholarly journals ANALISIS PENGARUH KINERJA KEUANGAN DAN VARIABEL MAKROEKONOMI TERHADAP RETURN SAHAM SUBSEKTOR PERKEBUNAN

2014 ◽  
Vol 3 (2) ◽  
Author(s):  
Faizul Mubarok ◽  
Hermanto Siregar ◽  
Nunung Nuryartono
Keyword(s):  
Stock Return ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Least Square ◽  
Systematic Effect ◽  
Arbitrage Pricing Theory ◽  
Macroeconomic Variables ◽  
Result Show ◽  
Pricing Theory ◽  
Exchange Data

EVA and MVA are used to indicate the creation of value in an investment. Arbitrage Pricing Theory (APT) explained that macroeconomic variables have a systematic effect on return. The aim of this study is to analyze and to measure the effect of financial performance and macroeconomic variables on the stock return of estate plantation sub-sector at Indonesia Stock Exchange. Data are processed by using panel data, analysis which consist of six companies which are listed on the estate plantation sub-sector and using quarterly data from 2007 to 2013. By using the Pooled Least Square (PLS) the result show that the variables of MVA, oil, inflation, interest rate and crisis have significant effects on the stock return of estate plantation sub-sector while the variables of MVA and the world oil price do not have significant effect on the stock return of estate plantation sub-sector.DOI: 10.15408/sjie.v3i2.2058

scholarly journals THE ROLE OF ATTITUDE TO MONEY IN MEDIATING THE RELATIONSHIP BETWEEN KNOWLEDGE MANAGEMENT AND FINANCIAL PERFORMANCE: A STUDY OF MSMES USING ECOMMERCE AND NONECOMMERCE IN THE CITY OF PONTIANAK – INDONESIA

2021 ◽  
Vol 5 (2) ◽  
pp. 72-76
Author(s):  
Aprina Kuswardani ◽  
Girang Permata Gusti
Keyword(s):  
Knowledge Management ◽  
Financial Performance ◽  
Significant Influence ◽  
Optimal Behavior ◽  
Money Attitudes ◽  
Independent Variable ◽  
The Relationship ◽  
The City

The purpose of this research is to look into the function of money attitudes in mediating the link between knowledge management and financial performance. Knowledge Management is the independent variable in this study, whereas financial performance is the dependent variable, and Attitude to Money is the mediating variable. Using SPSS 23 analytic software. Data was collected utilizing the questionnaire approach with Linkert’s scale, a randomly selected sample based on specified criteria, and a total of 219 MSMEs in Pontianak City. The findings of this research are the knowledge management variable of MSME actors in the city of Pontianak has a significant influence on the Attitude to money variable. The more knowledge management increases, the better and optimal behavior to money will also be. However, the role of the attitude toward money variable appears to be ineffective in mediating the association between knowledge management and financial performance.

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