Tropical forest dynamics correspond to fair games in economic theory of financial markets

Ecological and economic systems both comprise of autonomous adaptive agents. It is thus possible that similar mechanisms determine the organization of both these complex systems. Indeed several economic theories have already been successfully applied in an ecological context. Here we show that 'efficient market theory' in economics, where future earnings are distributed between competitors by a 'fair game', corresponds to fitness-equalizing mechanisms of coexistence in ecology. In contrast to stabilizing mechanisms, which promote coexistence by giving each species an equilibrium abundance that is resilient to perturbations, equalizing mechanisms promote coexistence without such resilience by minimizing the net fitness differences between species. However, identifying stabilizing and equalizing mechanisms from the short time-series data that are typically available in ecology is challenging. We used techniques from economics that are applied to collections of short time-series from a system. We found that observed species abundance dynamics in a neotropical forest are generally in agreement with efficient market theory implying a dominant role of equalizing mechanisms, which finding quantifies and supports what was generally believed about that specific forest system. Our study highlights that complex systems from ecology and economics share common features suggesting the possibility of further synergy between ecology and economics in future.

Finance for Climate Action: Postcovid-19 Recovery Challenges

This paper is oriented to explore the new developments in climate action financing within the framework of Just Transition. This discourse is linked to the post COVID-19 recovery and the sustainable finance agenda. The study is done through extensive literature review, combining aspects PRISMA guidelines and the Recursive Content Abstraction (RCA) analytical approach. After presenting the Just Transition framework, we analyze the provisions on financing of the Paris Agreement. Next, the financing gaps are identified with the COVID -19 impact. We pay a special attention on the debt service, the related developing countries difficulties, and the challenges for sub-national governments. Then we analyze the efficient market theory and its distortion in the time of COVID-19 crisis. Based on the topics discussed, at the end the paper presents some final remarks.

Food and beverage stocks responding to COVID-19

This paper investigated how food and beverage (F&B) stocks react to COVID-19. The event study method was applied to four events including the first and second events, were the first COVID-19 positive patients detected in the largest and second-largest economic center of Vietnam. The third and fourth events are related to strong measures to prevent the spread of COVID-19: the nationwide lockdown at the beginning of the second quarter of 2020, and the lockdown of Danang at the beginning of the third quarter of 2020. The results show that the reaction of F&B stock prices to events supports the semi-strong form of efficient market theory. The strong and lasting negative reaction of F&B stocks to the first event can be explained by surprise (first case in Vietnam) and Hochiminh city’s economic engine driving role in the development of Vietnam’s economy. The study finds that heuristic decision-making from nationwide lockdowns (suppression of supply chains during lockdowns) can explain the sub-sector of farming-fishing-ranching products reacted more strongly to the lockdown event in Danang. Based on the research results, this paper provides some policy implications for managers and notes for securities investors.

Does The Efficient Market Theory In The Weak Form Exist? Evidence From Indonesia

In the weak-form market efficiency theory, investors cannot predict the movement of all prices because of randomness. This circumstance happens because of a quick market reaction to new information. Conversely, suppose the market is not efficient in this shape; in that case, the investors can obtain an abnormal return. One of the reasons is the thin market, where many inactive stocks to be traded are available. Based on these issues, this research intends to examine this theory by employing runs testing on the daily returns of the Indonesia Composite Index (ICI) between January 2014 and December 2018 for each year and a whole. Once performing this test, this research demonstrates that the daily returns of the ICI are random for both situations. By denoting these facts, this research concludes that the capital market in Indonesia is efficient in a weak form and experiences a decrease in the thin level, reflected by the escalation in trading frequency, volume, and value, as well as the number of dynamic shares transacted. This research suggests that investors without sufficient information should utilize the service of the securities analysts to select the stocks they buy and sell to get the capital gain. Keywords – an efficient market in the weak form; market index return; runs test; thin market

An Empirical Research of Impact of the Merger of Pan-European and Oslo Stock Exchanges on the Efficiency of Tobacco Securities Market

Objectives: Europe is one of the important markets for traditional tobacco. We analyzed the impact of exchange consolidation on securities market efficiency, so as to enable tobacco enterprises to improve the financing efficiency of the stock market and carry out transformation and upgrading. Methods: In this work. We’re based on efficient market theory, the merger of Pan-European Stock Exchange and Oslo Stock Exchange, Norway in June 2019 is analyzed through empirical analysis. The logarithmic returns of 25 listed companies in the Oslo Stock Exchange OBX-25 index were analyzed using OLSN Chow and KPSS tests. Results: It is found that of 72% of securities, the explanatory power of market returns for securities returns is increased, which shows significant improvement in market efficiency. The merger of stock exchanges can indeed improve the market efficiency. In addition, through the KPSS test, it is found that the merger of stock exchanges can improve the market efficiency. As time goes by, however, the validity decreases. Conclusion: The improvement of the efficiency of the securities market will be conducive to the financing efficiency of listed tobacco companies in the secondary market, promote the transformation of enterprises, and contribute to the tobacco control and the health of the population in Europe.

