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1 – 10 of 125The budget is built on unduly optimistic assumptions. Meanwhile, the Central Bank of Nigeria (CBN) is seeking loans to help clear foreign exchange (forex) backlogs while…
Numerous domestic and external shocks have rocked the macroeconomic environment in recent years, aggravating high inflation and chronic foreign exchange (forex) shortages…
Such smuggling represents not only an opportunity for personal enrichment, but reflects Zimbabwe’s pressing need for foreign exchange (forex) and inability to access conventional…
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DOI: 10.1108/OXAN-DB279001
ISSN: 2633-304X
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Topical
Gargi Sanati and Anup Kumar Bhandari
In the backdrop of an increase in market-based banking activities, this paper aims to study operational efficiency of Indian banking sector during 2009–2010 through 2017–2018…
Abstract
Purpose
In the backdrop of an increase in market-based banking activities, this paper aims to study operational efficiency of Indian banking sector during 2009–2010 through 2017–2018 considering Capital Gain and Gain from Forex Market (as desirable outputs) and Slippage (as undesirable byproducts) simultaneously, along with Advances – a desirable output considered in the traditional banking performance assessment literature. This enables to have an assessment of performance (as captured by the measured efficiency scores) of Indian Banks following an alternative viewpoint about the banking activities. The authors also explain such efficiency scores in terms of bank-specific factors, banking industry competition scenario and interest rate channel.
Design/methodology/approach
Using data envelopment analysis (DEA) method, the authors estimate six alternatives but interlinked operational efficiency scores (TES) of the Indian domestic commercial banks. In the second stage, they explain such TES in terms of bank-specific factors, banking industry competition scenario and interest rate channel.
Findings
The authors observe that the private sector banks as a group outperform those under public ownership. Moreover, although the private sector banks could maintain somewhat consistency in their operational efficiency performance over the sample period, public sector banks clearly show a declining tendency. The second stage econometric estimation results show that the priority sector lending has a negative effect on efficiency. Interestingly, the authors get varying results for the relationship between maturity and efficiency score depending on banks’ strategies on stressed assets management. Furthermore, the analyses result that banks are not so efficient in managing relatively larger-volume loans. It is also observed that banks’ efficiency positively depends on the Credit-to-Deposit (CD) ratio. It is found that the overall operational efficiency of the banks to manage their credit risk portfolio improves with a reduction in the lending rate (LR). However, the interaction of lending activities and capital market shows that with the increase in LR, corporate borrowers may switch to capital market to explore for desired funds, which may induce the banking sector to investment in capital markets and create a positive market sentiment.
Originality/value
Literature, although scanty, is there dealing stressed assets of a bank as some undesirable byproducts of its operational and business activities. However, such literature mostly done within the traditional framework of banking business activities and modern market-based business activities are almost absent in the literature. The authors have done it in the present study.
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Robert Owusu Boakye, Lord Mensah, Sanghoon Kang and Kofi Osei
The study measures the total systemic risks and connectedness across commodities, stocks, exchange rates and bond markets in Africa during the Covid-19 pandemic.
Abstract
Purpose
The study measures the total systemic risks and connectedness across commodities, stocks, exchange rates and bond markets in Africa during the Covid-19 pandemic.
Design/methodology/approach
The study uses the Diebold-Yilmaz spillover and connectedness measures in a generalized VAR framework. The author calculates the net transmitters or receivers of shocks between two assets and visualizes their strength using a network analysis tool.
Findings
The study found low systemic risks across all assets and countries. However, we found higher systemic risks in the forex market than in the stock and bond markets, and in South Africa than in other countries. The dynamic analysis found time-varying connectedness return shocks, which increased during the peak periods of the first and second waves of the pandemic. We found both gold and oil as net receivers of shocks. Overall, over half of all assets were net receivers, and others were net transmitters of return shocks. The network connectedness plot shows high net pairwise connectedness from Morocco to South Africa stock market.
Practical implications
The study has implications for policymakers to develop the capacities of local investors and markets to limit portfolio outflows during a crisis.
Originality/value
Previous studies have analyzed spillovers across asset classes in a single country or a single asset across countries. This paper contributes to the literature on network connectedness across assets and countries.
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Ume Kalsoom, Sheheryar Javed, Rizwan Ullah Khan and Arif Maqsood
The authors examine the impact of coronavirus disease 2019 (COVID-19) pandemic on the stock market, forex market and gold market of Pakistan.
