Exchange Market Research Articles

The Role of Secure Property Rights in Driving Economic Growth: A Review of Recent Evidence

This paper aims to briefly explain the factors contributing to economic growth, particularly emerging and developing economies, emphasizing the impacts of secure property rights. Tangible and intangible assets such as land and minerals, patents and copyrights offer the investors legal recognition that enhances investment, inventive activities and efficient market exchange. The review demonstrates how property rights reforms have positively impacted agricultural yields, credit facilities, and FDI in sub-Saharan Africa, Southeast Asia and Latin American countries. The paper also focuses on the impact of intellectual property rights on technological advancement, especially in knowledge-based societies. While the previous shows that there are gains in reforms in property rights, it has to be stated that there are still hurdles in the implementation of property rights reforms for the benefit of the more significant population due to the following: ? Finally, the paper reiterates the importance of efficient and precise laws and policies that will enhance the efficiency of the property rights to enhance the economic returns.

Russian-Chinese financial and economic cooperation: Comparative identification of the impulse response function

Subject. This article discusses the integration of Russia and China and the convergence of the economic systems of the two countries. Objectives. The article aims to identify promising areas of cooperation between Russia and China to create a common financial market and common exchange space, and analyze the impulse responses of the Russian and Chinese economies to various external and internal shocks. Methods. For the study, I used a regression analysis. Results. The article assesses the impulse responses of the Russian and Chinese economies to external shocks and identifies a synergistic effect that makes it possible to increase the validity and effectiveness of economic policies. The article also identifies the most promising areas for the development of relations between the two countries. Conclusions. At the present stage, economic and financial cooperation between Russia and China gets strengthening. In general, the results of empirical analysis correspond to theoretical expectations.

The Impact of Relationship Marketing Dimensions on Financial Indicators of Stock Exchange Market Companies

Successful businesses use a variety of tactics to accomplish their objectives, one of which is relationship management with investors and shareholders. Their best application in today’s business world is a long-term competitive advantage. One of the ways to create and retain this relationship is to use relationship marketing (RM). Various dimensions shape RM, which can be different in industries and markets. This paper aims to identify the effective RM dimensions in the capital market and examine the impact of these dimensions on the financial indicators of the capital market, which are important from both the perspectives of companies and investors, including stock liquidity, stock return, and capital cost. To identify the key dimensions, ranking based on their importance has been done using the analytic hierarchy process (AHP) method. A multivariable linear regression model has been employed to test the research hypotheses. Stock companies have been selected based on the screening method from the companies admitted to the Tehran Stock Exchange from 2019 to 2022. Based on the findings, it can be concluded that the coordinated management of various aspects of RM has the potential to enhance liquidity and stock returns while simultaneously reducing the cost of capital. Given the significance of these indicators, particularly in developing economies like the Iranian capital market, companies can leverage RM strategies in their interactions with shareholders to improve market conditions.

Impact of COVID-19 Crisis on Volatility Spillovers across Global Financial Markets: Evidence from Asymmetric GARCH Models

This study investigates the market volatility and asymmetric behavior in the commodity market, foreign exchange market, cryptocurrency, and stock markets by employing asymmetric GARCH models on the daily time series returns. The data covers the period from March 8, 2017, to March 17, 2023, and is divided in to three sub-periods: the entire sample period (March 8, 2017, to March 17, 2023), the pre-COVID-19 period (March 8, 2017, to March 10, 2020), and the during the COVID-19 period (March 11, 2020, to March 17, 2023). The empirical results show a high level of volatility persistence in all the financial markets during the COVID-19 pandemic. Additionally, the results indicate significant positive asymmetric behavior in the crude oil and stock markets during the pandemic. The findings further document that gold exhibits a strong resilience during the pandemic period, indicating its hedging ability during crisis periods. Moreover, the results suggest that the EGARCH model is the most appropriate model to capture the volatilities of the financial markets both before and during the pandemic. The findings of this study provide useful insights for investors and policymakers, enabling them to adopt effective strategies for investing in portfolios during crisis periods in the future.

