Investment In India Research Articles

Biases in Capital Market Instrument Investing Decisions: A Study from India

This study examines the influence of different behavioral biases on the investment choices made by individual investors in the Indian capital market. The study utilizes a cross-sectional design, which entails gathering a substantial amount of data at a specific point in time. The study employed a survey methodology to collect data from a sample of 497 individual investors using purposive and snowball sampling. The data was collected using structural equation modeling (SEM), utilizing SPSS version 25 and AMOS version 26 as statistical software. This study characterizes individual investors as displaying irrational conduct. The study reveals a significant and positive association between representativeness, anchoring, and loss aversion biases and the investment decision-making process of individual investors in India. This study will enhance the current corpus of literature by examining the field of behavioral finance, which is gaining acknowledgment. Furthermore, few researchers have specifically examined these biases in developing countries, such as India.

Unveiling the Influence of Finfluencers on India's Investment Climate: A Comprehensive Analysis

Unveiling the Influence of Finfluencers on India's Investment Climate: A Comprehensive Analysis

Does “Stabilizing FDI” enable a low-carbon transition in Chinese cities?

The stable introduction and utilization of foreign investment is a guarantee for China's further opening up, and plays a significant role in urban carbon emission reduction within the framework of carbon peaking and carbon neutrality strategies. By calculating the index of Foreign Direct Investment (FDI) stability and utilizing panel data of 274 Chinese cities spanning from 2006 to 2019, this article systematically investigates the impact of FDI stability on urban carbon emissions. The results indicate that upgrading FDI stability can effectively reduce urban carbon emissions. This effect is particularly pronounced in cities with lower rationalization degree of industrial structure, higher financial investment in technology, higher foreign capital dependence and cities rely on resource-based industries. The upgrading of human capital structure, digital transformation and green technology innovation are the intermediary mechanism for FDI stability to have a carbon emission reduction effect. While the incentive effect of FDI stability on “independent innovation” is relatively lower compared to “imitation innovation”. Additionally, there is a delay in the impact of innovation quality and urban digital transformation. Further research suggests that stable FDI widens the carbon emission gap between regions, leading to an obvious “Matthew effect”, which could be effectively corrected by implementing reasonable environmental regulation and improving FDI quality.

Testing the Hedging Effectiveness of Gold Derivative Market in India

The purpose of this article is to estimate the hedging effectiveness of the Indian Gold Derivative Market from both the statistics of Static hedge methodology of Vector Error Correction Method and Time-Varying hedge methodology of DVEC-GARCH, covering the time span of 1st April 2005 till 31st March 2019, to account for any difference existence in both. The study is conducted to judge the performance of gold futures as a tool of risk management. The result reveals the fact that hedging effectiveness from both the methodologies are found to be 35%. The reason behind low hedging efficiency might be due to the fact that gold itself is used as a hedge instrument and always in demand by the Indian investors for varied reasons as well as its accessibility in various forms (Gold ETFs and Gold Bonds issued by Government). The hedgers’ participation may be less as compared to speculators with respect gold future hedging. The results of phase-wise analysis, that is, before crisis (2005–2007), the hedging efficiency comes out to be 26%, during the crisis (2008–2012) 38.7% and after the crisis (2013–2018) 40% from both the static and dynamic hedge ratio models. The results showed that with the outbreak of Global Financial crisis in 2007–2009 and European debt crisis in 2010–2012 and thereafter, gold futures are increasing use as a risk management tool, but still at a minimal level.

The Market Efficiency of Socially Responsible Indices in India

Socially Responsible Indices allow investors to invest in those companies which are deemed to be socially responsible. These indices comprise those constituent companies screened and assessed for environmental, social and governance (ESG) criteria. This paper analyses the weak form of the Efficient Market Hypothesis (EMH) for socially responsible investment indices in India. The authors used the daily closing price of two indices, Carbonex and Greenex, from June 3, 2013, to December 31, 2022. This study conducted Augmented Dickey Fuller, normality, and autocorrelation tests to analyse the randomness of prices and test whether the future price can be predicted using the past price. The weak form theory of the efficient market hypothesis is violated if the returns are not random and dependent on past returns, thereby enabling investors to gain abnormal returns by extrapolating the past data. The research results suggest that the theory of weak form of efficient market hypothesis is valid for Carbonex and Greenex, which are the socially responsible indices of India. It implies that the future movement of returns for socially responsible investment indices in India cannot be predicted from past prices. Therefore, the opportunity to gain abnormal returns is not possible.

