The aim of this paper is to explore the possible relationship between dividend announcement and stock price reactions upon announcements by the quoted firms in London Stock Exchange (LSE). For the sake of this study, an event-study methodology was employed to calculate any abnormal or excess returns around dividend announcements for 100 firms listed in the LSE over a period of 5 years (2010-2014). The result of the event study indicates that dividend announcements do not convey information to investors (Khan, 2011). The researcher concludes by saying that dividend announcements do not convey any information to share prices, which is in consonance with the M-M Dividend Irrelevance Theory.
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Impact of Risk Tolerance and Demographic Factors on Financial Investment Decision
Risk tolerance is popularly used in the personal financial planning industry to understand an investor’s attitude towards risk. In the twenty-first century, it is very important for the various investment firms, fund managers, financial planners to understand financial investment decisions of an investor for developing a strategy for the sale of their investment products in market. However, financial decisions of an individual not only depend on financial risk-tolerance level, but also upon different demographic factors. Thus, this study is undertaken to develop a model that helps in understanding impact of risk tolerance and demographic factors jointly on investment decision, especially, a decision related to level of investment. Also, investor may be having higher risk tolerance for the calculative investment but may be having lover risk tolerance in speculative investment. So, based on extensive literature support, this research has tried to propose a model for understanding the impact of investment risk tolerance, capital risk tolerance, speculative risk tolerance, and six important demographic variables jointly on investment decision. Thus, this study would be helpful to investment firms in understanding impact of risk tolerances and demographic variables jointly on level of investment of investors, which can be used for designing a strategy or investment product to offer to the investors with different levels of financial risk tolerance and different demographic profiles.
An Econometric Analysis of Linkages between Macroeconomic Variables and Stock Markets: Evidence from Asian Emerging Markets
The purpose of this paper is to investigate impact of macroeconomic variables on stock markets of India and Indonesia. This paper also attempts to identify linkages between markets and macroeconomic variables. The rationale behind selecting these countries for the present study is MSCI emerging markets index of Asia, which comprises emerging economies with huge return potential for prospective investors. This study will help investors and researchers to understand dynamics of linkages between markets and macroeconomic variables. Augmented Dickey-Fuller (ADF) unit root test is used to assess the stationary of time series, Johansen test co-integration is applied to examine long-term integration among variables, Granger causality test is used to examine the causality relationship between macroeconomic variables and stock returns. The monthly data are taken for the study which ranges from July 1997 to July 2017. Currency exchange rates, interest rates, money supply, and inflation are the macroeconomic variables for the current study. Results revealed that there is one co-integrating equation of long-run equilibrium between the variables for both countries. Granger causality test reveals that there exists unidirectional and bidirectional relationship between the variables.
Conceptualising the Linkages between Financial Development, Human Development, and Income Inequality: Cross-Country Evidences
In the present era of finance capitalism, it is a great challenge for any country to strengthen its financial sector so as to realise the vision of financial inclusive society. Beside this major challenge, the government has to ensure the well-being of the society. Well-being of the society is not only indicated by the income level of an individual, but also by the noneconomic factors like health and education level of the people. But now-a-days, more and more emphasis is given on the concept of well-being of the population in the context of limiting role of GDP in ensuring equitable distribution of wealth. Formulation of a policy in achieving both the policy objectives (i.e., development of financial sector and ensuring well-being of the population) essentially calls for an understanding on the linkages between financial development and well-being of the population. In this context, this paper attempts to develop a conceptual framework on the linkages between the financial development and the human well-being in the context of inclusive development paradigm. In addition, this paper also tries to conceptualise the theoretical framework on the implications of financial development and/or human well-being on the level of income inequality or the other way round. The empirical analysis in this paper shows that there is positive and significant bidirectional relationship between the financial development and human development across selected countries of the world. Government intervention in the development in the financial sector (or achieving a higher level of well-being of the population) can also reduce the extent of inequality in the distribution of income.
Are Regulatory Measures Influencing Bank Performances: The Ethiopian Case
The study has explored the impact of selected regulatory variables on performances applying a panel regression on 18 commercial banks in Ethiopia for the period 1999-2015. The variables used in the model are directly derived from the extant regulatory approach used by the Central Bank to regulate the banking business. The literature review also shows that most of them are enacted in other countries with few exceptions and mainly related to bill purchase requirements. The model constructed, therefore, has established and finds a statistically significant relationship in some of the regulatory variables with performance measures. The most important findings of this study relate to the negative affect of some of the recent policy directions from the regulator on performances. For instance, branch growth and bill purchases have a statistically significant negative relationship with bank performances. This should be one of the areas requiring policy flexing from the regulatory side in the future. Nevertheless, other policy direction such as capital growth requirement remains a positive contributor to performances. More specifically, the study finds that exchange rate has a positive and statistically significant relationship with the profit models. Despite the benefit of a depreciating local currency and a stable foreign currency type to shield them from currency fluctuation, it allowed banks to earn a policy profit. The depreciation of Birr permitted banks to enjoy a profit from their foreign currency holdings in the form of daily asset revaluations. Nevertheless, many of the variables (prudential regulatory variables) used in this study (interest rate, reserve rate, number of new entrant banks, and level of entry capital) are not statistically significant to influence on bank performances.
