Alternative Investment Opportunities Research Articles

Optimal annuitization under stochastic interest rates

Abstract The decision about when and how much to annuitize is an important element of the retirement planning of most individuals. Optimal annuitization strategies depend on the individual’s exposure to annuity risk, meaning the possibility of meeting unfavorable personal and market conditions at the time of the annuitization decision. This article studies optimal annuitization strategies within a life-cycle consumption and portfolio choice model, focusing on stochastic interest rates as an important source of annuity risk. Closing a gap in the existing literature, our numerical results across different model variants reveal several typical structural effects of interest rate risk on the annuitization decision, which may however vary depending on preference specifications and alternative investment opportunities: When allowing for gradual annuitization, annuity risk is temporally diversified by spreading annuity purchases over the whole pre-retirement period, with annuity market participation starting earlier in the life cycle and becoming more extensive with increasing interest rate risk. Ruling out this temporal diversification possibility, as embedded in many institutional settings, incurs significant welfare losses, which are increasing with higher interest rate risk, together with larger overall demand for annuitization.

Evaluating the Financial Performance of Bharti Airtel: An Analysis of WACC, NPV, IRR, Profitability Index, and Payback Period

This research paper aims to conduct a comprehensive financial performance evaluation of Bharti Airtel Limited by analyzing key financial metrics including Weighted Average Cost of Capital (WACC), Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), and Payback Period. The project's financial infeasibility is highlighted by a negative Net Present Value (NPV) and a poor profitability index, indicating that the anticipated returns are insufficient to justify the initial investment. Further analysis shows the Internal Rate of Return (IRR) falling below the cost of capital, reinforcing the project's unviability. Additionally, both standard and discounted payback periods exceed ten years, demonstrating an extended timeframe for cost recovery. These findings collectively suggest that Bharti Airtel should explore alternative investment opportunities better aligned with its financial objectives.

Security tokens, ecosystems and financial inclusion: Islamic perspectives

PurposeShariah-compliant security tokens can play an important role in developing innovative solutions to resolve voluntary and involuntary financial exclusion in Muslim societies. This paper aims to present features of Shariah-compliant security tokens and supporting ecosystems that can provide additional sources of financing for small and medium enterprises (SMEs) and create alternative investment opportunities for retail investors.Design/methodology/approachThis conceptual paper presents the building blocks of security tokens, their ecosystem and key functions and activities and then examines these features from Islamic perspectives. This is done by reviewing the contemporary literature on cryptoassets and their ecosystems and analysing these in light of Islamic legal and ethical values and principles.FindingsThe paper provides a framework of how Shariah-compliant asset- and equity-based security tokens can be used by SMEs to raise funds quickly and efficiently on crypto exchanges. Given the novelty and complexity of the technology involved and the lack of understanding and skills to develop blockchain-based systems among SMEs, this paper suggests developing security tokens and exchanges in a controlled manner under the supervision of a nation’s stock markets.Originality/valueAlthough several studies examine cryptocurrencies from Islamic perspectives, literature on other cryptoassets and their role in financial inclusion is scant. This paper identifies Shariah-compliant asset- and equity-based security tokens and supporting ecosystems that can contribute to the development of digital capital markets where SMEs can raise funds efficiently and retail investors can invest in alternative asset classes.

Prospects for institutionalization of crowdfunding: a developing country perspective

