Secondary Market Research Articles

Cross-Market Impact of Platforms' Activities: A Proposal to Introduce the Obligation to Define a Secondary Relevant Market

Cross-Market Impact of Platforms' Activities: A Proposal to Introduce the Obligation to Define a Secondary Relevant Market

Legal Aspects of Secondary Capital Market Development in Ethiopia

Legal Aspects of Secondary Capital Market Development in Ethiopia

Material deprivation and employment status in post-transition: Evidence from North Macedonia

Poverty and social exclusion are often associated with unemployment, but being employed is not always sufficient to provide decent living conditions for workers and their families. In this context, the aim of this article, drawing on SILC micro data, is to assess the underlying causes of severe material deprivation in North Macedonia from the point of view of employment status, particularly the differences between employed and unemployed workers. The results show that employed workers face a much greater risk of severe material deprivation if they are positioned in the so-called secondary labour market; while the unemployed with low capital accumulation and those living in households with low work intensity face the highest risks of all. North Macedonia’s adjustment mechanisms do help cushion the consequences, but the article concludes with several policy recommendations for additional action to reduce severe material deprivation covering: education and training; active labour market policies; unionisation and collective bargaining; wage subsidies and taxation; and a statutory minimum wage.

Developing Housing Finance in Pakistan – Challenges and Opportunities

Expanding home-ownership poses a fundament financial challenge arising out of the long-term nature of the asset, which calls for the development of institutions and markets to facilitate the flow of long-term funds. Development of the secondary mortgage market would alleviate classical maturity mismatch and liquidity issues. The public sector can provide an enabling environment with sound macroeconomic policies, corporate governance, rule of law, and enforceability of contracts. This study draws policy implications using the empirical evidence on the determinants of mortgage depth and penetration across countries. A large part of the variation in these two dimensions across countries is explained by the level of their financial development. Development of long-term sources of funds intermediated through specialized institutions seems particularly important, as we find that the development of pension funds, which are a source of long-term funding, is strongly associated with mortgage market development. Monetary and macro-economic stability, as indicated by a low and stable rate of inflation, appears to be a strong predictor of mortgage market development. We also detect a positive relationship between the degree of competition in the financial sector and mortgage market development.

Research on the Effectiveness of China’s A-share Main Board Market

The effectiveness of the stock market is an important indicator to measure the efficiency of capital allocation in the secondary financial market, and is of great significance to the operation of the national economy. Whether the Mainland China’s stock market is weakly effective has always been controversial. This article uses the measurement method to conduct empirical data research on the five randomly selected stocks and the Shanghai Composite Index, analyzes the conclusions and analyzes the underlying reasons that lead to the low effectiveness of the Mainland China stock market.

Race and Property Law

This chapter offers an outline for understanding the key role of race in producing property values in the history of the American property law system. It identifies major developments in the mutually formative relationship between race and property in America that made and remade property interests in America through the processes of 1) dispossessing nonwhites, 2) degrading their homelands, communities, and selves, and 3) limiting their efforts to enter public space and occupy or acquire property within the regime thereby established. First, it describes the use of law to create the two most important forms of property in the colonies and early Republic, both of which acquired value and status as property through white ownership and control– namely, enclosed land and enslaved human beings. Second, it addresses the significant shift in the way that race produced property values after the abolition of slavery, and how the anti-blackness entrenched by the slave trade spurred and organized resistance to Black landownership and property rights more generally. Third, it turns to the way the government, after consolidating the national territory through conquest, drew upon the continuing backlash to abolition and widespread desire for racial segregation to remake the infrastructure and the very commodities on offer on the real estate market through its notorious redlining program and establishment of a major secondary mortgage market. In this way, it seeks to show the structural relation between transformations to the property system during these different historical periods and the evolving role of race in its organization, while providing comprehensive citations, in the style of a handbook, to relevant scholarship and primary materials throughout.

Literature Survey and Research Agenda of Risk Determinants in Indian Equities and Machine Learning

Notwithstanding the financial slowdown and severity of the Coronavirus pandemic during 2020, several retail investors ventures directly to the secondary equities market, setting off gigantic purchasing. A review of SEBI data indicates that over 6 million new dematerialization accounts between April and September 2020 are about 125 percent growth on year on year basis. At the same time, data reported by AMFI shows net outflows from equity funds by retail investors. These data points indicate that retail investors may have opted to invest using direct stock investments instead of relying on the equity mutual fund manager. Equity Investment is a dynamic process requiring and require considering different variables in selecting and, more importantly, avoiding stocks. The cornerstone of wealth creation is to invest in stores at a price considerably smaller than their intrinsic value. The very foundation of creating long-term wealth using equities is deeply embedded. One is buying businesses at a price substantially below its intrinsic value (intrinsic value indicates the entity's future cash flows after estimating the number of accounting risk, macro-economic, managerial, and behavioral risk determinants). This Literature review, therefore, is organized to cover Behavioral, Accounting, Macro-economic, Volatility, and Management theories and Forecasting and ML techniques for clustering, predictions, and classification to support risk decisions using different models, e.g., ARIMA, LSTM, VAR, Facebook Prophet, ARCH and GARCH family models, etc. The literature review also establishes that the concept of risk is highly subjective and is perceived by different investors differently; it is not always entirely objective and outside the beliefs, cognitive and socio-cultural considerations requiring careful assessment before making investment decisions. However, examining the critical risk indicators would allow investors to make a more informed decision. The research gap and identified agenda for further review were defined and assessed using valuable ABCD and SWOT management frameworks. Consequently, the literature investigation findings are analyzed by offering recommendations for creating a comprehensive research agenda pertinent to long-term equity investors in the Indian Equity market.

