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Business and Economics > Investments: Stocks

You are looking at 1 - 10 of 60 items for :

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Cover IMF Staff Country Reports
Suriname: Technical Assistance Report on Government Finance Statistics Mission (April 19-May 6, 2022)
International Monetary Fund. Statistics Dept.
This technical assistance (TA) mission on Government Finance Statistics was conducted during April 19– May 6, 2022. The main purpose of the mission was to review the progress made by the authorities in implementing previous TA recommendations and provide further support to improve fiscal data compilation and dissemination in line with international standards set out in the Government Finance Statistics Manual 2014.
Keywords:
IMF's Statistics Department; Suriname debt management office; staff team of the International Monetary Fund; debt data; World Bank staff; Government finance statistics; Stocks; External sector statistics; Data processing; Western Hemisphere
Cover IMF Working Papers
Greece's Investment Gap
Shiqing Hua
,
Ms. Marina Mendes Tavares
, and
Ms. Xin C Xu
Greece’s investment rate plunged following the Sovereign Debt Crisis (SDC) and remained one of the lowest in the world in 2019. This paper explores recent investment dynamics and compares them against estimated benchmarks. Our results suggest that Greece has been under-investing since the SDC, with private investment notably lagging behind. The estimated investment gap ranges from 1.6–8 percent of GDP in 2019. Structural impediments have constrained corporate investment, while business cycle and balance sheet developments have held back household investment. Structural reforms are recommended to remove bottlenecks to corporate investment, improve efficiency of public investment, and boost household investment.
Keywords:
Investment gap; capital stock; structural reforms; investment gap; estimating benchmark investment; household investment; investment rate; investment dynamics; Private investment; Stocks; Public investment spending; Income; Europe; Global
Cover IMF Working Papers
Determinants of and Prospects for Market Access in Frontier Economies
Luiza Antoun de Almeida
and
Ms. Diva Singh
In recent years, we have observed an increase in low-income countries’ (LICs) access to international capital markets, especially after the Global Financial Crisis (GFC). This paper investigates what factors—country-specific macroeconomic fundamentals and/or external variables—have contributed to the surge in external bond issuance by these LICs, which we refer to in our paper as ‘frontier economies’. Using data on public and publicly guaranteed (PPG) external bond issuance, outstanding PPG bond stock, as well as sovereign spreads, we employ panel data analysis to examine factors related to the increase in issuance by these economies as well as the reduction in their spreads over time. Our empirical study shows that both country-specific fundamentals (such as public debt, current account balance, level of reserves, quality of institutions) and external variables (such as US growth and the VIX index) play a role in explaining the increased amount of issuance and the decline in spreads of frontier economies’ sovereign bonds. The impact of some of these variables on issuance appears to reflect a country’s need to issue bonds for external financing (‘the supply side’ of bond issuance), while others appear to correlate more through their impact on investors’ appetite for a country’s debt (‘the demand side’). In addition, the impact of country-specific variables can also be affected by external factors such as global risk appetite. Our analysis of key factors that have contributed to increased market access for frontier economies over the past decade provides important information to gauge the prospects for their continued market access, and for other LICs to join this group by tapping international markets for the first time.
Keywords:
frontier economy; market access; PPG bond stock; PPG issuance; data on public and publicly guaranteed; Bonds; International capital markets; Public and publicly-guaranteed external debt; Emerging and frontier financial markets; Stocks; Global
Cover IMF Working Papers
Pricing Protest: The Response of Financial Markets to Social Unrest
Mr. Philip Barrett
,
Sophia Chen
,
Miss Mali Chivakul
, and
Ms. Deniz O Igan
Using a new daily index of social unrest, we provide systematic evidence on the negative impact of social unrest on stock market performance. An average social unrest episode in an typical country causes a 1.4 percentage point drop in cumulative abnormal returns over a two-week event window. This drop is more pronounced for events that last longer and for events that happen in emerging markets. Stronger institutions, particularly better governance and more democratic systems, mitigate the adverse impact of social unrest on stock market returns.
Keywords:
Social unrest; stock markets; abnormal returns; event study; institutions; cumulative abnormal returns; market model; stock index; income group; market liberalization reform; Stocks; Income; Global; Asia and Pacific
Cover IMF Working Papers
Investor Information and Bank Instability During the Euro Crisis
Silvia Iorgova
Outside of financial crises, investors have little incentive to produce private information on banks’ short-term liabilities held as information-insensitive safe assets. The same does not hold true during crises. We measure daily information production using data from credit default swap spreads during the global financial crisis and the subsequent European debt crisis. We study abnormal information production around major events and interventions during these crises and find that, on average, capital injections reduced abnormal information production while early European stress tests increased it. We also link information production to outcomes: high levels of information production predict bank balance sheet contraction and higher government expenditures to support financial institutions. In an addendum, we show information production on nonfinancials dramatically increased relative to financials at the height of the COVID-19 crisis, reflecting the nonfinancial nature of the initial shock.
Keywords:
information production; safe asset; WP; reference securities; information-production ratio; banking system; debt crisis; rate of change; reference security model; unsecured debt
Cover IMF Working Papers
Government Intervention and Bank Market Power: Lessons from the Global Financial Crisis for the COVID-19 Crisis
Ms. Deniz O Igan
,
Mr. Maria Soledad Martinez Peria
,
Mr. Nicola Pierri
, and
Mr. Andrea F Presbitero
The COVID-19 pandemic could result in large government interventions in the banking industry. To shed light on the possible consequences on market power, we rely on the experience of the global financial crisis and exploit granular data on government interventions in more than 800 banks across 27 countries between 2007 and 2017. For identification, we use a multivariate matching method. We find that intervened banks experience a significant decline in market power with respect to matched non-intervened banks. This effect is more pronounced for larger and longer interventions and is driven by a rise in costs—mostly because of higher loan impairment charges—which is not followed by a similar increase in prices.
