Investment Analysis and PortfolioManagement25/01/2018Sir Sufyan Majid SubmittedbyHamzaYaqoob (2255 )B.Com(hons) 2014-18 Literature reviewsJournalof Corporate Finance Institutionalinvestor monitoring motivation and the marginal value of cash Thebasic purpose of their study was to degree the outcome of enthused monitoringinstitutional investors on the marginal value of cash holdings. By the end ofyear 2015 the collective cash holdings stated by non-financial and non-utilityfirms had touched $2.
3 trillion, it was of the non-utility and non financialfirms which were listed on American stock exchange ,New York stock exchange andNASDAQ it represented 22.4% of total firm assets and its was equal to 12.5% ofannual US GDP.
Firms might grasp more cash or other liquid assets for thedefensive purpose for when they face higher cash flow doubt, market rivalry, orcredit restraints. They used Baseline regression model. Their sample waslimited to the firms with stock return data from CRSP and annual accountinginformation from Compustat. To analyze additional stock returns, they attainthe benchmark break points and benchmark portfolio returns from KennethFrench’s data library. To concept corporate governance indexes, they used datafrom Institutional Shareholder Services. To get the classification ofinstitutional investors, they excerpt data from Brian Bushee’s personalwebsite.
Their sample time is from 1995 to 2015 . Their conclusion was that firmsmay hold cash because they are indefinite about their instant futureenvironment, or because they want to recollect the flexibility to exploitinvestment chances that may rise suddenly. The retaining of cash may therefore belikely to be valued positively if investors were confident in the firms’managers. However, cash reserves offer managers the possibility to exploittheir agency position and may, therefore, be value dipping when seen bysceptical investors. The article istaken from Elsevier.comJournalof Financial EconomicsNon-ratingrevenue and conflicts of interestCredit rating agencies delivers very vitalinformation in credit markets, and the quality of the ratings they offer issignificant to the working of the financial system, for example, by underlyinga diversity of monetary contracts and rules. Examples about the use of creditratings contain loan contracts, financial regulation and investment mandates.
Their samples are between 2010-2015. They capture data on credit ratings andfirms’ industry arrangements from the Centre for Monitoring Indian Economy Prowess database. This foundation ofhigh-quality corporate data has been used in many current studies. Creditratings for these firms CRISIL, ICRA, CARE, Brickwork, and INDRA and are re-ported for each firm at the debt security level. While specific debtinstruments does not carry individual identifiers in the database, they areclassified into instrument categories such as debentures, long-term loans, andterm loans. They emphasis on non-structured instruments that are allottedmedium- or long-term credit ratings by the agencies.
More, they recollect onlythe ten most common instrument categories. The resulting sample consists of tendebt instrument categories Debentures / bonds / notes/ bills; debt; fixed rateunsecured non-convertible debentures; 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 sampleis a firm-agency-year.
Panel A displays a frequency distribution ofobservations with non- rating services. Their sample extents from years2010–2015 and covers 26,760 firm-agency-years. There are 7083 firms in theirsample, of which 473 get non-rating services at some point in the sampleperiod, corresponding to 1165 observations in their sample. The rest of thepanel reports a breakdown by rating agency; for example, 7.
9% of the sampleobservations with a CRISIL rating are associated with payments for non-ratingservices given by CRISIL. Panel B displays the occurrence of firms withmultiple raters in their sample. 19% of the sample corresponds to firms thatobtain ratings from more than one rating agency in a given yearThe article istaken from Elsevier.
com Journalof Corporate FinanceExecutiveturnover and the valuation of stock optionsPrimaryexercise is an very vital reason for the evaluation of executive stock options(ESOs) and also for the estimation of American options. Enforced exercises andregular voluntary exercises inspire a evaluation concession of ESOs to marketdealt options. He examines executive revenue and voluntary exercises via hazardanalysis.
He use two main archives for his examination. For the study ofvoluntary initial exercise he track executives’ option portfolios usingtransaction data based on the SEC’s (Securities and Exchange Commission)corporate insider filings. For the turnover examination he used annual data onemployment periods and reimbursement from ExecuComp. He used the database fromthe year 1996 on as in this year the SEC modified its Securities and ExchangeAct of 1934 and extended insider reporting commitments. In conclusion Thispaper contributes to the literature of ESO evaluation by openly modeling twosources of primary exercise. ESOs have a valuation discount compared to markettraded options, for the reason that ESOs are more to be expected to exercisedearly and may even forfeiture before maturity.
Thus hopes about the exercisebehavior of the executive are a central component for ESO valuation. Theliterature on ESO valuation so far has focused on voluntary exercise as driverfor a value discount of ESOs over market traded optionsThe article istaken from Elsevier.com Researchin International Business and FinancePricedynamics and speculative trading in BitcoinSomefinancial revolutions in money markets have gotten more attention by regulatorsand policy makers than the commencement of the digital coinage Bitcoin. Bitcoinvalue has raised from a few cents to as high as $1,132.26 during last year dueto which is has become popular for both consumers and retailers. We collectdata consists of price and volume from Bitcoin charts which gives us themonetary and mechanical data about Bitcoin network.
The start of our sampleperiod is from 17 july 2010 and the end of our sample time period is 1 june2014. They will also collect historic exchange-rate data for 51 othercurrencies during the same time period from Bloomberg. The motive behind doingit to give a simple benchmark when investigating Bitcoin volatility. Someresults are noticeable. First, speculative trading and Bitcoin returns aredistinct. However, volatility and Bitcoin returns are positively correlated.Fascinatingly, They do not find that volatility is positively linked to speculativetrading. If anything, the reverse is true.
These results are robust to bothPearson and Spearman coefficients and specify that speculative trading inBitcoin does not contribute to Bitcoin returns or its instability, per seThe article istaken from Elsevier.com International 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 to interactand make agreement with each other Ø MoneymarketØ CapitalmarketØ DerivativemarketInstitutes Ø CentralbanksØ BanksØ StockexchangeØ SwiftØ EcoØ Bic