PurposeThis study explores the adoption of crowdfunding in Pakistan, focusing on the challenges and opportunities within its unique entrepreneurial ecosystem. The research aims to provide insights into the regulatory mechanisms, stakeholder engagement and institutional factors influencing crowdfunding adoption.Design/methodology/approachSeventeen semi-structured interviews were conducted using a purposive sampling technique. Data was collected from diverse stakeholders involved in the crowdfunding process including investors, entrepreneurs, platform owners and regulators.FindingsThe study identifies various challenges, including regulatory gaps, investor concerns, platform-related issues and systemic challenges such as political instability and weak institutions. These challenges hinder the effective implementation of crowdfunding in Pakistan. Moreover, the study highlights opportunities for financial inclusion, bridging the gap between investors and entrepreneurs, and leveraging Pakistan’s entrepreneurial landscape for crowdfunding growth. While several challenges were common to both developed and developing countries, the study also identified distinct challenges such as digital literacy, reliance on the undocumented economy, insufficient regulatory frameworks and investor mindset specific to developing countries.Research limitations/implicationsSince crowdfunding is an emerging phenomenon in Pakistan, this study had limitations as no official crowdfunding platform other than the Pakistan National Investor Portal had started operations. Therefore, this study involved only those stakeholders who were involved in designing regulatory sandbox suggestions. The sample size could be increased to include stakeholders from other developing countries in the future. This article, however, provides significant strategic guidance for policymakers in developing a framework to improve financial inclusion in development.Practical implicationsThe study provides critical areas of concern for regulatory authorities for developing appropriate legislation to help overcome the challenges to the institutionalization of crowdfunding. This study also encourages stakeholders like investors and entrepreneurs to participate in crowdfunding while looking at the perspective of other parties.Social implicationsThis research highlights the need for the Pakistani society to be well-informed about alternative investment opportunities, like crowdfunding. The micro, small and medium enterprises (MSME) sector, along with the government, can also explore the benefits of crowdfunding to address their lack of access to capital and enable the inclusion of an informal economy to reduce poverty in a developing country.Originality/valueCrowdfunding is a new phenomenon in Pakistan, and the scope of its application in the MSME sector has not been thoroughly investigated. This study reveals how micro and small firms can use crowdfunding to boost their economic operations by overcoming challenges and taking advantage of fintech (financial technology) to achieve financial inclusion, leading to economic sustainability.

The Impact of Covid-19 Pandemic on Cryptocurrency Adoption in Investments: a Bibliometric Study

In the post-COVID-19 era, academic papers on changing financial investment habits are proliferating rapidly as the pandemic has disrupted economic and financial markets, altered investment decisions, and brought new risks and challenges. In addition to traditional market instruments such as gold, oil, and other commodities, cryptocurrencies have attracted new attention due to their dynamic and decentralized nature in these extraordinary times, which must be constantly analyzed from different angles. This paper aims to analyze the evolving academic interest in the adoption of cryptocurrencies for investment decisions, focusing on research papers published in the Scopus database between 2020 and 2023 through bibliometric analysis. The Scopus database provides high-quality publications that have been peer-reviewed and rigorously scrutinized, and the chosen time period corresponds exactly to the period that was sufficient to provide a significant amount of research. The choice of bibliometric research methodology supported our research question and significantly improved our understanding of the relationship between the rise in financial market usage related to COVID-19. The specific focus of this research shows a significant correlation between COVID-19 and cryptocurrencies as an investment option, as evidenced by the increasing number of academic papers and collaboration between numerous countries and institutions. The analysis of the bibliometric research results underlines the increasing importance of cryptocurrencies as alternative investment opportunities in the financial markets. A remarkable interest in this area can be observed globally, with leading countries such as China, India, the USA, the UK, and Malaysia driving research efforts. Through the use of bibliometric analysis, this study encourages cross-border collaboration and highlights the academic recognition of cryptocurrencies as viable investment opportunities in the international financial landscape. Investors, researchers, and policymakers are interested in the growing recognition of cryptocurrencies as a viable investment opportunity, which is reflected in increasing research collaborations and investment opportunities. These trends highlight the evolving landscape of financial markets and regulatory considerations.

To the question of the need to improve the financial planning mechanism when making investment decisions

The article focuses on the key problems of improving the financial planning mechanism when making investment decisions by organizations Based on the proposed methodology of financial planning as a systematized set of basic principles and methods of financial planning, applied indicators, impact measures necessary for the implementation of the financial plan, its monitoring, etc., the structure of this mechanism aimed at making investment decisions is substantiated, as well as the functions and tasks of the financial planning process of investment activity are defined. The authors substantiate that financial planning of investment activity is one of the most complex areas of financial planning, which is largely due to the complexity of making investment decisions, during which the state of the macroeconomic environment, objective limitations of investment activity, alternative investment opportunities, the state of the internal environment of the organization, its subjective investment preferences and other external and internal factors should be taken into account. To solve these problems, it is proposed to use such tools of the financial planning mechanism as budgeting of investment activities.