Explicit time discretization programming approach to risk modelling
Abstract
In this paper we formulate an explicit time discretization model for modeling risk by establishing an initial value problem as a function of time. The model is proved stable and the scaled-stability regions can encapsulated the volatile macroeconomic condition pertaining to financial risk. The model is extended to multistage schemes where we test for convergence under higher-order difference equations. Further, for addressing advection problems we have used Runge-Kutta method to propose a multistep model and have shown its stability patterns against general and absolute stability conditions. The paper also provides second-order and forth-order algorithm for computational programming of the models in practice. We conclude by stating that explicit time discretization models are stable and adequate for changing business environment. Keywords: Explicit time discretization; Runge-Kutta Method; algorithms; computational programming; risk modeling.
Long Memory of NSE Indices
Abstract
Long range memory in share indices show temporal dependence between observations spaced by long intervals of time and has distinct non-periodic cycles. This paper examines the presence of long memory of various indices of National Stock Exchange (NSE). The data consists of closing values of indices over different periods of time. The tests applied to examine long memory are Hurst exponent, Manderbolt-Hurst exponent, Lo’s rescaled-range analysis and Geweke and Porter-Hudak (GPH) test. The results of the estimated Hurst exponent, Manderbolt-Hurst exponent and GPH test show that invariably all NSE indices series have long memory. However, the results of Lo’s rescaled-range analysis indicate the absence of long memory for all indices. Key words: Long memory, rescaled range analysis, fractional dimension, Hurst exponent, GPH test, NSE indices
Price Discovery in precious metals market: A study of Gold
Abstract
Gold is the oldest known precious metal on this earth and for a long time it has been used as a standard currency. The present study has been undertaken with an attempt to analyze whether Indian futures market is playing its role of price discovery in case of gold or not. For the purpose of study, data for spot and futures prices for a period of four and a half years starting from June 2005 to December 2009 has been collected from the website of Multi Commodity Exchange of India Limited, India’s largest commodity exchange in terms of value of trading on commodity exchanges in India. Data has been tested for statioanrity and was found non stationary. It was then transformed to make it stationary. On the basis of Johansen’s cointegration test, series of spot and futures prices were found cointgrated. Granger Causality test was applied on stationary data. The results of the study show that futures market in India is performing its role of price discovery in case of Gold. Keywords: Price Discovery, Commodity Market, Granger Causality, Cointegration.
Heuristic selection of portfolio based on coefficient of optimism
Abstract
The mean-variance method developed by Markowitz (1959) was aimed at obtaining optimizing portfolios. But selection of portfolio in the real world mostly deviates from this optimal criterion. In this paper we have considered this issue from an altogether different aspect and developed means for aiming at nearly optimum portfolio. We considered the risk taking propensity as the main driving force and presented a heuristic method to reach the near to the optimal state. For doing so, we have introduced the coefficient of optimism in the decision making process and simultaneously considered conditional optimum portfolio and corresponding heuristic portfolio. In the extreme situations three different human value systems can be considered as optimistic, pessimistic and risk planner. To examine the closeness between the heuristic and optimum portfolios we have carried out empirical analysis covering ten years data of fifteen companies from Nifty (2000-09). Regarding the choice of companies we have adopted random selection technique. From empirical study we have found that for moderate values of the coefficient of optimism a heuristic investor’s decision nearly coincides with the corresponding optimum portfolio. However, for extreme situations i.e. optimistic and pessimistic situations heuristic portfolio differs from optimum portfolio. Keywords: Expected return, risk, optimum portfolio, heuristic portfolio, coefficient of optimism.