Post COVID-19 Analysis of Conservatism Effect Bias on Individual Investors of the KMI-30 Index at Pakistan Stock Exchange

This study examines how conservative bias affected Pakistan Stock Exchange KMI-30 index investors after COVID-19. The main goal is to assess conservative bias in Pakistani stock market decision-making. Data from 162 respondents was carefully collected and analyzed using logistic regression, association testing, descriptive statistics, and correlation analysis. The study illuminates the impact of conservative bias on Pakistan's stock market investment selections. Both male and female investors react similarly to conservative bias, indicating that gender does not greatly change its effects. Conservative bias is more common in highly educated people, especially those with graduate and doctoral degrees. Younger investors (18-25) are less susceptible than 26-30-year-olds. Investors with one to three years of experience are more conservative, while those with less than a year or over three years are less vulnerable. Marital status barely affects financial prejudice. These findings emphasize the importance of demographic and experience characteristics in investment strategies and financial advice. The study underlines that good investment requires understanding psychological aspects affecting investor behavior, not just numbers. Understanding the human aspect in investment decision-making can help financial advisers, and regulators tailor advice and regulations to the varying needs and vulnerabilities of different investor groups, creating a more informed and resilient investing community.

АКТУАЛЬНЫЕ ПРОБЛЕМЫ УПРАВЛЕНИЯ СРЕДСТВАМИ ПАЕВЫХ ИНВЕСТИЦИОННЫХ ФОНДОВ В НЕСТАБИЛЬНЫХ ЭКОНОМИЧЕСКИХ УСЛОВИЯХ НА ПРИМЕРЕ АО УК «ИНГОССТРАХ-ИНВЕСТИЦИИ»

One of the key trends in the financial market, which actively manifested itself during the pandemic and then under sanctions pressure, was the active development of collective investments. At the same time, the new operating conditions for management companies, associated with the blocking of foreign assets, provoked significant difficulties in providing financial services to clients. In the current conditions, there is an increasing need to assess the practice of functioning of mutual investment funds and create mechanisms to reduce the negative consequences of the sanctions burden for individual financial market entities. Based on an analysis of the operating conditions of the management company and an assessment of the efficiency of managing the funds of mutual investment funds, it was determined that the key problems in the activities of the management company are the lack of significant financial results in the management of mutual funds, as well as the suspension of the work of five funds, which resulted in a deterioration in the financial performance of the company. In particular, there was a reduction in the company's assets by a third, an increase in country and currency risks, as well as a significant increase (by 350%) in labor costs. Based on the results of the analysis, the authors formulated measures to improve the efficiency of the company, including the creation of a personnel policy management system to improve the efficiency of the fund, the implementation of a scheme for the settlement of frozen assets by transferring funds from frozen mutual funds to a closed fund, as well as the transition to passive strategies for managing mutual funds. A project for a fund focused on Islamic investments has been developed, the portfolio of which includes shares of companies included in the Moscow Exchange Islamic Investment Index. An assessment of the fund’s potential showed prospects for forming the value of the fund's net assets in the amount of 990 million rubles.

АКТУАЛЬНЫЕ ПРОБЛЕМЫ УПРАВЛЕНИЯ СРЕДСТВАМИ ПАЕВЫХ ИНВЕСТИЦИОННЫХ ФОНДОВ В НЕСТАБИЛЬНЫХ ЭКОНОМИЧЕСКИХ УСЛОВИЯХ НА ПРИМЕРЕ АО УК «ИНГОССТРАХ-ИНВЕСТИЦИИ»

One of the key trends in the financial market, which actively manifested itself during the pandemic and then under sanctions pressure, was the active development of collective investments. At the same time, the new operating conditions for management companies, associated with the blocking of foreign assets, provoked significant difficulties in providing financial services to clients. In the current conditions, there is an increasing need to assess the practice of functioning of mutual investment funds and create mechanisms to reduce the negative consequences of the sanctions burden for individual financial market entities. Based on an analysis of the operating conditions of the management company and an assessment of the efficiency of managing the funds of mutual investment funds, it was determined that the key problems in the activities of the management company are the lack of significant financial results in the management of mutual funds, as well as the suspension of the work of five funds, which resulted in a deterioration in the financial performance of the company. In particular, there was a reduction in the company's assets by a third, an increase in country and currency risks, as well as a significant increase (by 350%) in labor costs. Based on the results of the analysis, the authors formulated measures to improve the efficiency of the company, including the creation of a personnel policy management system to improve the efficiency of the fund, the implementation of a scheme for the settlement of frozen assets by transferring funds from frozen mutual funds to a closed fund, as well as the transition to passive strategies for managing mutual funds. A project for a fund focused on Islamic investments has been developed, the portfolio of which includes shares of companies included in the Moscow Exchange Islamic Investment Index. An assessment of the fund’s potential showed prospects for forming the value of the fund's net assets in the amount of 990 million rubles.