Virtual assets in the context of global economic instability

Virtual assets, such as crypto-currencies, have become the object of significant interest in the conditions of global economic instability, when people are looking for alternative investment opportunities and means of saving funds. One of the reasons for the growing popularity of virtual assets in such conditions is their independence from traditional financial markets and the potential for diversification of the investment portfolio. In times of economic instability, such traditional assets as stocks and bonds can be highly dependent on market fluctuations. Instead, virtual assets can be a way for investors to preserve their funds and even make a profit. At the same time, the market of virtual assets is extremely risky. It is known for its volatility, which can lead to significant losses for investors. Therefore, the investment strategy, which provides for the distribution of assets to reduce risk, is optimal in conditions of economic instability. Virtual assets can play an important role in diversifying an investment portfolio, reducing overall risk, as these assets can respond to market events independently of traditional assets. The aim of this research is to determine the possibilities of using virtual assets in conditions of global economic instability. General scientific and special methods are applied: observation, description, comparison, analysis and synthesis. Data on prices of virtual assets and stock indices in online environments TraadingView and CoinMarketCap were used. The benefits of using virtual assets based on blockchain technology (using bitcoin as an example) in conditions of global economic instability are considered. A comparative analysis of the price of bitcoin with leading stock indices affecting the global economy was carried out. The main advantages and disadvantages of using virtual assets as investment tools and the prospects for their use in this area are determined.

Should income be diversified? A dynamic panel data analysis of Nepalese depository financial institutions

This study analyzes the possible impact of diversity in non-interest income on Nepalese Depository Financial Institutions (DFIs) performance. The study examines variables such as service fees, dividends on equity instruments, and the non-interest revenue ratio to total operational income as endogenous factors. The ROE serves as the key profitability indicator. Additionally, the study explores the impact of control variables on the performance of financial institutions, such as the cost-to-income ratio, the equity-to-total assets ratio, and the ratio of non-performing loans to total loans. Secondary data from fiscal year 2015/16 to 2021/22 are utilized for analysis, employing correlation and regression analyses to assess the relationships between variables. Based on the Hausman Specification test, this study uses a Dynamic Analysis of Panel Data approach, adopting a Random effects regression model. The findings indicate that dividends from equity instruments ( = –0.565*) adversely affect profitability. At the same time, service fees and non-interest revenue as a proportion of overall operating revenue show no significant impact. Control factors like the cost-to-income ratios ( = –0.432**) and the equity-to-total assets ( = –94.101**) adversely affect profitability. The study suggests that income diversification may not be beneficial, urging Nepalese DFIs to prioritize interest income and consider alternative investment opportunities. Reducing the cost-to-income ratios and equity-to-total assets is recommended for enhancing profitability.

How Institutional Investors’ Alternative Funding and Investment Opportunity Impact Education System? The Case of Saudi Arabia

How Institutional Investors’ Alternative Funding and Investment Opportunity Impact Education System? The Case of Saudi Arabia

Constructing an Investment Scam Detection Model Based on Emotional Fluctuations Throughout the Investment Scam Life Cycle

ABSTRACT In recent years, the COVID-19 pandemic has increased investment scams as individuals seek alternative investment opportunities. This study employs emotion analysis to examine the emotional expressions of scammers in investment scams and proposes an investment scam detection model to identify fraudulent behavior. Using data from seven real-world investment scam chat rooms, we perform a two-stage analysis to evaluate the emotional fluctuations of scammers and construct a machine learning-based investment scam detection model. Our findings reveal distinct patterns of emotional fluctuation in investment scam chat rooms according to the established Investment Scam Life Cycle (ISLC), which portrays the progression of fraudulent behavior. We confirm the applicability of machine learning in scam detection, and the emotion analysis presented in this study can assist researchers and fraud examiners in identifying scam scenarios and reducing financial losses.

