Determinants of Islamic Banks Distress in Gulf Council Countries (GCC)

The study aims to investigate the relation between Z score and internal factors represented in Camel rating system ratios. To discover the best ratios that can be used as indicator. Also it aims to investigate the impact of external economic factors GDP, Inflation rate and currency exchange rate on the Islamic banks soundness.it follows quantitative method, simple random sample of five full-fledge Islamic banks in Gulf Council Countries is selected, parametric statistical analysis is used, especially linear multiple regression tool. The results of linear regression model showing that, there are some ratios affect positively and significantly on Z score,those are, Total equities to T. Asset; Total loan to Total Assets; market share price and Earning per share.; moreover the GDP and inflation rate do not effect on the Islamic banks soundness. Implication of the results in Islamic banks they should increase their Z score through increasing some ratios such as liabilities to Assets ratio, loan to Assets ratio, share market price, most important implication of the study result is a recommendation for amendment of Camel rating model. Further works are recommended with more statistical techniques. The relation between camel dimensions ratios and bankometer model should be conducted.

The Impact of Exchange Rates on Stock Markets in Turkey: Evidence from Linear and Non-Linear ARDL Models

In this chapter we investigate the asymmetric impact of exchange rates on three major stock market indices in Turkey using four different ARDL models between 2003M1 and 2018M12. This chapter also attempts to differentiate the short-run and the long-run relationship between exchange rates and stock market indices namely BIST All shares, BIST National 100 index, and BIST National 30 index. Our motivating question is whether the relationship between exchange rates and three major stock market indices are symmetric or asymmetric in Turkey? To answer this, we first use the linear bivariate and multivariate models assuming the effects are symmetric. We then use the non-linear bivariate and multivariate models to examine whether exchange rate have symmetric or asymmetric effects on selected stock stock market indices in Turkey. The findings show that exchange rates have asymmetric effects on all three major stock market indices both in the short and long run. When we look at the long-run, the currency appreciation has positive and significant impact on selected stock markets but currency depreciation does not have an effect. This finding is in line with the understanding that Turkish sectors heavily depends on the import of raw and intermediate goods. The results also show that the economic activity has positive and significant effects on all stock markets implying that it is the main determinant in the long-run. Moreover, interest rates and volatility index were negative and significant in all markets. Thus, it has important implications for policy makers to provide stable prices and diverse investors.

Will Malawi’s Inflation Continue Declining?

The main objective of this chapter is to examine and determine the main factors that have driven inflation rate in Malawi since 2001, with a special focus on the period 2013–2019, during which inflation rate has continuously declined reaching 9% in 2019, from 36% in 2013. The chapter also tries to assess whether this decline will continue as per the performance of the underlying economic fundamentals both in the short- and the long-run. The study employs the autoregressive distributed lag (ARDL) model framework to examine the drivers of inflation both in the short- and the long-run using quarterly data, over the period of 2001–2019. The results reveal that reduction in headline inflation has mainly been driven by money supply growth, fiscal deficits, and output growth in the short-run, while only output has driven inflation decline in the long-run. The results also show that after floating exchange rate in 2012, inflation decline has mainly been driven by output growth despite inflationary pressures from the exchange rate and import prices. Model forecasts show that inflation may increase up to 19.4% by December 2020, if money supply growth, fiscal deficits, and exchange rate movements are not taken care of.

Volatility Effects of the Global Oil Price on Stock Price in Nigeria: Evidence from Linear and Non-Linear GARCH

This present study examines the volatility effects of the oil price on the stock price returns in Nigeria from the period of 2000M(12) to 2020M(4) on a monthly data using both standard GARCH and non-linear GARCH models. The motivation for the present study is the recent fall in the global oil price of Brent Crude to US$15.25 per barrel due to the outbreak of the Corona Virus (COVID-19). Consequentially, the Nigerian stock market (NSE) responded with a fall of 4172 point or by a fall of 15.53%. After establishing the presence of heteroscedasticity through the ARCH test and volatility clustering through the returns, the outcome of the study contributes to knowledge by providing financial information and signals to investors about the best GARCH model response to proactively and successfully use to model global oil price shocks so as to reduce financial risk in Nigeria’s stock market.