An Econometric Study on Volatility Clusters, Dynamic Risk Return Relationship, and Asymmetry in Bitcoin Returns

The most sought-after cryptocurrency sector is facing dicey environment in India due to stringent ideology of its government that put Indian investors in dilemma in envisaging this sector as a virtuous investment avenue. The investors are very curious for this sector and their curiosity aroused the need for its evaluation in terms of risk-return dynamics in contemporary scenario. The present study is an endeavor to econometrically explore volatility clusters, dynamic risk return relationship, and asymmetry in Bitcoin return series covering the period from August 2010 to February 2022. The results of Augmented Dickey–Fuller test, Ng–Perron tests, Ljung Box Q test, Engle’s ARCH, and White test asserted that the Bitcoin return series is stationary and has apparent volatility clusters in it. The estimates from GARCH-M model confirmed the absence of risk return relationship and the estimates from ARMA-EGARCH model confirmed the presence of asymmetry (leverage effect) in Bitcoin return series. However, the results of ARMA-TARCH model confirmed the absence of asymmetry in the series and further diagnostic checking asserted that ARMA- TARCH model is the best fitted model. These estimations may help the investors in comprehending risk-return dynamics of investment in Bitcoins for framing better hedging strategy in contemporary scenario.

Reducing fossil fuel dependency in smallholding farming in l'Horta de València, Spain: A socio-metabolic approach

To favor transition towards sustainable agricultural systems, the agricultural sector needs to reduce its dependence on external inputs. From an ecological economics perspective, this requires the simultaneous fulfillment of a gross energy surplus on the farm (production condition), and a greater recirculation of the production extracted from the agroecosystem (reproduction condition). Using eight smallholder farms, this study focuses on the processes of recirculation and externalization of biomass, materials and energy flows in the agroecosystem. This is carried out through analyzing the MEFA (Material and Energy Flow Analysis) matrix by means of energy return on the investment indexes of inputs or externalizations (EFEROI), recirculations (IFEROI), joint efficiency (NPPact EROI) and labour efficiency (W EROI), all of which impact upon farm-scale decision-making related to yield and cost-benefit situations. Agrarian fossilization indices are applied to include an assessment of farm non-renewable energy profiles. The results indicate a restriction of inputs in conventional farm-operators and a troubling use of indirect fossil-fuel in organic operators, together with a weakening of the agroecosystem reproductive processes by means of external inputs for both systems. To guide the agrarian transition, farming strategies need to focus on reducing indirect fossil-fuel energy consumption, rather than relying on technological substitutions.

Basic Analysis of Three Stock in the Real Estate Industry

This academic article aims to conduct a comprehensive investment analysis of three large stocks in the USA market: Realty Income Corporation (Stock O), AvalonBay Communities Inc. (Stock AVB), and Welltower Inc. (Stock WELL). First, the PEST analysis, which includes political, economic, social, and technological aspects, is involved in the article to present the whole macroeconomic background. Moreover, the PEST results show that the total environment is positive to invest in the real estate industry. Then the stock analysis covers crucial factors such as market risk, debt ratios, current ratios, price-to-earnings (P/E) ratios, price/earnings-to-growth (PEG) ratios, return on assets (ROA), discounted cash flow (DCF), momentum, insider ownership, and investment preferences and give some suggestions to different investors, such as PEG investors, index investors, inside buyers and so on The findings presented herein provide valuable insights for investors seeking informed decisions in the dynamic landscape of the USA stock market.

Stock Investment Value Analysis Based on Sports Brand Section

This article briefly analyzes the risks, profitability, and market ratios of the stocks of three sportswear brands and gives investment advice for different types of investors. Lululemon, Nike, and VF Corporation are three sports industry brands. First, none of the three stocks are value stocks. Because of its better upward momentum, Lululemon would be a satisfying choice for momentum investors. Due to its insider buying of more than 4% and its highest ROA among them, Lululemon is also the best choice for insider buying and ratio analysis investors. Due to its PEG ratio of less than 1, dividend yield greater than 6, and DCF valuation higher than the current stock price, VF Corporation is popular with PEG, income, and DCF investors. NIKE has a stock buyback of more than 1B USD, which is the highest among the 3 stocks, so stock buyback investors are more inclined to invest in it. Lululemon and NIKE have market caps higher than 15B USD, so they have less size risk, which makes them more favored by index investors.

