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Business and Economics > Investments: Stocks

You are looking at 1 - 2 of 2 items for :

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Cover IMF Working Papers
Regional Financial Integration in the Caribbean: Evidence From Financial and Macroeconomic Data
Goohoon Kwon
and
Mr. Raphael A Espinoza
This paper assesses the extent of regional financial integration in the Caribbean Community (CARICOM) by analyzing equity prices in the region and rigidity of external financing constraints. The results are presented in a cross-regional perspective. The Caribbean stock markets are not as well integrated as one would expect from the extent of cross-listing and importance of regional banking groups: price differentials of cross-listed stocks reach an average of 5 percent. Auto-Regressive models suggest that these price differentials are only slowly arbitraged away, with half-lives exceeding 7 worked days, even when looking only at large arbitrage opportunities (using a Threshold Auto-Regressive model). A speculative methodology using macroeconomic data seems to confirm these findings. A strong mean reversion of the current account (respectively regional trade imbalances) is interpreted, following Obstfeld and Taylor (2004), as a lack of ways to finance current account deficits, i.e. a lack of global (respectively regional) financial integration. The region appears to be much less integrated than the EU15 or the ASEAN+3 groups, although it fares well compared to other LDCs.
Keywords:
WP; market capitalization; trade balance; exchange rate; CARICOM; cross-market premium; cross-listed stock; Threshold Auto-Regressive model; current account dynamics; CARICOM group; CARICOM community; CARICOM firm; price convergence; balance of payments; liquid asset; Financial integration; Stock markets; Stocks; Current account; Regional integration; Caribbean; Global
Cover IMF Working Papers
Can Regional Cross-listings Accelerate Stock Market Development? Empirical Evidence from Sub-Saharan Africa
International Monetary Fund
This study analyzes the impact of regional cross-listing of stocks on the depth of the stock markets in sub-Saharan Africa (SSA). It analyzes data from 1990 to 2007 for a panel of 13 stock markets in SSA countries, only some of which have regional cross-listings. Using event study methodology, the paper finds significant positive effects in measures of stock market depth around regional cross-listing events. Overall, growth in the regional crosslisting of stocks facilitates stock market deepening, and the stock markets of countries with regional cross-listings perform better than those without. The study thus suggests that SSA countries can benefit from putting in place the necessary conditions for promoting regional cross-listings and thereby deepening their stock markets. These include sound legal and regulatory frameworks, macroeconomic and political stability, harmonization of listing rules, accounting laws and disclosure requirements across the region, and strong money markets.
Keywords:
WP; firm; stock; listed firm; GDP