Performance of power generation: A dynamic productivity and efficiency analysis

This study evaluates the performance dynamics of Oman's principal part of electricity generation. Emphasis is placed on capturing the influence of the COVID-19 pandemic on the industry's performance indicators. We utilised the Malmquist Index method to analyse the changes in overall performance indicators over time. This approach allows us to distinguish between efficiency and technology changes. In addition, we employed the analysis of variance approach to test hypotheses related to COVID-19. Data is collected from twelve electricity producers across Oman's power sector. These consist of companies listed on the Stock Exchange Market in Oman, accounting for about 60 % of the total electricity production in the Sultanate. The predominant findings indicate that COVID-19 detrimentally impacted the sector's aggregate performance in 2020 but had a swift recovery in 2021. The analysis of the sample firm's productivity indices verifies that the decline in productivity in 2020 due to the Pandemic is attributable to a decrease in average efficiency indices and a negative shift in the projected frontier. These are probable consequences of the recessionary effects caused by the Pandemic. Despite a considerable decrease in average efficiency scores, a positive change in the frontier has facilitated a rapid recovery in 2021. This recovery can be attributed to the implementation of advanced technical upgrades in particular enterprises, which began as early as 2018/2019, well before the onset of the Pandemic.

Effects of Selected Macroeconomic Variables on Market Capitalization of Nairobi, Kenya

This study examined the effects of selected macroeconomic variables on the market capitalization of the Nairobi Securities Exchange in Kenya during the period 2010- 2022, based on the Arbitrage Pricing Theory (APT) using quarterly data. The autoregressive distributed lag model technique was applied to test how market capitalization was affected by the macroeconomic variables. Gross domestic product, money supply, and inflation were stationary at the level while interest rate, market capitalization, and exchange rate became stationary at first difference. From the empirical results, no co-integration between market capitalization and exchange rate, money supply, interest rates, Gross domestic product, and inflation was found by use of bounds test. Money supply and inflation had a weak influence on market capitalization; interest rate, Gross Domestic Product, and first lag of the exchange rate were positive and affected market capitalization, while the exchange rate at the current level affected market capitalization negatively. It was concluded that macroeconomic variables affect market capitalization. The study recommends that the government need to put up relevant policies that increase gross domestic product. Policymakers need to consider macroeconomic variables during policy formulation on market capitalization.

Minimizing the reliability trade-off in wildfires risk mitigation

One of the major concerns of electric power utilities in recent years is mitigating wildfire risks. While different mitigations have been proposed and some are implemented, customer experience is less focused in some methods, and not even considered in some extreme methods. This paper focuses on minimizing such tradeoff: reliability vs. wildfire risk reduction. This paper first proposes a methodology to quantify the wildfire risk raised by electric distribution systems, utilizing the vegetation factor at proper locations as well as the probability of fault. An optimization framework is then developed in this work that considers system reliability improvement in decision-making while reducing the risk of wildfires. The means to achieve such optimization are reclosers and fuses: optimally locate them to minimize the wildfire risk while the negative impact on reliability is minimized. Both fuse-blowing and saving schemes are investigated in this work. Moreover, the temporary and permanent types of faults are taken into account by formulating their impact on the operation of reclosers and fuses in both fuse-blowing and saving schemes. The optimization framework utilizes the exchange market algorithm (EMA) to find optimal results. The effectiveness of the proposed approach is verified by utilizing a modified IEEE 123 node system.

