Sector Rotation with Leading Macroeconomic Indicators

In this study, an attempt has been made to examine whether the theory of sector rotation has been empirically valid in the Indian equity market, during the period April, 2000 to March, 2020. The time period has been divided into many sub-periods according to the real GDP growth rate and the annualized returns of eleven stock market indices have been analyzed in different periods. Going forward, leading macroeconomic indicators, which coincide with overall economy, have been taken and their association with stock market indices have been analyzed through statistical measures to assess any possible forecasting. In the first part of the study, cyclical and non-cyclical sectors have been found to beat the benchmark index during periods of growth and stagnancy, respectively, but no particular ordinality was observed. Amongst the leading economic variables, M3 Money Supply was found to have high degree of association with some indices, namely Sensex, Healthcare, CDGS, Consumer Durables and IT, but no linear relation was observed.

LABOR MARKET IN THE POST-INDUSTRIAL ECONOMY: GLOBAL CHALLENGES AND PROSPECTS

The article studies theoretical approaches to the category of "postindustrial" economy ". The historical context of the development and transformation of the economic spheres of society has been determined. The author analyzes the macroeconomic indicators of the Republic of Belarus. The indicators of the labor market of the Republic of Belarus in the conditions of the post-industrial economy are analyzed. The article describes the main tendencies of the post-industrial economy at the present stage of the development of society. The characteristic of the labor market of the Republic of Belarus in the conditions of the development of the post-industrial economy is given. The challenges and prospects of the labor market in the post-industrial economy have been identified.

The Determinant of Indonesian Stock Returns’ Volatility: Evidence from Islamic and Conventional Stock Market

Islamic stock market is apparently different from the conventional stock market due to the prohibition of unlawful goods and excessive risk-taking behavior. This study explores the extent to which the Indonesian Islamic and conventional stock returns' volatility responds to the macroeconomic indicators. This study employs Jakarta Islamic Index (JII) and Indonesian Stock Exchange (IDX) and uses monthly time-series data covering 2001: M1 - 2019: M12. The volatility of stock returns is measured using Generalized Autoregressive Conditional Heteroskedasticity (GARCH). By employing the Autoregressive Distributed Lag Model (ARDL), the results validate the evidence of the long-run relationship between the stock market's volatility and macroeconomic variables. A rising in money supply and an economic upturn reduce the volatility of conventional stock returns but only an expansionary money supply diminishes the volatility of Islamic stock returns. Conversely, high inflation and sharp depreciation of the Rupiah boost the stock returns' volatility. The results further show an interesting finding that the Islamic stock market's volatility is more responsive to changes in macroeconomic indicators than the volatility of their counterpart conventional stock market. Policymakers should take strict rules during the worst economic conditions to minimize the negative impact of the instability of macroeconomic variables.

The Effect of Unemployment, Real Interest Rate, Debt Service, and Government Expenditure on the Z”-score of Lebanese Alpha Banks

Lebanon is currently witnessing the most severe banking sector crisis in its history. Thus, nowadays, the demand for financial analyses in banks has increased to examine the financial distress and the potential impact of the macroeconomic factors. Consequently, this research studies bank distress in Lebanese Alpha banks and addresses the question of how the Lebanese major macroeconomic factors affect it. The researchers calculated the mean Altman Z”-scores for 10 Lebanese Alpha banks for the period 2009 – 2018 as an indicator for financial distress. Furthermore, they collected data regarding the chosen macroeconomic indicators for the same period from the World Bank Data. Consequently, the researchers developed a Regression Model and analyzed the model and a multicollinearity test. The calculated Altman Z"-scores showed that Lebanese Alpha banks were very likely to be financially distressed. Moreover, the results showed that there is a positive relationship between debt service, government expenditures, unemployment, and the real interest rate on one side and alpha banks’ high probability to become distressed on the other side. First, gathering data regarding the macroeconomic indicators was a hurdle as there were differences among the sources (Lebanese Ministry of Finance, BDL, Bloomberg, IMF, and World Bank). This is why the authors depended on the values published by the World Bank Data as a reliable source. Second, there is a lack of studies analyzing the relationship between the banking sector’s current crisis and the individual macroeconomic variables. However, this limitation also gives value to the results of this study. This research sheds light on the significance of the Altman Z"-score as an indicator for financial distress in Lebanese Alpha banks. Thus, a model can be developed based on the basic Altman model that fits for Lebanese banks. Moreover, banking authorities (BdL, ABL, and BCC) should impose yearly calculations of this score to detect probable future distress. The value of this study stems from it being one of the first studies in the Lebanese market examining the impact of macroeconomic factors on the Z”-scores of the Lebanese Alpha banks using the Multiple Regression Model.