A Comprehensive Analysis of Stock Investment Recommendations Based on the Liquor Industry: Risk, Profitability, and Ratio Perspectives

Focusing on the liquor industry, this study takes Kweichow Moutai Liquor Co., LTD., Shanxi Xinghuacun Fen Distillery Co., LTD., and Sichuan Tuopai Shed Liquor Co., LTD., as the objects, and provides targeted investment suggestions for different types of investors by analyzing risk, profitability, valuation and other indicators. The results show that Kweichow Moutai has an excellent performance in market value and ROA, which is suitable for index investment and ratio analysis investors. Shanxi Xinghuacun Fen Distillery attracts the attention of income investors with its high dividend rate; Sichuan Tuopai Shede Wine's low PE Ratio may attract value investors. Depending on the type of investment, we provide investment advice for index investors, ratio analysis investors, income investors, value investors, PEG investors, discounted cash flow investors, momentum investors, insider trading investors and share buyback investors. The results and analysis of this study can help investors more accurately evaluate the investment value of different liquor companies to meet their specific investment objectives and risk preferences.

Impact of Behavioural Biases on Investment Performance: A Comparative Analysis of Investors from India, USA and UK

This study presents evidence towards the existence of behavioural biases while analysing the impact of such biases on the investors’ investment performance in India, the USA, and the UK. Further, the study aims to investigate the moderating role of financial literacy on the relationship between behavioural biases and investment performance. It reveals that behavioural biases like affect heuristic, herding and status quo positively impact the investors’ investment performance amongst Indian investors whereas loss aversion, overconfidence, availability, and representativeness biases positively impact the investors’ investment performance amongst UK investors; and affect heuristic bias amongst USA investors. The findings divulge the negative impact of anchoring bias and mental accounting amongst Indian investors; availability bias, disposition effect, and overconfidence bias amongst USA investors; and affect heuristic and herding amongst UK investors. The study finds that a few of the behavioural biases impact investment performance positively, though less often. Hence investors should be cautious as these biases generally lead to irrational decision-making and might adversely influence the investors’ investment performance in the long run. The study further concludes that financial literacy significantly moderates the relationship between anchoring bias and individuals’ investment performance in India and affect heuristic in the USA. Interestingly, in the UK scenario, no significant moderating impact of financial literacy was found between any of the behavioral biases and investment performance.

Fuzzy clustering approach to portfolio management considering ESG criteria: empirical evidence from the investment strategies of the EURO STOXX Index

Environmental, social and governance (ESG) criteria are becoming increasingly important in the construction of investment portfolios. Analysis of the investment markets confirms that these criteria are being actively integrated into investment strategies. This paper presents our approach to incorporating ESG criteria into the portfolio construction process based on an index investment strategy. This strategy is enhanced by the inclusion of ESG criteria in the form of ESG scoring. Investment portfolio construction focuses on the application of three criteria: maximizing ESG score, minimizing risk and maximizing expected return. Our approach applies a fuzzy clustering toolkit to the set of index components. In the resulting fuzzy clusters, their core part (companies that do not belong to other clusters) and the fuzzy part are separated. The proposed investment strategy involves the construction of portfolios with a variation of the components of the fuzzy part. A VAWI (Value Added Weekly Index) curve is designed for each portfolio. The optimal strategy is implemented by constructing and reconstructing portfolios according to the upper line of the VAWI set. This investment strategy is demonstrated using the example of the EURO STOXX 50 index, which includes large companies from 11 Eurozone countries.

Indian institutional investor's portfolio concentration decision: skill and performance

PurposeThis study examined Indian institutional investors' holding data to understand their investment strategy (Portfolio Concentration/Diversification) and explored whether their skills were associated with their portfolio strategy and performance. The study introduced a new proxy to identify skilled investors by forecasting abnormal returns. Moreover, the study also highlighted where skilled Indian investors put their money for long-term investment.Design/methodology/approachThis study measures portfolio concentration based on the number of holdings, the Hirschman–Herfindahl index (HHI) and benchmarks adjusted industry concentration. The study introduced a new proxy to identify skilled investors. We measured Investors' performance with the help of Carhart's four factors model and examined the relationship between variables through various regression models.FindingsThe study concluded a negative relationship between portfolio concentration and performance. However, skilled Indian investors get rewards from portfolio concentration decisions. It was found that skilled investors with few stocks and an industry concentration in their portfolio show a positive association between concentration and fund performance. Additionally, this study found Indian investors showing their faith in the financial sector for long-term investment.Originality/valueThis study examined Indian institutional investors' portfolio concentration strategy and introduced a new proxy to measure investors' skills.