Keywords:
Banks; Government intervention; Market power; Lerner index; WP; intervened bank; bank market power; TARP-recipient bank; intervention characteristic; A. measuring market power; Bank resolution; Loans; Global financial crisis of 2008-2009; Nonperforming loans; Global
Cover IMF Working Papers
Household Wealth and Resilience to Financial Shocks in Italy
Mr. Daniel Garcia-Macia
High household wealth is often cited as a key strength of the Italian economy. Both in absolute terms and relative to income, the Italian household sector is wealthier than most euro area peers. A sizable fraction of this wealth is held by the rich and upper middle classes. This paper documents the changes in the Italian household sector’s financial wealth over the past two decades, by constructing the matrix of bilateral financial sectoral exposures. Households became increasingly exposed to the financial sector, which in turn was exposed to the highly indebted real and government sectors. The paper then simulates different financial shocks to gauge the ability of the household sector to absorb losses. Simple illustrative calculations are presented for a fall in the value of government bonds as well as for bank bail-ins versus bailouts.
Keywords:
WP; bailout; bail-in; government bond; bond; financial linkages; flow of funds; balance sheet analysis; financial asset holding; sectoral financial asset exposure; flow-of-funds datum; bail-in case; non-financial corporates; MFI assets; equity impact; Stocks; Sovereign bonds; Income distribution; Creditor bail-in; Financial sector; Global
Cover IMF Working Papers
Determinants of U.S. Business Investment
Emanuel Kopp
U.S. business investment has taken a serious toll during the global financial crisis and also in the recovery phase investment did not pick up as expected. What is surprising is that the alleged investment slowdown happened at a time of record corporate profits and retained earnings, highly supportive financial conditions, improved sentiment, rising equity valuations, and strong labor markets—factors established in supporting business investment. Applying accelerator models and Bayesian Model Averaging, this paper discusses the extent to which U.S. business investment has been unusual. Results suggest that cautious expectations of future aggregate demand growth explain most of the weakness in investment, and that the oil and gas sector accounts for a considerable portion of the investment slump. Consequently, the behavior of U.S. business investment in recent years has not been unusual once these factors are taken into account. Also, there is very little evidence for uncertainty holding back investment, or that firms’ financial measures "crowded out" capital expenditure.
Keywords:
WP; business investment; firm; investment growth; private fixed investment; accelerator models; Bayesian Model Averaging; investment gap; growth outcome; accelerator model; investment activity; equipment investment; consumption deflator; Private investment; Oil prices; Stocks; Bank credit; Global financial crisis of 2008-2009; Global
Cover IMF Working Papers
Interconnectedness of Global Systemically-Important Banks and Insurers
Sheheryar Malik
and
Ms. TengTeng Xu
Interconnectedness among global systemically important banks (GSIBs) and global systemically important insurers (GSIIs) has important financial stability implications. This paper examines connectedness among United States, European and Asian GSIBs and GSIIs, using publicly-available daily equity returns and intra-day volatility data from October 2007 to August 2016. Results reveal strong regional clusters of return and volatility connectedness amongst GSIBs and GSIIs. Compared to Asia, selected GSIBs and GSIIs headquartered in the United States and Europe appear to be main sources of market-based connectedness. Total system connectedness—i.e., among all GSIBs and GSIIs—tends to rise during financial stress, which is corroborated by a balance sheet oriented systemic risk measure. Lastly, the paper demonstrates significant influence of economic policy uncertainty and U.S. long-term interest rates on total connectedness among systemically important institutions, and the important role of bank profitability and asset quality in driving bank-specific return connectedness.
Keywords:
WP; economic policy; balance sheet; Global systemically important banks and insurers; connectedness; volatility; equity prices; vector autoregression; return connectedness; GSIBs from the United States; system of GSIBs; bank characteristic; equity return; bank subsidiary; BNP Paribas; book value; profitable GSIBs; dynamic return connectedness; connectedness in the system; return connectedness of United States; Global systemically important banks; Global systemically important insurers; Stocks; Insurance companies; Global; Europe; Asia and Pacific
Cover IMF Working Papers
The Financing of Ideas and the Great Deviation
Mr. Daniel Garcia-Macia
Why did the Great Recession lead to such a slow recovery? I build a model where heterogeneous firms invest in physical and intangible capital, and can default on their debt. In case of default, intangible assets are harder to seize by creditors. Hence, intangible capital faces higher financing costs. This differential is exacerbated in a financial crisis, when default is more likely and aggregate risk bears a higher premium. The resulting fall in intangible investment amplifies the crisis, and gradual intangible spillovers to other firms contribute to its persistence. Using panel data on Spanish manufacturing firms, I estimate the model matching firm-level moments regarding intangibles and financing. The model captures the extent and components of the Great Recession in Spanish manufacturing, whereas a standard model without endogenous intangible investment would miss more than half of the GDP fall. A policy of transfers conditional on firm age could speed up the recovery, as young firms tend to be more financially constrained, particularly regarding intangible investment. Conditioning transfers on firm size or subsidizing credit (as in current E.U. policy) appears to be less effective.
Keywords:
WP; physical capital; repayment rate; financial crises; intangible capital; heterogeneous firms; endogenous default; firm life-cycle pattern; life-cycle growth; intangible investment; firm owner; exit rate; firms decision; firm financing; constrained firm; firm exit; firm level; exited firm; Depreciation; Stocks; Global financial crisis of 2008-2009; Global; Europe