The Impact of Conversion from Traditional to Electronic Dealing on Trade Volume and Market Value of Stocks:An Applied Study on Amman Bourse

Matar Khaleel Mousa Saeed ,Mousa Abdelhadi Salah Noafal

doi:10.7176/rjfa/10-18-08

Abstract

This study aims to test the effect of conversion from traditional trading to electronic trading on trade volume, stock market value and liquidity in Amman Bourse , and investigating the impact of the electronic trading on either transaction costs and operational efficiency, it is also aims to investigate the ability of investors to earn abnormal return by converting from manual to electronic trading This study will use secondary data by gathering stock market prices before and after dealing with electronic trading.The behavior of stock market value and trade volume are studied on the basis of daily movements. On this paper an attempt was made to analyze the stock market value and trading volume of all shareholding companies listed in Amman bourse using monthly data because it is more stable and less volatile.The hypothesizes of this study were examined by using parametric tests like paired sample t.test. it was found that there was an increase in either trading volume of stocks, stock market value ,liquidity, operational efficiency, and decreasing in transaction costs .This study can be a source of help to institutional investors and market makers to improve either way of building their portfolios and to diversify it and improve their investment decisions. Keywords: trade volume, electronic trading, manual trading, abnormal return, operational efficiency. DOI : 10.7176/RJFA/10-18-08 Publication date :September 30 th 2019

Highlights

Financial markets is considered as a key instrument for information used to make financial decisions by financial institution, creditors and investors because it has multi information content for these groups
Electronic trading in Amman Bourse was started in year 2000,before that year,manual trading was implemented .minimizing transaction costs and increasing operational efficiency were the goals of Amman Bourse to convert from manual to electronic trading
1.3 Objective of the study The main objectives of the study 1- to examine the impact of conversion to electronic trading- in Amman Bourse- on trading volumes. 2- to examine the impact of conversion to electronic trading on market stock prices. -to examine the impact of conversion to electronic trading on liquidity. 3 4--to examine the impact of conversion to electronic trading on transaction costs and operational efficiency

Summary

Introduction

Financial markets is considered as a key instrument for information used to make financial decisions by financial institution , creditors and investors because it has multi information content for these groups. 1.3 Objective of the study The main objectives of the study 1- to examine the impact of conversion to electronic trading- in Amman Bourse- on trading volumes. 2- to examine the impact of conversion to electronic trading on market stock prices.

Results

Conclusion