Analysis of the optimal service lives of trucks under EUAC and benefit-based methods: A case-study of a road tanker fleet

The trucking industry utilizes an extensive fleet of trucks. Of specific relevance is the determination of optimal economic service lives for this stock. Using a case study of a large-scale road tanker fleet belonging to a transportation arm of a major Eurasian oil company, we outline the application of some traditional life-cycle cost-based (EUAC) and benefit-based techniques for estimating the optimal service lives of the truck fleet; then we propose a simple and user-friendly version of modified cost-benefit analysis that integrates both cost-side and benefit-side considerations into the picture and accounts for the alternative investment opportunities available to the fleet owner. All the modelling is presented in a discrete-time format for convenience and ease of use. The key finding from the case study is that the answer to the optimal service lives of trucks hinges on the alternative investment opportunities available to their owner. The anticipated returns from such alternative investment opportunities enter as discount rates into analysis and the techniques we discuss are sensitive to the value of this parameter.

Exploring Farmers’ Decisions on Agricultural Intensification and Cropland Expansion in Ethiopia, Ghana, and Zambia through Serious Gaming

This paper explores how increasing agricultural productivity through agricultural intensification may influence farmland expansion decisions of smallholder farmers in Ethiopia, Ghana, and Zambia. Six pairs of farmers at each site (72 in total) from different wealth groups were involved in serious games sessions that simulated different institutional, economic, and governance contexts, with players choosing their resource allocation accordingly. The approach was used to explore with farmers, in a ‘safe space’, whether an increase in agricultural productivity and profitability via intensification would reduce or end farmland expansion into natural habitats. The results show that, under certain conditions (such as poor forest governance and lack of alternative income-generating and investment opportunities), agricultural intensification can lead to more agricultural expansion at the expense of natural habitats, such as forests and grasslands. This suggests that intensification strategies to promote increased productivity may need companion strategies to protect forest ecosystems from expansion at the agricultural frontier.

Venture capital and private equity investors, governance, and success of IPOs: Evidence from India

AbstractIn this article, we examine the role of domestic and foreign venture capital and private equity (VCPE) firms in India. We find robust evidence that portfolio firms backed by foreign VCPE firms incorporate effective governance structures after the initial public offering (IPO). Specifically, these firms are associated with smaller, more independent, and gender‐diverse boards. Furthermore, our results suggest that foreign VCPE firms continue their association with their portfolio firms in the post‐IPO period by nominating directors to the boards. Our results also suggest that portfolio firms backed by foreign VCPE firms are associated with better long‐term operating performance and profitability. This positive effect is exacerbated by the presence of independent and female directors. Collectively, our results support the view that good governance practices are key to the long‐term success of a business, especially in economies that lack good legal systems, developed financial markets, and alternative investment opportunities and where developing trust between parties in a transaction is crucial.

Investment outlook and asset allocation in US pension funds

The classic balanced portfolio for more than 7 decades has been the blend of equities and bonds in the ratio of 60−40%, respectively. But declining interest rates have forced investors to divert from this investing strategy and look over other alternatives. This has affected bond returns. And once again due to pandemic interest rates were cut down to near zero resulting in very little returns in bonds. To overcome this, alternative investment opportunities should be looked for and several factors which are important in deciding the future investments are to be considered. Some of them are interest rates, valuations, volatility, etc., Based upon the factors and other parameters, the best alternatives will be Equities (cyclical industry, stocks providing dividends, etc.), Corporate bonds (with higher investment grades), and government bonds of emerging markets (like China and Peru). These alternatives will act as better investment alternatives to traditional 60/40 asset allocation in the current scenario.