Proposing a sustainable investment index for measuring economic performance and sustainability: A step toward clean and affordable energy

Numerous economic and non-economic factors significantly influence decision-making concerning investments in green energy. However, developing an index that allows for benchmarking and evaluating economic performance and overall sustainability on a global scale is imperative. In this regard, this study introduces the Green Energy Sustainable Investment Index (GESII) as a composite measure utilizing entropy weight and the “Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS)” approach. This index encompasses 47 countries and comprises 22 indicators categorized into four dimensions: social, economic, environmental, and institutional. Over the period spanning from 2006 to 2020, this study analyzes the progression of GESII for forty-seven countries affiliated with the Belt and Road Initiative (BRI). Singapore secures the top position in the overall GESII ranking, followed by Estonia, Brunei Darussalam, the United Arab Emirates, and the Czech Republic. Conversely, Iran and Lebanon occupy the lowest positions in GESII, indicating that these countries have the poorest scores across all four dimensions. In addition to presenting the overall rankings, this study offers comparative analyses of the leading three country profiles for each region within the BRI countries based on GESII. The newly proposed index, GESII, is valuable for guiding investment decisions and contributing to policy discussions.

Trading and Shareholder Democracy

ABSTRACTWe study shareholder voting in a model in which trading affects the composition of the shareholder base. Trading and voting are complementary, which gives rise to self‐fulfilling expectations about proposal acceptance and multiple equilibria. Prices and shareholder welfare can move in opposite directions, so the former may be an invalid proxy for the latter. Relaxing trading frictions can reduce welfare because it allows extreme shareholders to gain more weight in voting. Delegating decision‐making to the board can help overcome collective action problems at the voting stage. We also analyze the role of index investors and social concerns of shareholders.

Green Business and Performance of Green Stock Indices in COVID-19 Impacted Indian Stock Market: A Study with Reference to BSE S&P GREENEX and CARBONEX

The Indian stock market and the investors’ confidence level was affected badly by COVID-19 crisis. World Business Council for Sustainable Development (2020) had stated that investor decision-making at the present time is influenced by the sustainability orientation of the companies. In the context of COVID-19 crisis, it is important to project investor behaviour in the post-lockdown phase to understand the stock market potential. This research has attempted to perceive the status of economic resurgence with respect to two Bombay Stock Exchange (BSE) green indices, that is, CARBONEX and GREENEX. A comparative analysis of such indices has been performed over the lockdown and unlockdown phases until 20 July 2021. This research attempted to find if the indices were significantly different in lockdown and unlockdown phases. A significant mean variance would indicate development in sustainable business operations since lockdown period and an increment in such values would draw better investment in Indian stock market in future, even amid further mild COVID waves with partial lockdowns. One-way between-the-groups ANOVA has been performed to see if the means of CARBONEX and GREENEX indices are significantly varying in the aforementioned phases. A significant variance will help the Indian investors to look forward to the post-COVID economic reinstatement.

Role of Herd Behavior on Investment Decision of Mutual Fund Investors in India - An Empirical Study

Behaviour finance helps to understand the attitude and perception of investors on their investment decisions. Every investor differs from others in all the aspects due to a range of factors like demographic and socio-economic background. An optimal investment decision plays a vital role and is a major deliberation.
 This paper analyses the role of herding behaviour on Indian mutual fund investors. By referring to psychology and pointing out the imperfections of a human mind, it reveals mistakes committed by both individual and professional investors.
 This study captures the impact of herding behavior and overconfidence biases on the investors’ decision-making in India The proposed study will collects the necessary data through questionnaires distributed among 113 respondents who were investing in mutual fund. The results show that overconfidence and herding bias have significant positive impact on investment decision. Overall results conclude that individual investors have limited knowledge and more prone towards making psychological errors. The findings of the study also indicate the existence of these four behavioral biases on individual investment decisions. This study will be helpful to financial intermediaries to advice their clients.