Stock market recovery from the 2008 financial crisis: The differences across Europe

Ivanov, Ivan T.; Kabaivanov, Stanimir; Bogdanova, Boryana

doi:10.1016/j.ribaf.2016.01.006

Cited by 12 publications

(12 citation statements)

References 43 publications

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“…First, we evaluate the stock price-exchange rate nexus from the trade balance approach (TBA). In essence, we attempt to validate/refute the TBA approach by partitioning the estimation period into pre and post global financial crisis in order to evaluate the significance or otherwise of the crisis in the stock price-exchange rate nexus (in line with Neaime (2012); Tsai (2015); Ivanov et al (2016)). Second, we assess the role of monetary policy (interest rate) in the stock price-exchange rate nexus.…”

Section: Discussion Of Resultsmentioning

confidence: 99%

Monetary Policy and the Stock Price - Exchange Rate Nexus: New Insights from Influential African Economies

Alimi

Olaniran

2019

Asian Development Policy Review

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The study examined the role of monetary policy in the stock price-exchange rate nexus in the three major financial markets in Africa between 2005 and 2017. Essentially, the study attempted to validate the trade balance approach (TBA) for the African stock markets and conducted analyses in the periods before and after the global financial crisis (GFC). The study focused on Nigeria, South Africa and Egypt and utilized data on nominal exchange rate, stock price, nominal interest rate and consumer price index sourced from the International Financial Statistics of the International Monetary Fund. The trend analysis revealed that stock price and exchange rate in South Africa moved in the same direction while the variables moved in different directions in Nigeria and Egypt. With the aid of the panel autoregressive distributed lag technique (PARDL), the study showed negative and significant relationship between exchange rate and stock price, validating the TBA for the full sample and the post GFC periods while the theory cannot be substantiated for the pre-GFC period. Contribution/ Originality: This study contributes to the existing literature by examining the role of monetary policy in the stock price-exchange rate nexus in Africa's three largest economies. Using the Panel Autoregressive Distributed Lag Model, the study validates the TBA for the full sample in African stock markets.

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Section: Discussion Of Resultsmentioning

confidence: 99%

Monetary Policy and the Stock Price - Exchange Rate Nexus: New Insights from Influential African Economies

Alimi

Olaniran

2019

Asian Development Policy Review

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“…Economic expectative suggests that, when two economies are well integrated through trade, investment, and financial relationships [ 15 ], a crisis in one economy is likely to quickly spread to the other one. This because exposure to financial globalization can lead to a higher vulnerability to a financial crisis, associating them with the concept of contagion effect.…”

Section: Introductionmentioning

confidence: 99%

Breakpoint Analysis for the COVID-19 Pandemic and Its Effect on the Stock Markets

Chahuán-Jiménez

Rubilar

Fuente‐Mella

et al. 2021

Entropy

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In this research, statistical models are formulated to study the effect of the health crisis arising from COVID-19 in global markets. Breakpoints in the price series of stock indexes are considered. Such indexes are used as an approximation of the stock markets in different countries, taking into account that they are indicative of these markets because of their composition. The main results obtained in this investigation highlight that countries with better institutional and economic conditions are less affected by the pandemic. In addition, the effect of the health index in the models is associated with their non-significant parameters. This is due to that the health index used in the modeling would not determine the different capacities of the countries analyzed to respond efficiently to the pandemic effect. Therefore, the contagion is the preponderant factor when analyzing the structural breakdown that occurred in the world economy.

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“…For practical use (as a source of corporate finance) and valuation purposes (as a special type of asset), the typical financial character of preferred stocks is debatable. Another consideration is our interest in the European environment because of the development of European financial markets in recent years (Ivanov et al, 2016) and the excess in liquidity (Beaupain & Durré, 2016) in Europe. This implies that preferred stocks may enjoy the attention of investors and/or companies and thus, it makes sense to analyse the current state of the preferred stock market in Europe.…”

Section: Introductionmentioning

confidence: 99%

The Difference Between Preferred & Common Stocks in Europe from the Market Perspective

Brabenec¹,

Poborský²,

Saßmannshausen³

2020

JOC

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Companies listed on the stock market must devote a great deal of attention to their market position. They must increase their competitive advantage in the undeniably key process of the issuance of stocks. As the issuance of preferred stocks has increased after the last crisis and in the current period of low interest rates in Europe, they are becoming more favoured investment instruments, we decided to analyse the real properties of preferred stocks in Europe in order to increase the efficiency of joint-stock companies. Using a dataset comprising all companies having both common and preferred stocks issued and traded on European markets between 2009- 2016, we determined the relationship of risk (measured by beta coefficients) and price volatility among common and preferred stocks and bonds in Europe. Our findings show beta coefficients of preferred stocks as systematically lower than beta coefficients of common stocks. Considering a difference of up to 10% as negligible, however, preferred stocks showed a similar or higher beta coefficient than corresponding common stocks of the same company in 53% of cases, whereas for 33% of cases, the difference is only ±10%. Coefficients of variation in prices showed a similar relationship, with only a negligible portion of preferred stocks bearing fixed (stable) dividends. This result implies that currently traded preferred stocks in Europe in fact do not possess such characteristics they are typically said to have, and in many cases they incur as comparable a risk as do common stocks. This essential information should help to increase the efficiency and competitiveness of joint-stock companies.

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Stock market recovery from the 2008 financial crisis: The differences across Europe

Cited by 12 publications

References 43 publications

Monetary Policy and the Stock Price - Exchange Rate Nexus: New Insights from Influential African Economies

Monetary Policy and the Stock Price - Exchange Rate Nexus: New Insights from Influential African Economies

Breakpoint Analysis for the COVID-19 Pandemic and Its Effect on the Stock Markets

The Difference Between Preferred & Common Stocks in Europe from the Market Perspective

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