Finsiranje na bazi raobnih zapisa - lekcije naučene u srbiji

Aim of this paper is to analyse the role of warehouse receipts in the agribusiness sector, as well as prerequisites for successful public warehouses system. Warehouse receipt emerge as a promising financial instrument for farmers and other owners of agricultural products to provide loan against warehouse receipts. Warehouse receipts also offer alternative investment opportunities for banks by creating a new asset class. The paper analyses the experiences of the Serbia, which introduced the system of public warehouses in 2009. Applied research methodology includes literature review, comparation analyses and Indemnity fund' data analyses. According to the results of this paper, Serbian legal framework can be good example for other countries aiming to establish public warehouses system as a system consisting on all necessary prerequisite to establidh successful public warehouse system. After positive experiences in the initial years, the development of the public warehouse system in Serbia came to a standstill in 2015., when two frauds in the public warehouse system occurred, which led to a loss of confidence in public. An important lesson learned in Serbia is that in addition to complete legislation based on the experience of successful public warehouse systems, it is necessary to implement legal provisions in practice. According to the results of the paper, the main cause of the crash of public warehouses in Serbia is despite the legal provision on the establishment of a special inspection for public warehouses, this most important link has never been established in practice. Lessons learned in Serbia can be a useful experience for other countries, j the process of establishing this important system for agribusiness sector. This paper provides first comprehensive analyses of the public warehouse system in the Serbia.

Role of Financial Literacy in Investment Decisions: Exploring the Individual Investors’ Perspective through a Qualitative Approach

Purpose: This study aims to explore phenomenal role of financial literacy on investment decisions. Financial literacy enables the individuals to manage their financial resources through pursuing alternative investment opportunities and portfolio diversification. Individual investors tried to balance their income-expenditures by availing latest investment opportunities in stocks, bonds, shares and financial instruments of the companies through stock exchanges, conventional and non-conventional investment channels. In current economic situations low stock prices, capital gains, financial interest, stock market rumors induce individual investors to trade in stock markets. As these indices, provide fair opportunities of investment as compared to bank deposits and other modes of investments. However, financial literacy (FL) offers a bridge to investors for making sound investment decisions through the best utilization of resources.
 Methodology: This study is based on the exploration of the role of financial literacy from individual investor’s perspective. Therefore, research method for this study is ‘Grounded theory’ under the qualitative approach. For the purpose of data collection, researcher conducted in-depth personal interviews. NVIVO software has been used for qualitative analysis of the data gathered through interviews. Different techniques such as, Word Tag Cloud, Word Tree and Tree Map were used to elaborate the themes of the study.
 Findings: This study found that financial literacy, economic, political and market factors influence the quality of investment decisions of the individuals. Moreover, rumors in financial markets also affect the investment decisions of the individuals.
 Implications: This study provide better outlook about the FL and investment decisions made by people based on knowledge about finance. Generally, financial activities are performed in financial markets divided into two categories; primary and secondary markets.

Katılım Endeksinin Döviz Kuru ve Altın Fiyatlarıyla İlişkisi: Türkiye için ARDL Sınır Testi Yaklaşımı

Finansal ürün yelpazesinin gelişmesiyle birlikte tüm yatırımcılar kendilerine uygun nitelikte olan yatırım araçlarına ilgi duymaktadır. Bu bağlamda, katılım endeksleri son yıllarda yatırımcılara alternatif yatırım fırsatları sunmaktadır. Bu çalışmada döviz kuru ve altın fiyatlarının Katılım-50 endeksi üzerine olan etkisi ARDL sınır testi yaklaşımıyla incelenmiştir. Çalışmada, 2014:8 - 2021:12 dönemi için haftalık veriler kullanılmıştır. Elde edilen bulgulara göre gram altın fiyatının Katılım-50 endeksi üzerinde istatistiksel olarak anlamlı ve pozitif bir etkisinin olduğu görülmektedir. Uzun dönemde gram altın fiyatında yaşanacak bir artışın Katılım-50 endeksini artırması beklenmektedir. Aynı şekilde USD/TL kurunun Katılım-50 endeksi üzerinde istatistiksel olarak anlamlı ve negatif bir etkisinin olduğu ortaya çıkmıştır. Uzun dönemde USD/TL kurunda meydana gelecek bir artışın Katılım-50 endeksini azaltması beklenmektedir.

