Medium Investors Research Articles

Funds Flow and Performance of Managed Funds in Pakistan

The main purpose of this study is to examine the mutual fund industry of Pakistan, to examine the assets allocation pattern of mutual funds, how efficiently they are allocated into various assets categories and how investors base their future investment decisions either on past performance or on the basis of risk, size of fund, and availability of alternative investments. On the basis of results it is noted that on average small and medium investors prefer investments in less risky assets and base their future investment decisions on the basis of past performance whereas big corporate investors calculate risk and make their investment decisions after complete analysis. This study uses panel regression model to test the relationship between past performance and excess returns. The results indicate that fund managers use past performance of a fund as marketing tool to attract investors to invest in a fund which are performing well in recent past. These findings are of immense importance for policy makers as well, to formulate policies which are beneficial for investors and do not allow fund managers to get advantage from investors.

Impact of Investors in Distressed Housing Markets

We examine a recent trend in the market where investors purchase residential properties. We find that investors purchase at a discount of 9.5% compared to individuals purchasing in the same time period and geographic area. More specifically, we find that small investors purchase at a discount of 8.0%, medium investors purchase at a discount of 11.1%, large investors purchase at a discount of 13.6%, and institutional investors purchase at a discount of 7.7%. We also find that the presence of investor buyers in a market helps improve house values. A 10% increase in the percentage of houses purchased by investors in a census block leads to a 0.20% increase in house prices.

Real Estate Investment Trends in Unauthorised Colonies: A Case Study of Sangam Vihar, New Delhi

In recent years, Delhi has had an explosive growth in terms of economic development and population growth. Major contributor being In-Migration of poorer sections of society coming to Delhi for better employment opportunities. Hence there is a growing shortage of housing in the city. The apex body DDA, has not been able to provide planned and legal housing options for the people, especially the poorer section. This study is an investigation to unravel the Real estate market in the colonies wherein such sections of society has opted to build their houses, however it being in an illegal manner. The study is based on the parameters of investment, such as, Size of investment, plot sizes, Liquidity of buying and selling period, Lock-in period for the investment, the FAR built-up in these colonies. Other parameters include Net Annual income (rental) Type of accommodation available for rent, duration of stay of the tenants, size of investment- post purchase. The Average rate of return based on the lock-in period and the size of investment. These parameters along with the advantages have pronounced these UACs as a very good investment option among small and medium investors, besides being a good housing option.

About Shanghai Jahwa United in the Struggle for Control of the Company’s Thinking—Based on the Equity Culture and the Analysis of the Efficiency of Corporate Governance Perspective

Shanghai Jahwa in the struggle for the control of company is the most focus event in capital market recently. Finally, the investor Pingan Trust took the real control of the company after overcoming the management. The conclusion is that analyzes shanghai Jahwa struggled for control of company, base on two relatively new perspective of the equity culture and corporate governance efficiency. Two conclusions are drawn, to begin with, capital is represented by Ping An Trust obtained absolute control of Shanghai Jahwa isn’t caused by who is the largest shareholder, it is due to lack of equity cultures. A deficiency in market participants’ comprehension and respect of equity essential characteristics and the essential meaning of equity culture what is protection of investors, especially small and medium investors. The result will inevitably lead to the value of shareholder plunged and the efficiency of corporate governance dropped obviously. Secondly, it puts forward that the aspect should be paid attention to, namely, the equity culture is significant to improving the efficiency of corporate governance and forming a corporate governance structure

Understanding Dynamic Mean Variance Asset Allocation

We provide a new portfolio decomposition formula that sheds light on the economics of portfolio choice for investors following the mean-variance (MV) criterion. We show that the number of components of a dynamic portfolio strategy can be reduced to two: the first is preference free and hedges the risk of a discount bond maturing at the investor's horizon while the second hedges the time variation in pseudo relative risk tolerance. Both components entail strong horizon effects in the dynamic asset allocation as a result of time-varying risk tolerance and investment opportunity sets. We also provide closed-form solutions for the optimal portfolio strategy in the presence of market return predictability. The model parameters are estimated over the period 1963 to 2012 for the U.S. market. We show that:(i) intertemporal hedging can be very large, (ii) the MV criterion hugely understates the true extent of risk aversion for high values of the risk aversion parameter, and the more so the shorter the investment horizon and, (iii) the efficient frontiers seem problematic for investment horizons shorter than one year but satisfactory for large horizons. Overall, adopting the MV model leads to acceptable results for medium and long term investors endowed with medium or high risk tolerance, but to very problematic ones otherwise.