EMT and Political Reform Effects on Chinese Markets: A Literature Review

The objective of this paper is to analyse the literature on and the evolution of the analysis of Chinese financial markets over time. Seven papers, based mainly on Efficient Market Theory (Fama, 1998) and the correlation between different markets, published in the years 1999-2019, have been selected and compared as they analyse data taken from the Shenzhen and Shanghai markets.

Investor behavior under the Covid-19 pandemic: the case of Indonesia

This study begins with the assumption that the existence of abnormal circumstances will force investors to take measures to protect their investments in the capital market. Recently, the stock index in the Indonesian market has been declining and continued to fall until the end of April 2020 due to the impact of the Covid-19 pandemic. In terms of efficient market theory, prospect theory and signaling theory, this study aims to analyze the relationship between risk and return in the Indonesian capital market during the Covid-19 pandemic as a manifestation of investor behavior. To test hypotheses, the correlation test, the independent sample t-test and the Cohen test for 629 public firms with 52,836 observable data are used. The findings show that for financial sectors and non-financial sectors, the fourth period differs from previous periods when the relationship between systematic risk and stock returns is positive, although only non-financial sectors have a significant effect. The results show that efficient market theory, prospect theory and signaling theory are consistent with the phenomena around the Covid-19 pandemic in Indonesia. In addition, Cohen’s test results suggest that government policies in the face of the pandemic are successful in stimulating the market.

Test of Weak Efficiency on Casablanca Stock Market, Chaotic Dynamic and Long Memory

This paper aim to investigate the weak form efficiency of the Casablanca Moroccan stock market. After a brief explanation of the efficient market theory developped by Eygene Fama, we have made the whole classical econometric tests used to test the weak form efficiency, this is made by using MASI index that represents the whole stocks in Casablanca stock market. At the end of this study, we have rejected the hypothesis of efficience of Casablanca Stock market, and we have deduced that MASI is caracterised aby a choatic dynamic that we have cvalidated by calculation of Lyapunov exponent, finally and in order to judge the model that represent the MASI we have modeled MASI index using the process ARFIMA (p,dq) and we have deduced that MASI is caracterized by a long memory.

Non-performing Loan and its Effects on Banking Stability: Evidence from National and International Licensed Banks in Nigeria

This study examines Non-Performing Loan (NPL) and its effects on the stability of Nigerian banks with national and international operational licenses from 2014:Q2 to 2017:Q2. A "restricted" dynamic GMM is employed to estimate the macroeconomic and bank specific drivers of NPL for each licensed category. Z-Score is constructed to proxy banking stability, and its response to shocks NPLs is examined in a panel vector autoregressive framework. The results reveal that drivers of NPLs vary across the two categories of banks, but, weighted average lending rate is a vital macroeconomic driver of NPLs for both. The results also confirm the moral hazard hypothesis and risk-return tradeoff of efficient market theory. Furthermore, international banks withstand NPLs shocks in the long run, despite temporary flux in the short horizon, while the stability of national banks is susceptible to NPLs shocks in the long run. The study recommends that weighted average lending rate, anchored on monetary policy rate should be the focus of banks' regulators when addressing issues of NPLs. Again, strategies for mitigating short run impacts of NPLs on the stability of international licensed banks should be incorporated in the offsite regulatory framework to ensure banking stability.

Analisis Pengaruh Faktor-Faktor Fundamental Terhadap Harga Saham (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar di Bursa Efek Indonesia Periode 2012 – 2015)

In efficient market theory it is mentioned that a price change of a stock's securities in the past can not be used to estimate price changes and the theory of signals is also mentioned that investors see signs made by managers of firms to predict future outlook. Therefore, the research was made to obtain empirical evidence by analyzing whether the fundamental factor has significant effect on stock price in manufacturing companies either partially or simultaneously on manufacturing companies listed on BEI in 2012-2015. The fundamental factors here are divided into profitability, solvency and liquidity are represented by ROA, ROE, NPM, DER, CashTA, TATO, and EPS ratios. Research using Data Panel Regression assisted with Eviews program. The results of research partially only NPM, CashTA and EPS variables that have a significant effect while for the variable ROA, ROE, DER and TATO no significant effect. Simultaneously all the variables together have a significant influence on stock prices.