The Role of Predictive Analytics in Knowing the Future Prices of Listed Stocks in The Market: دور التحليلات التنبؤية في معرفة أسعار الأسهم المستقبلية المدرجة في السوق

This study aimed to identify the role of predictive analytics in knowing future stock prices listed in the market, where the researcher used the descriptive analytical method, and the study sample amounted to (13) of industrial companies listed on the stock exchange. The study came out with results The financial ratios derived from the income and financial position statements play an effective role in distinguishing between successful companies and failed companies. The proposed model based on the financial ratios derived from the income and financial position statements was able to reclassify the sample of companies used in its design within the groups (successful companies) and (failed companies). The proposed model based on the financial ratios derived from the income and position statements was able to predict financial failure in the sample of companies used in testing it within the groups (successful companies) and (failed companies). With regard to the relationship between the dependent variable and the independent variable, there is a statistically significant effect on the dependent variable. In other words, an increase in the debt ratio leads to an increase in the value of the company. With regard to the relationship between the dependent variable and the independent variable, the policy of distributions has indicated that there is no statistically significant effect on the dependent variable. Activating the use of debt by companies that use a low debt ratio through profitability, as the more profitable companies can use more debt and thus reduce the risk of debt. The impact on the distributions policy so that it is related to the degree of greater benefit from the funds between distribution and retention, as the higher dividends on the returns of alternative investment opportunities than investing in companies leads to an increase in the value of the company. Increasing profitability rates by increasing efficiency by reducing costs and increasing sales, which is reflected in the value of the company. Companies focus on maintaining a variable level of liquidity that suits The company's need from time to time, while maintaining the minimum level all the time, in order to protect the company from potential risks and thus increase the value of the company.

Sprungbrett für den US-Markt

Abstract In the context of the internationalisation and globalisation of the economy, special economic zones are playing an increasingly important role. The economic-historical evaluation of these special economic zones is controversially discussed and fluctuates between a «neo-colonialist exploitation of the Global South» based on low wages and poor working conditions as well as the exploitation of tax havens on the one hand and the emphasis on economic development potentials in these countries on the other. Using the non-representative corporate history case study of the medical technology manufacturer Sartorius, the aim is to ask, based on the motives, expectations and decision-making processes of a company in a specific economic-historical situation between the mid-1970s and mid-1980s, what significance the special economic zone of Puerto Rico had for corporate strategy in this phase. It will be shown that the corporate development and growth of Sartorius at the Goettingen location reached its limits during this period and that alternative investment opportunities were sought, which were found primarily in the world’s largest market for its products: the US market. High customs duties and transport costs ultimately led to considerations of direct investment on the American continent, whereby the investment incentives in the US special economic zone of Puerto Rico, supported by government subsidy programmes of the Federal Republic, offered considerably more advantages than on the mainland. In the case of Sartorius, with regard to the Puerto Rico Special Economic Zone, it is less about the exploitation of «neocolonial exploitation mechanisms» in a region of the Global South than about the use of Puerto Rican as well as Federal Republic investment incentives, which also offered development potential for Puerto Rico itself. Der Beitrag entstand im Kontext der Publikation Sartorius 1870–2020, von Hartmut Berghoff, Christian Kleinschmidt, Stephan H. Lindner, Luitgard Marshall, München 2021. Die spezifische Frage zur Rolle von Puerto Rico im Rahmen der Unternehmensstrategie Sartorius’ konnte dort nur knapp angerissen und nicht in seiner ganzen Komplexität dargestellt werden (135–137) und wird hier ausführlich und quellenbasiert diskutiert.

Crop receipts as alternative financial instruments

The aim of the paper is to provide insights into the lending against crop receipts mechanism. Crop receipts emerged as promising financial instruments creating an additional type of collateral for agricultural producers that pledge their future agricultural production in order to finance ongoing production activities. At the same time, they offer an alternative investment opportunity to banks through the creation of a new asset class. European Bank for Reconstruction and Development supported Serbia in establishing a crop receipt system with the aim to serve as a pilot project for Europe. This is the first analysis of the crop receipts system in Serbia. The methodology applied consists of interviews with bank representatives, extensive literature research, descriptive statistics and comparative analyses. Results are indicating that the main shortcomings in the crop receipts system include the lack of specialised shareholders' knowledge, the absence of subsidization of interest rates on loans against crop receipts followed by the lack of appropriate Central bank policy, standardization and securitization.