Investigating the impacts of core educational quality on the satisfaction and loyalty of parents of secondary school students: The mediating role of transformative quality

As competition in the secondary education market grows, increasing service quality to ensure parents’ satisfaction and loyalty is crucial to the future success of secondary schools. As parents of s...

Tracking Owners’ Sentiments: Subjective Home Values, Expectations and House Price Dynamics

Economic theory predicts that expectations on future house price growth are related to the current price of a house. We test this relationship for the supply side of the secondary housing market using micro data that links individual expectations to a subjective owner estimated value (OEV). We find a strong causal relationship that optimistic expectations indeed imply higher OEVs as compared to neutral or pessimistic expectations. We find qualitatively and quantitatively consistent results for Italy and the US as well as for booming and gloomy years. Our results survive ample robustness checks. Since we use subjective data on house prices, we first show that OEVs are indeed a valid source to study house price dynamics by performing three types of convergent validity tests. We find that price dynamics derived by either combining OEVs and dwelling characteristics, or making use of repeatedly provided OEVs by the same owner over time reproduce objectively measured market trends strikingly well – even over decades. In contrast, OEVs and objective data tend to differ in levels – potentially due to psychological bias. These results hold for a large set of countries. We hence conclude that the wisdom of the home-owner crowd is sufficient to study house price dynamics but OEVs are less suited for measuring the level of market prices.

ДОСТУПНОСТЬ ЖИЛЬЯ В РЕГИОНАХ РОССИИ: АНАЛИЗ И ИНТЕГРАЛЬНАЯ ОЦЕНКА

Housing affordability in the regions of Russia based on the calculation of indicators that characterize the ability of citizens to improve housing conditions in the housing market and in the rental market is analyzed in this paper. Approach to a comprehensive assessment of housing affordability in the regions based on determining the aggregate rating of the region by the level of housing affordability is developed by the authors. The proposed approach is based on the method of sums of ranks – the aggregate rating of the region by housing affordability is determined by using the total rank of the region by the level of housing affordability. Sum of ranks of region by indicators of housing affordability is total rank of the region. The approach developed by the authors allows for a comprehensive analysis of housing affordability in the regions, taking into account the investment opportunities of the population in the primary and secondary housing market, in the rental housing market, as well as the availability of housing mortgage lending in Russia. Assessment of the aggregate housing affordability rating is the basis for analyzing housing affordability at different stages of housing reproduction. The proposed approach also allows to analyze the relationship between the comprehensive level of housing affordability in the regions and other parameters that characterize the development of the housing sector. The proposed approach is tested in this article. Significant differences in the level of investment opportunities for households in the regional housing markets was shown based on the determination of the aggregate rating of housing affordability in 78 regions of Russia. The influence of housing affordability in the regions on the volume of housing construction based on the analytical grouping of data was shown.

Virtual Competition and Cost of Capital: Evidence from Telehealth

Using the staggered implementation of telehealth parity laws in the U.S. Healthcare industry, we find causal evidence that virtual competition affects U.S. hospitals' cost of capital through a credit risk channel. Financial statements indicate that rural hospitals lose patients to urban hospitals in the same state after states require equivalent reimbursement of remote and in-person services. These effects increase rural hospital bankruptcy risk indicated by leverage and Z-Score. This increased financial stress translates into lower credit ratings and a higher cost of capital for rural hospitals. Controlling for bond characteristics, we find that affected rural hospitals' new bond costs rise by 20 - 38 bps relative to urban hospital bonds issued in the same state and in the same year. Secondary market yields of outstanding rural bonds increase by a significant 8 - 17 bps. Overall, we conclude that virtual competition in healthcare provision exacerbates healthcare inequality between rural and urban areas.

Optimal Allocation to Private Equity

We study the asset allocation problem of an institutional investor (LP) that invests in stocks, bonds, and private equity (PE). PE investments are risky, illiquid, and long-term. The LP repeatedly commits capital to PE funds, and this capital is gradually called and eventually distributed back to the LP. We find that PE investments substantially affect the LP’s optimal allocations. LPs with higher and lower risk aversion follow qualitatively different investment strategies, and PE allocations are not monotonically declining in risk aversion. We extend the model with a secondary market for PE partnership interests to study the implications of trading in this market and the pricing of NAV and unfunded liabilities.