Adoption and Diffusion of Electronic Banking by Customers: Critical Analysis of Empirical Evidences
Electronic banking is the new trend significantly adopted by banking sector worldwide due to its wider scope for the customers as well as banks at large. It has potential to hold great promises for bankers to grab huge business opportunities. In the present study, the diverse literature available worldwide on the adoption and diffusion of e banking has been explored to identify the significant constructs which enable innovation to diffuse among the customers and ultimately lead to its adoption. Its main purpose is to understand the trend of various research aspects prevailing in the field of banking and related to the adoption of innovative services by customers. In order to review the relevant literature, research papers have been collected from the referred journals related to innovation, marketing and banking. Qualitative approaches have been used in order to analyse and compare the main findings as well as applicability of the research papers. Hence, using an interpretative and critical approach through content analysis of the studies reviewed, the important measures viz. Research Methodology, Sample size, Respondents’ profile, Model applied and Significant Constructs have been taken into account for further inquiry. This study builds up a strong conceptual framework for the researchers by thoroughly analyzing the empirical studies of last 11 years i.e. from 1999 to 2009 which further links the consumers’ perceptions and orientation to practical implications. Keywords: Adoption and Diffusion Models, Electronic banking, Technology, Literature Review, Content Analysis.
Multivariate Causal Estimates of Dividend Yields, Price Earning Ratio and Expected Stock Returns: Malaysian Evidence
The study examines the relationship among Malaysian’s market stock return, dividend yields and price earnings ratio. Specifically, it examines the existence of long-run and short-run relationship and also their predictive power (causality) between and among market stock return, dividend yields and price earnings. Using the monthly data from 1989-2005, the study finds that all these fundamental variables have a strong long run relationship. As for the short run relationship, the results show significant positive predictive power from dividend yield to stock return and significant negative relation from stock returns to price earning ratios. In addition, applying multivariate causality test, the results show that both dividend yields and price earning ratio Granger cause (predict) the stock return. Similar results are found from stock returns and P/E ratio to dividend yield, as well as from dividend yield and stock returns to P/E ration but with lesser magnitude. Thus, fundamental variables are an important source of information in determining stock market returns and useful to investors and other market participants in deciding their investment strategies. Keywords: Stock return, dividend yield, price earning ratio, Malaysian market.
Effect of Financial Crisis in Efficiency and Strategic Homogeneity of Indian Commercial Banks: An Empirical Investigation
The mean-variance method developed by Markowitz (1959) was aimed at obtaining optimizing portfolios. But selection of portfolio in the real world mostly deviates from this optimal criterion. In this paper we have considered this issue from an altogether different aspect and developed means for aiming at nearly optimum portfolio. We considered the risk taking propensity as the main driving force and presented a heuristic method to reach the near to the optimal state. For doing so, we have introduced the coefficient of optimism in the decision making process and simultaneously considered conditional optimum portfolio and corresponding heuristic portfolio. In the extreme situations three different human value systems can be considered as optimistic, pessimistic and risk planner. To examine the closeness between the heuristic and optimum portfolios we have carried out empirical analysis covering ten years data of fifteen companies from Nifty (2000-09). Regarding the choice of companies we have adopted random selection technique. From empirical study we have found that for moderate values of the coefficient of optimism a heuristic investor’s decision nearly coincides with the corresponding optimum portfolio. However, for extreme situations i.e. optimistic and pessimistic situations heuristic portfolio differs from optimum portfolio. Keywords: Expected return, risk, optimum portfolio, heuristic portfolio, coefficient of optimism.
Why Is CJI So Conspicuously Silent On More High Court Benches?
It is a matter of greatest national shame that Uttar Pradesh which is the biggest state amongst all the states in India with maximum population at more than 22 crore as UP Chief Minister Yogi Adityanath and Prime Minister Narendra Modi keep proudly bragging about at public rallies time and again which is more than even that of Pakistan and many other countries, maximum MPs in Lok Sabha at 80, maximum MPs in Rajya Sabha at 31, maximum MLAs in Vidhan Sabha at 404, maximum MLAs in Vidhan Parishad at 100, maximum Judges at lower courts at more than 5000, maximum Judges in High Courts at 160, maximum pending cases in lower courts at more than 50 lakhs, maximum pending cases in high court at more than 10 lakh, maximum members in UP Bar Council which is more than one lakh which is the highest not just in India but in the whole world as is pointed out in the website of UP Bar Council itself, maximum Mayors, maximum villages which is again more than one lakh, maximum tehsils, maximum Mayors, maximum constituencies at 80, maximum districts at 75, maximum poverty and what not yet has least high court benches in India – only one and that too just about 200 km away from Allahabad at Lucknow!
What a shame that Jawaharlal Nehru had the great guts to create a high court bench in Lucknow on July 1, 1948 about 71 years ago which is just 200 km away from Allahabad where main high court is located but no PM had the guts to create a high court bench thousands of kilometers away at any of the 13 districts in hilly areas which now constitute a separate state called Uttarakhand and the people then numbering 88 lakh living there had to travel so far for more than 50 years after independence which led to resentment and agitation of a separate state and now it has a high court nor at any other district in UP!
