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Business and Economics > Investments: Stocks

You are looking at 1 - 10 of 38 items for :

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Cover IMF Working Papers
Measurement and Use of Cash by Half the World’s Population
Mr. Tanai Khiaonarong
and
David Humphrey
The use of cash for payments is not well measured. We view the value of cash withdrawn from ATMs, or as a share of all payments, as a more accurate and timely measure of cash use compared to the standard measure of currency in circulation, or as a ratio to GDP. These two measures are compared for 14 advanced and emerging market economies. When aggregated, the trend in cash use for payments is currently falling for half the world’s population. Such a measure can help inform policy decisions regarding CBDC and regulatory decisions concerning access to and use of cash.
Keywords:
Cash; payments; access to cash; central bank digital currency; cash use; ATM cash; aggregate Currency value; value of cash; use of cash; Currencies; Monetary base; Purchasing power parity; Stocks; Payment systems
Cover IMF Working Papers
Drivers of Cross-Border Banking in Sub-Saharan Africa
Mr. Paul Henri Mathieu
,
Mr. Marco Pani
,
Shiyuan Chen
, and
Mr. Rodolfo Maino
Using data collected from pan-African banks’ (PABs), balance sheets and other sources (Orbis, Fitch), this study identifies some key patterns of cross-border investment in bank subsidiaries by key banking groups in sub-Saharan Africa (SSA) and discusses some of the determinants of this investment. Using a gravity model relating the annual value of a banking group’s investment in the net equity of its subsidiaries to a set of explanatory variables, the analysis finds that cross-border banking is in part driven by a search for yield, diversification, and expansion for strategic reasons.
Keywords:
WP; break; center; exchange rate; Cross-border banking flows; Bank leverage; Global banks; Group profitability; banking group variable; Group size; vis-à-vis intra-group; net equity; host country pair; bank subsidiary; pan-African banking groups; Exchange rates; Cross-border banking; Inflation; Stocks; Gravity models; Africa; Sub-Saharan Africa; Global; West Africa; North Africa
Cover IMF Working Papers
Understanding the Macro-Financial Effects of Household Debt: A Global Perspective
Mr. Adrian Alter
,
Alan Xiaochen Feng
, and
Nico Valckx
We confirm the negative relationship between household debt and future GDP growth documented in Mian, Sufi, and Verner (2017) for a wider set of countries over the period 1950–2016. Three mutually reinforcing mechanisms help explain this relationship. First, debt overhang impairs household consumption when negative shocks hit. Second, increases in household debt heighten the probability of future banking crises, which significantly disrupts financial intermediation. Third, crash risk may be systematically neglected due to investors’ overoptimistic expectations associated with household debt booms. In addition, several institutional factors such as flexible exchange rates, higher financial development and inclusion are found to mitigate this impact. Finally, the tradeoff between financial inclusion and stability nuances downside risks to growth.
Keywords:
WP; debt ratio; Household debt; financial crises; neglected crash risk; leverage; macro-financial stability; standard deviation; bank stock; negative correlation; subprime crisis; financial leverage; Exchange rate arrangements; Stocks; Consumption; Commercial banks; Consumer credit; Global
Cover IMF Working Papers
Spillovers from Japan’s Unconventional Monetary Policy to Emerging Asia: a Global VAR approach
Mr. Giovanni Ganelli
and
Nour Tawk
We use a Global VAR model to study spillovers from the Bank of Japan’s quantitative and qualitative easing (QQE) on emerging Asia.1 Our main result is that, despite an appreciation of their currencies vis-à-vis the yen, the impact on emerging Asia’s GDP tended to be positive and significant. Our results suggest that the positive effect of QQE on expectations, by improving confidence, more than offset any negative exchange rate spillover due to expenditure switching from domestic demand to Japanese goods. They also suggest that spillovers from QQE might have worked mainly through the impact of expectations and improved confidence, captured by increases in equity prices, rather than through balance sheet adjustments which might have been captured by movements in the monetary base.
Keywords:
WP; price; Japan; interest rate; Japan's QQE; net export; QQE; Spillovers; Emerging Asia; equity price; Japan MSCI index; currency appreciation; Japan's price competitiveness; equity price shock; Japan's quantitative easing program; QQE in Japan; stock price effect; price boom; equity price increase; Inflation; Stocks; Monetary base; Unconventional monetary policies; Exchange rates; Asia and Pacific; Global; Europe
Cover IMF Working Papers
Official Financial Flows, Capital Mobility, and Global Imbalances
Mr. Tamim Bayoumi
,
Mr. Joseph E. Gagnon
, and
Christian Saborowski
We use a cross-country panel framework to analyze the effect of net official flows (chiefly foreign exchange intervention) on current accounts. We find that net official flows have a large but plausible effect on current account balances. The estimated effects are larger with instrumental variables (42 cents to the dollar on average compared to 24 without instruments), reflecting a possible downward bias in regressions without instruments owing to an endogenous response of net official flows to private financial flows. We consistently find larger impacts of net official flows when international capital flows are restricted and smaller impacts when capital is highly mobile. A further result is that there is an important positive effect of lagged net official flows on current accounts that we believe operates through the portfolio balance channel.