Medium and Small Investors Interest Protection: Why Am I the One Who Always Gets Hurt?—Case Study of Kang Zhi Pharmaceutical

To safeguard the legitimate rights and interests of medium and small investors is the basic premise of the stable development of the capital market, and is a powerful driving force to promote the improvement of capital market. However, with the rapid development of China’s capital market, a series of major financial fraud cases of listed companies have occurred in succession. These events not only cause great negative impact on our country immature capital market, but also bring serious damage to the interests of medium and small investors. This paper takes the Kang Zhi pharmaceutical financial fraud case as an example, analyzing the root of the financial fraud and its impact on the interests of medium and small investors. Also, in order to improve the mechanism of corporate governance supervision, to improve the quality of intermediary, and to strengthen management of the capital market legal system, some suggestions are given.

Test of Random Walk Theory in the National Stock Exchange

Capital market being a vital institution which facilitates economic development. It is true that so many parties are interested in knowing the efficiency of the capital market. The small and medium investors can be motivated to save and invest in the capital market only if their securities in the market are appropriately priced. The information content of events and its disseminations determine the efficiency of the capital market. That is, how quickly and correctly security prices reflect these information show the efficiency of the capital market.The term market efficiency is used to explain the relationship between information and share prices in the capital market. The three forms of market efficiency are weak form, semi – strong form and strong form. A market is considered as weak form if current prices fully reflect all information contained in historical prices. Thus, no investor can devise a trading rule based on past price patterns to earn abnormal return. A market is semi-strong efficient, if stock prices instantly reflect any new publicly available information. A market is said to be strong form efficient, if prices reflect all types of information whether available publicly or privately.It is usually believe that the markets in developing and less developed countries are not efficient in semi-strong form or strong form. In the developed countries, many research studies have been conducted to test the efficiency of the capital market. In India, very few studies have been conducted to test the efficiency of the capital market.The weak form of efficient market hypothesis also known as Random Walk Hypothesis states that at a given point of time, the size and direction of the next price change is at random.Hence, this paper has made an attempt to analyse whether prices in National Stock Exchange follow a random walk process as required by market efficiency.

Herding, Heterogeneity, and Momentum Trading of Institutional Investors Across Asset Classes

This paper examines herding, heterogeneity, and momentum trading of institutional investors in Israel across a broad variety of financial assets. While previous studies typically focus on stocks only, we examine herding patterns, heterogeneity, and momentum trading of institutional investors in five asset classes. We find that during the sample period (1/2002 – 12/2011) large investors tended to herd more than medium and small-size investors. In contrast, small investors used momentum trading patterns more than medium and large-size investors. Homogeneity was found among large investors, especially pension funds, and during the first half of the 2000s, when investors purchased corporate bonds at the expense of government bonds. This phenomenon ended upon the beginning of the subprime crisis and against the backdrop of the financial difficulties of the bond issuers. In those years, panicked investors withdrew funds from the most liquid institutions (study funds), while infusing funds to pension and provident funds due to legally binding arrangements. We attribute some of the heterogeneous trading of the institutional investors, to those factors.

Does the balance of power among block shareholders have impact on top management turnover?

PurposeThe purpose of this paper is to examine whether the shareholding of the largest shareholder and other large shareholders could exert a good stimulating effect within a firm's corporate governance structure and what impact the balance of power among large shareholders could have on top management turnover.Design/methodology/approachThis paper has investigated 787 firms publicly listed in the Shanghai Stock Exchange and checked the relation between power balance of firms' block shareholders and their top management turnover.FindingsThe paper's empirical results show that there is a U‐shaped relationship between the proportions of shareholding of a firm's largest shareholder and its top management turnover, that is, the controlling shareholder could impose either negative or positive effect for different types of equity ownership. We also find that the proportion of shares held by other block shareholders is significantly and positively related to the turnover of management and the monitoring effect of other large shareholders is strong. Furthermore, duality of chairman and CEO shows a significant negative effect on firms's top management turnover.Originality/valueThe paper usefully shows that under the institutional background of relatively weak legal protection for medium and small investors in China, centralized shareholding by large shareholders in listed firms, or the so‐called mechanism of power balance among block shareholders, has the ability to effectively supervise and restrain the corporate governance of a firm, replace ineffective managers and thus improve its whole management performance.