Investment Analysis and Portfolio Management25/01/2018Sir Sufyan Majid SubmittedbyHamzaYaqoob (2255 )B.Com(hons) 2014-18 Literature reviewsJournalof Corporate Finance Institutionalinvestor monitoring motivation and the marginal value of cash CharlesWard, Chao Yin, Yeqin Zeng states that.
The basic purpose of their study was todegree the outcome of enthused monitoring institutional investors on themarginal value of cash holdings. By the end of year 2015 the collective cashholdings stated by non-financial and non-utility firms had touched $2.3trillion, it was of the non-utility and non financial firms which were listedon American stock exchange ,New York stock exchange and NASDAQ it represented22.4% of total firm assets and its was equal to 12.5% of annual US GDP. Firmsmight grasp more cash or other liquid assets for the defensive purpose for whenthey face higher cash flow doubt, market rivalry, or credit restraints. Theyused Baseline regression model. Their sample was limited to the firms withstock return data from CRSP and annual accounting information from Compustat.
To analyze additional stock returns, they attain the benchmark break points andbenchmark portfolio returns from Kenneth French’s data library. To conceptcorporate governance indexes, they used data from Institutional ShareholderServices. To get the classification of institutional investors, they excerptdata from Brian Bushee’s personal website. Their sample time is from 1995 to2015 . Their conclusion was that firms may hold cash because they are indefiniteabout their instant future environment, or because they want to recollect the flexibilityto exploit investment chances that may rise suddenly. The retaining of cash maytherefore be likely to be valued positively if investors were confident in thefirms’ managers. However, cash reserves offer managers the possibility toexploit their agency position and may, therefore, be value dipping when seen bysceptical investors. The article istaken from Elsevier.
comJournalof Financial EconomicsNon-ratingrevenue and conflicts of interestRamin P. Baghai,Bo Becker states that. Creditrating agencies delivers very vital information in credit markets, and thequality of the ratings they offer is significant to the working of thefinancial system, for example, by underlying a diversity of monetary contractsand rules. Examples about the use of credit ratings contain loan contracts,financial regulation and investment mandates. Their samples are between2010-2015. They capture data on credit ratings and firms’ industry arrangementsfrom the Centre for Monitoring Indian Economy Prowess database. This foundation of high-quality corporate data hasbeen used in many current studies.
Credit ratings for these firms CRISIL, ICRA,CARE, Brickwork, and INDRA and are re- ported for each firm at the debtsecurity level. While specific debt instruments does not carry individualidentifiers in the database, they are classified into instrument categoriessuch as debentures, long-term loans, and term loans. They emphasis onnon-structured instruments that are allotted medium- or long-term credit ratingsby the agencies. More, they recollect only the ten most common instrumentcategories. The resulting sample consists of ten debt instrument categoriesDebentures / bonds / notes/ bills; debt; fixed rate unsecured non-convertibledebentures; fund based financial facility/instrument; long term loans;non-fund-based financial facility/instrument; term loans; cash; cash credit;and working capital loans. Every observation in their sample is afirm-agency-year. Panel A displays a frequency distribution of observationswith non- rating services.
Their sample extents from years 2010–2015 and covers26,760 firm-agency-years. There are 7083 firms in their sample, of which 473get non-rating services at some point in the sample period, corresponding to1165 observations in their sample. The rest of the panel reports a breakdown byrating agency; for example, 7.9% of the sample observations with a CRISILrating are associated with payments for non-rating services given by CRISIL.Panel B displays the occurrence of firms with multiple raters in their sample.19% of the sample corresponds to firms that obtain ratings from more than onerating agency in a given yearThe article istaken from Elsevier.
com Journalof Corporate FinanceExecutiveturnover and the valuation of stock optionsDanielKlein states that. Primary exercise is an very vital reason for the evaluationof executive stock options (ESOs) and also for the estimation of Americanoptions. Enforced exercises and regular voluntary exercises inspire a evaluationconcession of ESOs to market dealt options. He examines executive revenue andvoluntary exercises via hazard analysis. He use two main archives for hisexamination. For the study of voluntary initial exercise he track executives’option portfolios using transaction data based on the SEC’s (Securities andExchange Commission) corporate insider filings.
For the turnover examination heused annual data on employment periods and reimbursement from ExecuComp. Heused the database from the year 1996 on as in this year the SEC modified itsSecurities and Exchange Act of 1934 and extended insider reporting commitments.In conclusion This paper contributes to the literature of ESO evaluation byopenly modeling two sources of primary exercise. ESOs have a valuation discountcompared to market traded options, for the reason that ESOs are more to beexpected to exercised early and may even forfeiture before maturity. Thus hopesabout the exercise behavior of the executive are a central component for ESOvaluation. The literature on ESO valuation so far has focused on voluntaryexercise as driver for a value discount of ESOs over market traded optionsThe article istaken from Elsevier.com Researchin International Business and FinancePricedynamics and speculative trading in BitcoinBenjaminM.
Blau states that. Some financial revolutions in money markets have gottenmore attention by regulators and policy makers than the commencement of thedigital coinage Bitcoin. Bitcoin value has raised from a few cents to as highas $1,132.26 during last year due to which is has become popular for bothconsumers and retailers.
He collect data consists of price and volume fromBitcoin charts which gives us the monetary and mechanical data about Bitcoinnetwork. The start of our sample period is from 17 july 2010 and the end of oursample time period is 1 june 2014. He will also collect historic exchange-ratedata for 51 other currencies during the same time period from Bloomberg. Themotive behind doing it to give a simple benchmark when investigating Bitcoinvolatility. Some results are noticeable. First, speculative trading and Bitcoinreturns are distinct. However, volatility and Bitcoin returns are positivelycorrelated.
Fascinatingly, He do not find that volatility is positively linkedto speculative trading. If anything, the reverse is true. These results arerobust to both Pearson and Spearman coefficients and specify that speculativetrading in Bitcoin does not contribute to Bitcoin returns or its instability,per seThe article istaken from Elsevier.
comInternational financialmarkets and institutionInternational financial markets and institutions play a veryimportant role in the development of country. In every country there are arepeople who have more money then they required. So they wanted to use it andthere are also people who wanted to use money to do some economic activity butthey do not have required money to do this activity. To solve this issue ofaffordability financial markets and institutions play the role of intermediary.There are different types of financial markets which helps both parties tointeract and make agreement with each other Ø MoneymarketØ CapitalmarketØ DerivativemarketInstitutes Ø CentralbanksØ BanksØ StockexchangeØ SwiftØ EcoØ Bic FinancialInclusion and Economic Growth in OIC CountriesThepurpose of this study is to know the relationship between financial inclusionand economic growth in OIC countries. From two to three decades, financialinclusion got the great attention from researchers, politicians and otherfinancial stakeholders.
Leyshon & Thrift (1993-1995), Collard(2010) states that financial inclusion has received a great attention andpolicy making issue of socially excluded people is emerging now. Kempson &Whyley (1999) examines the type of people, who are with low income, excludedfrom formal financial system in Britain. Naceur & Samir (2007) investigatethe relationship between financial development and economic growth for MENO(Middle East and North Africa) region. And find that financial development havenegative effect on economic growth. They interpreted that financial developmentis a hurdle in economic growth, in MENO region. Pearce (2011) try to explorethebarries, opportunities and priorities for the improvement of financialservice accessability in MENA and suggest that government and regulatory bodiesshould develop a framework for improvement.