The Integral Index of Business Activity: Methods of Constructing

The article deals with the formation and use of the business activity index for the analysis, forecasting and regulation of the development of the Russian economy. The possibilities of forming the Business Activity Index of the Institute of Economics of the Russian Academy of Sciences by basic spheres of the economy (Index of the Institute of Economics RAS) are analyzed and its advantages are substantiated in comparison with the Index of Output of Goods and Services by the basic types of economic activities of Rosstat (Rosstat Index). The analysis of the dynamics of the IE RAS Index and the Rosstat Index after the socio-economic crisis of 2014–2015 until the second half of 2021, including the period of the coronavirus pandemic, has been carried out. A list of macroeconomic indicators characterizing the level of business activity in the spheres of the national economy included in the IE RAS Index is presented. Analysis and comparison of the dynamics of the IE RAS and Rosstat indices showed that the main advantages of the IE RAS Index lie in a more accurate determination of the timing of the onset and overcoming of crisis processes, as well as the depth of their impact on socio-economic development. Particular attention is paid to the analysis and comparison of the dynamics of business activity in the post-crisis and pandemic periods. It was found that the maximum drop in business activity, caused largely by restrictive measures in connection with the coronavirus pandemic, was observed in 2020. It is noted that the maximum growth in business activity for the period under review fell on the first half of 2021. This growth is confirmed by the dynamics of business activity indices according to the methodology of the Institute of Economics of the Russian Academy of Sciences and Rosstat. The paper concludes that the IE RAS Index provides a more accurate integral assessment of the macroeconomic dynamics of business activity; it is proposed to widely use it in state accounting and management, forecasting and strategic planning.

BORROWING ALTERNATIVES FOR HOUSEHOLDS IN LITHUANIA: CURRENT SITUATION, TRENDS AND CHALLENGES

Purpose – to analyse the main borrowing alternatives available to Lithuanian households and the credit market as a whole, focusing on its peer-to-peer (P2P) segment, the forecast of its growth, and possible challenges. Research methodology – the research methods applied were scientific literature analysis, statistical data analysis, comparative analysis, correlation-regression analysis, linear trend forecasting method. Findings – the prevailing borrowing alternative for Lithuanian households still remain bank credits. Besides, borrowing from P2P market is becoming more and more popular. Although the macroeconomic environment for all the credit market segments is the same, the P2P segment is developing significantly faster. If this trend remains unchanged, the whole credit market is likely to face challenges, such as the growth of overdue loans, insolvent customers, the rising share of non-performing-loans (NPL), etc., that may affect its overall stability. Research limitations – the empirical study relies on the country’s macroeconomic indicators that influence household borrowing. Such factors as borrower’s age, income level, marital status and others were not taken into account in this study. The forecast of the P2P segment growth of the consumer credit market and comparison with its banking segment is based on the analysis of 4 years of real monthly statistics for both segments. Practical implications – the performed analysis and its results can be useful for the future research within the household borrowing trends, especially in Peer-to-Peer platforms, and specifically for the Central Bank, the Ministry of Finance and other institutions that regulate the credit market, as it provides information on modern borrowing trends and the challenges it might bring. Also, for P2P platforms themselves, planning and further developing their activities and adjusting lending conditions with the aim to attract higher-quality customers. Originality/Value – household borrowing, the credit market and the P2P platforms are widely analysed by both academics and financial institutions, such as central banks. However, it is mainly limited to the analysis of statistical data and does not pay attention to possible market development issues. This study focuses on the analysis of the growth trends of the P2P market and the potential challenges that may arise thereafter.

Competitive models of safe development of Ukraine in conditions of institutional instability and global environmental challenges

The article considers the prerequisites and mechanisms for the formation of competitive security strategies for socio-economic development of the state in the entropy of the global environment. Conceptual bases of security for implementing the macromodel of the state social and economic development are analyzed, that, in particular, provides: dismantling the system of clan capitalism, de-shadowing of economy and counteraction to corruption, safety of consumption and balanced limited social and economic development and application of bionic management paradigm of economic security based on a unified fiscal accounting payment system. This model should provide the basic preconditions for happiness and self-reproduction of citizens: social justice in the distribution of public goods and overcoming poverty, combating corruption, comfortable economic climate, strengthening economic security and confidence in the future by stabilizing macroeconomic indicators over time. This will allow forecasting the needs of consumer, financial, investment, innovation markets in the strategic perspective and other indicators, which will be a prerequisite for sustainable safe development and full consideration of the interests of future generations.

The Use of Econometric Analysis in Forecasting Macroeconomic Processes

The article discusses the issues related to the influence of various price categories of goods on the level of inflation. The possibility of using econometric analysis for predictive purposes is considered. An econometric model of multiple regression of the influence of consumer prices on the level of inflation is formed. A linear multiple regression equation is constructed. The selection of factors for the construction of an econometric model is made. The main groups of goods are identified, the prices of which form the level of inflation and can have a primary impact. The viability of the model and the possibility of forecasting macroeconomic indicators based on econometric analysis are proved.