Keywords:
WP; capital mobility; official flow; BOP fin.; financial market; reserve accumulation; intervention; stock effect; BOP fin; asset stock; current account adjustment; Current account; Stocks; Current account balance; Exchange rates; Current account deficits; Global
Cover IMF Working Papers
The Role of Country Concentration in the International Portfolio Investment Positions for the European Union Members
Iuliia Brushko
and
Ms. Yuko Hashimoto
This paper examines the international portfolio flows of European Union. Our analysis includes three dimensions: (1) the level of countries portfolio investment concentration (those who invest evenly among counterparties versus those who invest more heavily in some counterparties); (2) the share of total portfolio investment assets invested at the destination; and (3) pre- and during the crisis periods. We find that portfolio investment positions respond differently to macroeconomic variables depending on the level of investment concentration and the share of invested assets. In particular, variables of health of the financial system become important determinants for portfolio investment during the crisis.
Keywords:
WP; stock index; GDP; interest rate; stock index growth; International Portfolio; Portfolio Flows; Portfolio Concentration; portfolio investment; concentration index; investment position; GDP ratio; Stocks; Long term interest rates; Short term interest rates; Unemployment rate; Real effective exchange rates; Global
Cover IMF Working Papers
Safe-Haven Korea? - Spillover Effects from UMPs
Mr. Jack J Ree
and
Seoeun Choi
We examine how Korea’s capital flows and trade have been affected by the quantitative easing (QE) of the United States and the quantitative and qualitative easing (QQME) of Japan. Korea is an intriguing case due to its borderline position between advanced and emerging market country groups, and the common perception that Korea competes fiercely with Japan in the world market for trade. We find that QE had little direct impact on capital flows to Korea, and tapering is unlikely to cause capital outflows from it owing to partial safe-haven behavior of capital flows to Korea. We also find that the exchange rate spillover from QQME to Korea has been limited both on trade and capital flow fronts.
Keywords:
WP; value chain; capital flow; yield curve; Unconventional monetary policy; spillover; trade; Korea's gain Japan's loss; safe-haven Korea; market share gain; Foreign Value-Added; QE exit; Korea's export; world market share; Capital flows; Bonds; Unconventional monetary policies; Exchange rates; Exports; Global; Asia and Pacific
Cover IMF Working Papers
The Evolution of Asian Financial Linkages: Key Determinants and the Role of Policy
Mr. Selim A Elekdag
,
Mr. Phurichai Rungcharoenkitkul
, and
Mr. Yiqun Wu
This paper examines how Asian financial linkages with systemic economies have changed over time. After developing a factor model, it estimates Asian financial sensitivities to systemic economies, and then seeks to uncover their key determinants, which include trade and financial linkages, as well as policies. In line with Asia’s growing role in the global economy—including through deeper financial integration—regional financial markets have become more sensitive to systemic economies. Asian financial sensitivities to systemic economies exhibit cyclical fluctuations, and reached historically high levels during the latest global financial crisis of 2008–09. While macroeconomic policy frameworks have helped Asian economies cope well with market turbulence, they cannot completely insulate Asian financial markets against major global financial shocks. 
Keywords:
WP; financial linkages; Asia; beta; global financial crisis; systemic economy; economy c; GDP ×; risk premium; market portfolio return; financial market spillover; Stock markets; Exchange rate arrangements; Foreign direct investment; Stocks; Return on investment; Global; Asia and Pacific
Cover IMF Working Papers
The External Impact of China'S Exchange Rate Policy: Evidence From Firm Level Data
Mr. Barry J. Eichengreen
and
Mr. Hui Tong
We examine the impact of renminbi revaluation on foreign firm valuations, considering two surprise announcements of changes in China’s exchange rate policy in 2005 and 2010 and employing data on some 6,000 firms in 44 economies. Stock returns rise with renminbi revaluation expectations. This reaction appears to reflect a combination of improvements in general market sentiment and specific trade effects. Expected renminbi appreciation has a positive effect on firms exporting to China but a negative impact on those providing inputs for the country’s processing exports. Stock prices rise for firms competing with China in their home market but fall for firms importing Chinese products with large imported-input content. There is also some evidence that expected renminbi appreciation reduces the valuation of financially-constrained firms, presumably because appreciation implies reduced Chinese purchases of foreign securities. The results carry over when we consider ten instances of market-perceived changes in prospective Chinese currency policy.
Keywords:
WP; firm; China; exports to China; exchange rate; external impact; stock market; China's processing; renminbi appreciation; processing export; imports from China; market beta; Exports; Imports; Currencies; Stocks; Exchange rates; Global
Cover Departmental Papers
Is South Africa Receiving More than Its Fair Share of Portfolio Flows?
Mr. Gavin Gray
and
Mr. Tamon Asonuma
This paper develops an empirical model of the drivers of portfolio flows, and concludes that South Africa has indeed received greater bond flows than can be explained by macroeconomic fundamentals. Bond flows in the four quarters through 2010:Q3 not only exceeded the average over the past 10 years, but also deviated significantly from the amount implied by explanatory variables, including the fiscal balance, the difference between the country's and world GDP growth rates and a summary indicator of external vulnerabilities. Some capital market factors specific to South Africa irrelevant to macro variables, such as size of capital market, which are reflected in remarkably high fixed effect compared to other emerging countries, have contributed to attracting equity flow.
Keywords:
DPPP; DP; growth rate; flow share; GDP; world GDP; flow-to-GDP ratio; volatility series; index number; GDP dispersion; bond share; flows-to-GDP ratio; Stocks; Bonds; Exchange rates; Emerging and frontier financial markets; Inflation; Africa; Global