Technical analysis, even if deliberated by some as purely conjecture, is still generally acknowledged as additional information to main brokerage companies. There are existent two reasons for the achievement of technical analysis and why its success is still debated: (1) stock return predictability stems from efficient markets that can be analysed by time-varying equilibrium returns, and (2) stock return predictability forms from prices wandering apart from their fundamental valuations. Fundamentally, both explanations show some kind of overall market inefficiency where investors are capable of exploiting. Therefore, technical analysis derived its importance from its ability to train investors to take investment decision based on historical trends of securities prices. To help find answers to the issues raised and to structure the study, the following general research question is set: is it possible for technical analysis to achieve abnormal returns in an Emerging Capital Markets (ECM's) country, more specifically, the Egyptian Stock Exchange? If yes, hence it could be possibly used to help individual investors to take effective investment decision. By means of theoretical and empirical investigation, this study provides significant evidences that technical analysis achieved abnormal returns in inefficiency periods. This study suggests that simple trading rules, more specifically; the simple moving average beat the standard buy-and-hold strategy for the Egyptian stock exchange.
In this study, we aim to introduce behavior of unsystemayic risk and its forecasting ability in prediction of future return in Egyptian Stock Exchange (ESE) as an Emerging Capital market (ECM), over the period of 2006 to 2015. We measure equally weighted unsystemayic volatility by following the Campbell's (2001) Indirect Method, by considering market size and weekly basis. Our results reveal that unsystemayic risk is the biggest component of total volatility and show no trend, although market volatility has a slow decreasing trend in this period. We also find that small size stocks have slightly higher volatility than the big size stocks but both portfolios have similar idiosyncratic risk behavior. Finally, our analyses about the predictive ability of various measures of unsystematic risk provide evidence that unsystematic risk volatility is not a significant predictor for future return in ESE.
Disclosure and Transparency in the stock market is an important requirement for the proper functioning of market forces. Inadequate information may lead to responses that do not reflect the principles of economic rationality, thus threatening economic growth and causing economic inefficiency. In this context, the study addresses the importance and role of disclosure and transparency in the Egyptian Stock market, relying on an inductive and statistical approach in addition to questionnaires that elicit firm views regarding transparency and disclosure in the stock market. Transparency and disclosure are measured for a representative sample of Egyptian companies in accordance with relevant legislations; the sample involved all firms comprising EGX30, which includes the 30 most active firms in the Egyptian Stock market.
The main purpose of this paper is to examine the various factors that attract Foreign Direct Investment (FDI) in developing countries, in order to find answers to the following question: Does foreign direct Investment really matters in developing countries? The study investigates the relationship between FDI and the economic growth in Egypt as a good indicator for developing countries, covering the period 1961-2012. Results from the analysis suggest that FDI is explained by some economic determinants but has non-significant effect on GDP growth. The study also investigates FDI Behavior in Egypt and explaining this behavior and the impact of FDI on activating the Egyptian stock exchange between 1996 -2012.
The dividend decision is taken after careful consideration of a number of factors, such as legal and financial. This is because it is impossible to develop a dividend policy set that applies to all companies. The decision about dividends differs from company to company in the light of company considerations. The dividend is partly dependent on the current earning of the company and partly on the dividend from the previous year. Therefore, the main changes in profit with the existing rate of dividends were the main determinants of corporate dividend policy. The research showed that the profitability aspects and their indicators for each of the return on equity return on asset, and earning per share without dividend yield, have the greatest impact on share price performance, followed by the financial risks aspect of financial leverage without gains variation which comes in the second rank. Then, the factor of size, investment opportunity for each of investment opportunity and net profit standard deviation without assets volume comes in the third place and finally, the liquidity and signals factor represented in the cash ratio without signals index. While the profitability aspects and its indicators for each of the return on equity, return on asset, earning per share without dividend yield are the most effective on pay-out ratio (first rank), followed by financial risks aspect and gains variation coefficient without financial leverage in the second rank, then the liquidity factor of index without the signals in the third place and finally size and investment opportunity factor for each of investment opportunity and assets volume without net profit standard deviation.
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