Analysis of diversification benefits of investing in the emerging gulf equity markets
The emerging stock markets of the Gulf region where equity returns are positively correlated with oil prices potentially provide valuable hedge against oil price risk faced by investors from the oil consuming economies. Low correlations of Gulf equity market returns with the U.S. stocks provide significant portfolio diversification benefits to investors both from developed and emerging markets. Analysis of the S&P 500 index along with Gulf equity markets indicates substantial benefits to investors in combining securities from these markets in enhancing return and reducing portfolio risk. Using the monthly return data Markowitz (1959) mean-variance efficient asset allocation suggest 20% to 30% investment in the Gulf equity markets. The stability of the Gulf region currencies compared to other emerging markets, where local currency returns can easily be wiped out by currency depreciations, is an added attraction for investing in Gulf equities.
Publication Name: Managerial Finance
A comparative analysis of information search and evaluation behavior of professional and non-professional financial analysts
The information searching and analytic behavior of professional and non-professional financial analysts are examined. A process tracing technique was used for collecting data from analysts' work after the initial public offering of an equity security. Professionals and non-professionals seem to process and manage information differently. Strategy selection, weights attached to data and final conclusions were handled differently by each group. Professionals did not follow the rules used in fundamental analysis texts.
Publication Name: Accounting, Organizations and Society
Leverage, resource allocation and growth
Companies have optimum debt equity ratios due to market distortions, such as taxes and agency costs. The study shows how a equilibrium model set up by Jones in 1965 can account for company changes in capital resources in the market economy, company leverage changes and the affect capital structure changes have on company values. Market imperfection, resource allocation and their effects on securities and firm integration are also considered.
Publication Name: Journal of Business Finance and Accounting
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