Public holidays effects on volatility in Shanghai stock exchange market

Public holidays effects on volatility in Shanghai stock exchange market

UKRAINE’S MONETARY POLICY UNDER MARTIAL LAW

The relevance of the research is due to the change in the monetary policy regime of the National Bank of Ukraine (NBU), which consists in the transition from inflation targeting with a floating exchange rate to a fixed exchange rate as the nominal anchor of monetary policy under martial law. Such a plan to change the monetary policy regime was carefully calculated and outlined in the NBU's Monetary Policy Guidelines for the Duration of Martial Law. The timeliness and effectiveness of the NBU's monetary policy decisions enabled it to mitigate the impact of the military shock on the macro-financial stability of the national economy. The purpose of the article is to consider the theoretical and practical aspects of the NBU's monetary policy under martial law. Methodology. The study uses a systematic method of cognition to determine the sequence of application of monetary policy instruments to smooth out monetary shocks of the wartime period; an abstract-logical method to understand the future monetary policy strategy based on the abandonment of the fixed exchange rate regime and a gradual return to inflation targeting; and a statistical method to analyse the dynamics of monetary indicators of the national economy. Results. The paper presents the main principles of the NBU's monetary policy under martial law. The first shock from the war led to changes in the conduct of monetary policy and a shift to unconventional instruments of its regulation. The gradual adaptation of the economy to the new conditions determined the NBU's further steps to ease monetary policy and move to greater exchange rate flexibility. Practical implications. The practical significance of the research results is to assess the conditions for the transition from the key policy rate-based inflation targeting regime as the main monetary policy instrument to the use of foreign exchange interventions as the main operation in the foreign exchange market under martial law. Value / Originality. The originality of the article is due to the need to identify the prerequisites for the transition to a new monetary policy strategy in a wartime economy. Conclusions. The NBU's timely response to the negative phenomena associated with deteriorating inflation expectations, multiple exchange rates and pressure on international reserves helped prevent the development of a currency and financial crisis in Ukraine. Despite the active hostilities, the NBU is trying to find options that will allow it to conduct an effective monetary policy in the face of a full-scale invasion and unprecedented internal and external shocks. Internationally, Ukraine has exceeded expectations and the NBU has shown a high degree of responsibility, professionalism and creativity in the conduct of monetary policy. Increased confidence in the central bank is a valuable resource in times of martial law.

Determinants of India's cotton export performance: An empirical analysis

Cotton export performance plays a critical role in bridging the gaps in India's soaring trade deficits and helps in maximizing the overall gains from international trade. We examine the impact of macroeconomic determinants on India's cotton export performance using data from 1990 to 2020. To assess the long-run and short-run impacts on cotton export performance, an autoregressive distributed lag (ARDL) model has been deployed. The findings reveal that yield and export price have had statistically positive significant impact on India's cotton export performance over the long-run and short-run. However, the resulting estimates of market size and exchange rate do have a mixed effect on cotton export performance over the period. Moreover, our results offer some important policy implications for the stakeholders including the farmers, exporters, and government to enhance Agri-product competitiveness.

Investigating the price volatility spillover effects in the poultry industry inputs market and the egg market in Iran: using the multivariate DCC-GARCH model

BackgroundThis paper investigates the effects of price volatility spillover in the poultry industry’s input markets, including soybean meal, day-old chicks and corn, and the foreign exchange market as an independent market, on the wholesale egg market in Iran. The experimental investigation is based on dynamic conditional correlation (GARCH-DCC). It is one of the most powerful and accepted methods for studying market volatility, whose representation is based on conditional variance. On the other hand, eggs are one of the main food items in the food basket of Iranian households, playing an important role in ensuring part of the food security of the country. However, the price volatilities of its inputs, which make up more than 70% of egg production costs, cause the instability of its price and the confusion of the producers of this sector. This is although in the relevant literature, there is little research on the issue of volatility spillover effects on agricultural product markets, especially in the country.ResultsThe findings show that any shock in the input market leads to volatility and instability in the market; on the other hand, these volatilities maintain their stability. In addition, there is a spillover of exchange market volatility into corn and soybean meal input markets.ConclusionsIn that context, this article emphasizes the knowledge of market relationships and their consequences, thereby suggesting appropriate policies to control and support the domestic poultry industry.

Making the Ethiopian Banking System Ready for Green Growth and Development

ABSTRACT After two decades of high economic growth and fast development progress, Ethiopia is facing significant macroeconomic challenges such as high inflation, foreign exchange shortage, and slowing growth. At the same time, it is imperative to bring the economy on a green and climate-resilient development path. In this context, the financial sector has an essential role to play. International financial institutions recommend reducing the fiscal deficit to dampen money growth and inflation and giving up exchange rate control. Based on an alternative analysis of inflation, this article argues that money supply restrictions and fiscal austerity may not only prove ineffective in addressing inflation while incurring high economic costs, but also impede a response that comes via productive and green investment to ease the economy’s supply-side constraints and to lower inflation. Rather than fixating on the quantity of money and market exchange rates, central banking should focus on the direction of financial flows to make sure they go into real green investment rather than speculative and inflation-driving investment. This policy blueprint will also reduce balance-of-payments problems and improve both internal and external monetary stability.

Does Terrorism Still Spread Fear to ASEAN’s Financial Market?