Abstract
Purpose
The authors examine the impact of coronavirus disease 2019 (COVID-19) pandemic on the stock market, forex market and gold market of Pakistan.
Design/methodology/approach
By using the daily data of COVID-19 confirmed cases, stock index, foreign currency rates and gold prices for the period 10 March 2020 to 16 October 2020, the authors explore that the stock index negatively responds to the corona pandemic.
Findings
Additionally, the authors observe the price hikes in gold and foreign currency corresponding to the number of COVID-19 positive cases.
Practical implications
The study analysis unveils that the stock market adversely responds to a pandemic, whereas, forex and gold markets serve as a safe haven for investors at the time of financial distress.
Originality/value
This study complements the literature and provides empirical evidence of the stock market, the gold market and foreign currency market, in the perspective of Pakistan.
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The study tests the hypothesis that following the arrival of news in the forex market, the trader/dealers demonstrate two kinds of biases which makes markets volatile: “Recurrence…
Abstract
Purpose
The study tests the hypothesis that following the arrival of news in the forex market, the trader/dealers demonstrate two kinds of biases which makes markets volatile: “Recurrence bias,” the belief that news which formerly led to volatility, will again generate volatility (i.e. volatility is recurring), and “Volatility Perception Bias,” the belief that increased volatility following the arrival of a news would persist.
Design/methodology/approach
The author uses a preliminary survey and three simulated trading game experiments involving professional foreign exchange dealers to understand these heuristic-led biases and the biases' impact on market volatility.
Findings
The paper finds evidence supporting the presence of both “Recurrence Bias” and “Volatility Perception Bias” and a statistically significant, positive impact of participant biases' on market heterogeneity.
Originality/value
The paper makes two important contributions: first, the use of simulated trading game experiment involving professional dealers and second, the incorporation of dealers' biases and heuristics in understanding forex volatility.
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These aim for tighter CBN control over the parallel market. The CBN is also seeking to stabilise the currency through bond issuances, cryptocurrency crackdowns and other schemes.
Details
DOI: 10.1108/OXAN-DB286045
ISSN: 2633-304X
Keywords
Geographic
Topical
Vaidehi Pandurugan and Badriya Nasser Said Al Shammakhi
The current research takes a closer look at the investment intention of Generation Z and its relation to investing in a speculative market. The study applies the theory of planned…
Abstract
Purpose
The current research takes a closer look at the investment intention of Generation Z and its relation to investing in a speculative market. The study applies the theory of planned behaviour (TPB) to understand the dominant factors leading to Generation Z investment decisions in speculative markets. The main objective is to identify whether these decisions are learnt decisions or herd behaviours.
Design/methodology/approach
Structural equation modelling is used to evaluate the research model, and examine the mediation effect of financial literacy using bootstrapping in AMOS software. Information was gathered from 271 students studying at the University of Technology and Applied Sciences. The questionnaire used for the survey was adapted from previous related studies examining the TPB.
Findings
The findings show financial literacy and behavioural outcome (attitude) are key components associated with investment intention. Motivation to comply (subjective norm) affects the intention to invest if mediated by financial literacy. The subjective norm has no bearing on the intention to invest in a speculative market. This implies social peers have no bearing on their intention to invest unless mediated by financial literacy.
Research limitations/implications
The main limitation of the study is that the group from which the sample is drawn consists of all students at a state-funded university who receive stipends. This limits the applicability of related findings. Furthermore, the variables have dynamic properties, which implies their impacts may vary over time.
Practical implications
Generation Z comprises a large number of small investors who can make a significant difference to the overall economic trends of the country. The digital world, which is time- and space-infinite, is shaping the next generation. It is only possible to reach and sway their opinions by conducting extensive behavioural science research.
Social implications
Academic institutions ought to be viewed as a resource for conducting additional in-depth research on a variety of subjects to assist and shape the current generation for a better future.
Originality/value
Although the TPB has been used by many researchers to explore the behavioural intention of Generation Z, very few have used financial literacy as a perceived behaviour control to study its direct and indirect effects on behaviour intention.
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Finance Minister Wale Edun on October 23 announced that a major inflow of USD10bn was expected in the coming weeks to ease liquidity in the foreign exchange market. The…