Inventory Model for Imperfect Quality Deteriorating Items with Carbon Tax Regulation

Emissions of carbon are one of the primary causes of global warming. Several countries are currently working on reducing carbon emissions. For many countries, carbon taxes and cap policies are the key mechanisms used to accomplish this goal. To deal with this issue, a sustainable economic production quantity (SEPQ) carbon tax and cap model is considered in order to control carbon emissions. Based on carbon emissions and defective rate, we present an integrated single-vendor single-buyer inventory model for deteriorating items with imperfect quality. Screening has been done on the produced units to find the imperfect units, but the screening rate is below or equal to the production rate and greater than demand. A secondary market buys the defective products at a discount price. In order to reduce work-in-process inventory and carbon emissions, the study aims to increase throughput times. We also examine the effect of carbon tax regulation on the potential emission reduction from the developed deteriorating item model. Results from the application of a numerical example and sensitivity analysis confirm the impact of carbon tax regulation on reducing carbon emissions.

Fuzzy regression model for forecasting impact of venture capital network and underwriter network on IPO premium

In recent years, social network analysis is one of the top 20 fields of artificial intelligence. Based on the network signal theory, this study examines the influence of the dual network embeddedness on the premiums of Chinese initial public offerings (IPOs). In this paper we proposed fuzzy regression model for forecasting the impact of venture capital network and underwriter network on IPO premium based on some hypothesis. We find that: (1) Enterprises embedded in the central position of venture capital network will increase the IPO secondary market premium; (2) Secondly, employing underwriter in the central position of underwriting network will increase the IPO secondary market premium; (3) As venture capital are getting closer to the central position of venture capital network, the influence of underwriter network centrality in underwriting network on the increase of IPO secondary market reaction will gradually weaken. The research shows that occupying central position both in venture capital syndication network and underwriting network have the functions of sending signals, then increase the IPO secondary market premium, but the functions of different network signals will replace each other.

Municipal Markets and the Municipal Liquidity Facility

Municipal bond markets experienced a significant amount of strain in response to the COVID-19 crisis, creating liquidity and credit concerns among market participants. During the economic shutdown resulting from the pandemic, income tax revenues were deferred and sales tax revenues decreased beginning in spring 2020, while the cost of borrowing significantly increased for municipal issuers. To aid municipal borrowing needs, the Federal Reserve implemented the Municipal Liquidity Facility (MLF) on April 9, 2020. In this analysis we describe the municipal market conditions as they evolved during 2020, we document the response by the Federal Reserve to municipal market distress with a focus on the MLF, and we conduct an event study to examine MLF-related impacts on market index yield spreads. We detail two case studies that compare yield spreads for two issuers that had sold debt to the MLF and find that yield spreads in secondary market transactions for these two issuers were notably reduced after a public announcement of intent to sell debt to the MLF. Our results present additional evidence that the MLF had a positive impact on municipal market functioning during the pandemic period.

Discount Rate Risk in Private Equity: Evidence from Secondary Market Transactions

Standard measures of private equity performance based on cash flows overlook discount rate risk. An index constructed from prices paid in secondary market transactions indicates that private equity discount rates vary considerably. While the standard alpha for our index is zero, measures of performance based on cash flow data for funds in our index are large and positive. To illustrate that results are not driven by idiosyncrasies of private equity secondary markets, we obtain similar results using cash flows and returns of synthetic funds that invest in small cap stocks. Ignoring variation in PE discount rates can lead to a misallocation of capital.

COVID Response: The Primary and Secondary Corporate Credit Facilities

The Federal Reserve introduced the Primary Market Corporate Credit Facility (PMCCF) and the Secondary Market Corporate Credit Facility (SMCCF) in response to the severe disruptions in corporate bond markets triggered by the COVID-19 pandemic and subsequent economic shutdowns. The Corporate Credit Facilities (CCFs) were designed to work together to restore functioning of credit markets, with an overarching goal of facilitating credit provision to the non-financial corporate sector of the U.S. economy. This paper provides an overview of the CCFs, including detailing the facilities’ design, documenting their operations and usage, and describing their impact on corporate bond markets.

EBITDA Add-backs in Debt Contracting: A Step Too Far?

Financial covenants in syndicated loan agreements often rely on definitions of EBITDA that deviate from the GAAP definition. We document the increased usage of non-GAAP addbacks to EBITDA in recent times. Using the 2013 Interagency Guidance on Leveraged Lending, which we argue led to an exogenous increase in non-GAAP EBITDA addbacks, we show that these addbacks increase the likelihood of loan delinquency and default, and also increase the likelihood of the borrower experiencing a ratings downgrade. Greater use of non-GAAP EBITDA addbacks also makes it more likely that lead arrangers lower their loan share exposures through secondary market sales. Our results highlight that covenants based on customized measures of EBITDA hurt loan performance by worsening lead arrangers' incentives to monitor borrowers and by hampering their ability to take timely corrective actions.

ETF effects: the role of primary versus secondary market activities

ETF effects: the role of primary versus secondary market activities

GPU Prices and Cryptocurrency Returns

We look at the association between the price of a cryptocurrency and the secondary market prices of the hardware used to mine it. We find the prices of the most efficient Graphical Processing Units (GPUs) for Ethereum mining are significantly positively correlated with the daily price returns to that cryptocurrency.