The research aimed to examine the financial markets’ responses to terrorist attacks in Southeast Asia. Market reactions were a reflection of public sentiment. The market reaction was calculated using the stock index indicator and the currency exchange rate of the country relative to the US Dollar. The research employed a paired test to compare the period prior to and following the terrorist attack. The research used Wilcoxon Test to examine 38 terrorist attacks across four Southeast Asian nations: Indonesia, Thailand, Philippines, and Malaysia. The research concludes that the stock index exhibits both normal and abnormal returns between pre-incident and post-incident periods. Post-incident returns are higher than pre-incident returns. Stockholders are not required to sell their existing holdings in response to a terrorist attack. Between pre-incident and post-incident investors who do not invest in the capital or money markets, the foreign exchange market does not exhibit significant changes. Investors can profit by purchasing stock or foreign currency on the day of the incident or one day afterwards and selling it three days later.

Russia's transition to settlements in national currencies in the context of changes in the world monetary and financial system

Aim. To determine the background and prospects of the Russian Federation's (RF) transition to settlements in national currencies in the context of changes in the world monetary and financial system.Objectives. To analyze the current state of the currency market of the Russian Federation in terms of currency structure and main instruments; to identify the reasons for the transformation of the currency market of the Russian Federation; to characterize the prerequisites for the transition to settlements in national currencies in foreign trade; to assess the prospects of such a transition and its impact on the currency market of the Russian Federation in the context of the latest trends in the development of the global monetary and financial system.Methods. With the help of general methods of scientific cognition, graphical analysis the current state, dynamics and structure of the currency market of the Russian Federation in the conditions of sanctions are considered. In addition, the article assesses the background and prospects of the Russian Federation's transition to settlements in national currencies in view of the new trends in the development of the world monetary and financial system.Results. In 2022, after the economic sanctions against Russia were imposed, the state was forced to accelerate the process of transition to settlements in national currencies with major trading partners, and the domestic currency market underwent a significant transformation. In the conditions of digitalization of the financial sphere and the development of central bank digital currencies (CBDCs) , the introduction of international settlements using the digital ruble seems to be a promising direction.Conclusions. The period after the sanctions against the Russian Federation were imposed (2022) is marked by significant changes in the domestic foreign exchange market, primarily associated with the gradual displacement of world currencies (primarily the dollar) and their replacement by the ruble and renminbi. In general, this trend reflects the state of the RF foreign trade. With the reduction in the volume of the local foreign exchange market and the withdrawal of Western players, the government is taking measures aimed at preserving the potential of the foreign exchange market. A promising direction for international settlements under sanctions is through CBDC. However, the implementation of such a system will take years, during which the financial system of the Russian Federation will have to preserve its potential in isolation from Western financial markets.

Association rules forecasting for the foreign exchange market

Several association rule mining algorithms exist, and among them, Apriori is one of the most commonly used methods for extracting frequent item sets from vast databases and generating association rules to gain insights. In this research, we have applied a data mining technique to implement association rules and explore frequent item sets. Our study introduced a model that employs association rules to uncover associations between the foreign exchange market, the gold commodity, and the National Association of Securities Dealers automated quotations (NASDAQ). We suggested a method that used data mining to identify the good points of buying and selling in the foreign exchange market by utilizing technical indicators such as moving average convergence divergence (MACD) and the stochastic indicator to create association rules. The experimental findings indicate that the proposed model successfully generates strong association rules.

The spillover effect between central and eastern European financial markets

Abstract This paper investigates the return and volatility spillovers between EUR/RON, EUR/HUF and EUR/PLN exchange rates and S&P500 index, but also the spillover effect between the capital markets of these three countries and this index, using the methodologies of (Diebold & Yılmaz, 2012). The paper provides both a brief description of several scientific researches conducted by numerous authors in the field of literature, and a series of empirical and econometric results that support theoretical demonstrations. The main results highlight that the spread of volatilities (spillover) intensifies during periods of economic crisis, and the main transmitter of spillover on the foreign exchange market, both in terms of returns and volatilities, is the stock market index S&P500. This paper contributes to the field of spillover studies by analyzing the connection between Romanian currency and the geographic countries neighbors.

Financial Risk of Airlines in Indonesia Case Study of Kualanamo (Medan) to Soekarno-Hatta (Cengkareng) Flight Route

This reseach aims to identify and analyze the financial risks faced by airlines in Indonesia, with a particular focus on the Kualanamo (Medan) to Soekarno-Hatta (Cengkareng) flight route. Using a case study approach, the study evaluated a range of factors influencing financial risk, including fluctuations in fuel prices, currency exchange rate volatility, market competition, and regulatory changes. Data was collected through interviews with airline financial managers, analysis of financial statements, and review of related literature. The results showed that fluctuations in fuel prices and exchange rates are the main factors contributing to financial risk. In addition, intense competition and regulatory changes have also had a significant impact on the airline's financial stability. This research provides recommendations for risk mitigation strategies that airlines can implement to improve their financial resilience. The implications of these findings are expected to assist financial managers and policymakers in designing more effective policies to manage financial risks in the aviation industry.

PROBLEMS AND PROSPECTS OF FINANCIAL DERIVATIVES MARKET DEVELOPMENT

The article studies the problems and prospects of the financial derivatives market development. Globalizing the economic space contributes to transforming the stock market into the principal source of capital allocation. Still, the current conditions of the derivatives market in Ukraine do not correspond to the needs of the national economy, which requires strengthening the regulation of their activities to ensure the hedging of risks of market participants. The article analyses the dynamics of derivatives trading in the global exchange market, assesses the dynamics of world exchange trading in financial derivatives, and analyses the turnover of OTC derivatives in the EU. It also studies the dynamic changes in the amounts paid under the terms of contracts for derivative securities in the world by maturity, region and industry sector; the dynamics of options and futures trading in the global exchange market. In this analysis, we examine the trading volumes of derivatives within the financial market of Ukraine. We estimate the volume of trading within both exchange and over-the-counter markets, and present the dynamics of exchange contracts as well as the share of financial instrument trading in the securities market. The factors hindering the development of the derivatives market in Ukraine are identified. These factors include legislative shortcomings, the current level of derivatives market infrastructure, and the current state of development of the underlying asset markets. The article also analyses the derivatives market and provides prospects for its development. To ensure the future development of the financial derivatives market in Ukraine, it is essential to take certain measures. These include comprehensive regulation of the derivatives market, ensuring the operation of regulated markets and building their infrastructure, and introducing appropriate instruments to protect participants and hedge risks.

Isolating Others ——Origins, Mechanisms and Evolution

The behavior of isolating others is the alienation of life self-organization of exclusion mechanism. Isolation in modern society has evolved into a daily political game pattern, and isolation, more generally, is a hidden psychological activity. This deep field of social philosophy has yet to be revealed and reflected so far. At the core of isolation is personality denigration, thus indicating the deep origin of the core concept of contemporary social science, “social exclusion”. The group custom of isolating dissidents suppresses the personality and innovation of free individuals and leads to gangs and closed rigidity of the community. Reflecting on and revealing the anti-modernization nature associated with isolation, while simultaneously indicating the institutional and mechanistic construction of China's modernized harmonious society goal. The division of labor and market exchange in modern society contains ethical implications neglected by popular understandings that emphasize individual competition: the differences formed based on functional differentiation and individual liberation in modern society not only stimulate competition, but also create an inherent need for solidarity among individuals in terms of complementary dependence and mutual attraction. The contemporary society centered on information exchange promotes this direction to a universal dependence mechanism. The modern concept of free personality is not individualism but the internal mechanism of collective social cohesion and innovative life. Exclusive isolation and its closed community no longer have the basis of a modern system.

2 - The Migration and Informal Market Nexus: A study of Nigerien Forex Traders in Benin City

This article attempts to understand how migrant communities in the global South shape and contribute to the establishment and operation of niche sectors and informal markets in receiving states. The article examines the impact that a community of migrants from Niger Republic have had on the foreign exchange market in Benin City, Edo State, Nigeria. The analysis is situated within the postcolonial framework while drawing on sociological frameworks and methodological tools (ethnography). By analysing the narratives of Nigerien migrants in Benin City, this paper unpacks the characteristics of the migrant forex niche, the interaction between the formal and informal forex businesses in the market, as well as the interplay between migrants and locals in the community. We argue that the nexus of intra- African migrations and informal niche markets leads to spatial, political, economic and social transformations that challenge the significance of formal markets and the limitations of undocumented status.