Why is it that Justice Jaswant Singh Commission headed by former Supreme Court Judge Justice Jaswant Singh had in late 1970s recommended 3 high court benches at Agra, Dehradun and Nainital but Centre did not approve even a single bench for UP even though it created bench at Aurangabad in Maharashtra, at Jalpaiguri in West Bengal and Madurai in Tamil Nadu on its recommendations? Why former UN Secretary General Ban ki moon had slammed UP as the “rape and crime capital” of India when he was in office but our law makers never felt it necessary to create even a single more bench for any other district in UP other than Lucknow where it was created way back in 1948? Why peaceful states like Karnataka has 3 high court benches, Assam has 4 high court benches, Maharashtra has 4 high court benches but UP which has maximum pending cases at more than 10 lakh cases in high courts even though other states have just 1 or less than 2 lakh pending cases yet they have so many high court benches but UP has just one?
Why is it that West UP which owes for more than 57% of the total pending cases of UP as acknowledged by the Justice Jaswant Singh Commission itself has not even a single bench of high court in any of the 26 districts? Why is it that the situation in West UP is so lawless which can be gauged from this that the newly elected Chairperson of UP Bar Council – Darvesh Singh Yadav was shot dead right inside court premises just three days after being elected just recently on June 12, 2019 yet West UP has not even a single bench of high court? Why is it that the former UP High Court Chief Justice Dilip Babasaheb Bhosale who hails from Maharashtra in a heinous case involving rape of few women on national highway in Bulandshahr in West UP had rightly said as Chief Justice of Allahabad high Court that there is total lawlessness in UP as compared to Maharashtra where women can travel alone in night anywhere without any fear but still see the crowning irony that Maharashtra has 4 high court benches at Panaji, Nagpur, Aurangabad and latest at Kolhapur for just 6 districts but for UP just a single bench since 1948? When peaceful states like Maharashtra can get benches in no time then why Allahabad High Court in UP which has maximum pending cases in India has been denied its due share unfairly for such a long time?
One cannot but fully agree with Chief Justice of India – Ranjan Gogoi that the number of Judges must be increased and the retirement age of High Court Judges must also be increased from 62 to 65 but what about High Court Benches? Why is CJI so conspicuously silent on such a sensitive issue? Why is it that CJI Ranjan Gogoi fully admired that KL Chitra a woman advocate who filed a PIL pleading for a high court bench in West UP last year was right that there is a valid reason for creating a bench in West UP but declined to entertain it as he said that it is for the Centre to do so knowing fully well that Centre has done nothing in last more than 70 years even after the historic recommendations of Justice Jaswant Singh Commission of creating 3 benches in UP but not a single bench was created in any hook and corner of UP?
Why is it that CJI ignores that the 230threport of Law Commission of India recommended more high court benches for states? Why CJI ignores that Centre created 2 more high court benches for Karnataka at Dharwad and Gulbarga for just 4 and 8 districts in 2008 first as circuit benches which were made permanent in 2012 apart from the bench at Hubli but for UP not a single bench created till now in 2019 even though Karnataka has less than 2 lakh pending cases and UP has more than 10 lakh pending cases and here too West UP alone has more than 5 lakh pending cases in high court? Why CJI does not writer about this to Centre?
Why the lawyers of more than 20 districts of West UP keep going on strike for last nearly 40 years from May 1981 till now every Saturday protesting the denial of bench but CJI does not deem it fit to mention it to Centre? Why the lawyers of West UP even went on strike for 6 months in 2001 and earlier also similarly and not stopping here even went on strike for 3 months in 2014-15 also and for nearly a month every year but still West UP has no bench? Why is it that litigants of West UP are compelled to travel more than 800 to 900 km away to Allahabad to attend cases as there is no high court bench in West UP yet CJI says nothing on it?
Why is it that West UP always remains in the news for wrong reasons for brutal crimes and still CJI doesn’t write to Centre demanding high court bench for it? Why is it that the population of West UP at more than 9 crore is more than all states except UP of which it is a part, Maharashtra and Bihar and here too areawise West UP at 98,933 square km is bigger than Bihar which has just 94,000 square km but still has not even a bench? Why CJI does not point out that so many UP CM like Sampoornanand had recommended a high court bench for West UP at Meerut in 1955 but till now not a single bench created anywhere in any of the 26 districts of West UP? Why CJI does not point out that even small islands like Andaman and Nicobar islands have high court bench with just 3 lakh population at Port Blair but West UP with more than 9 crore population has none?
Why CJI does not recommend more benches for other lawless states like Bihar which has none even though we daily keep listening news of horrifying crimes in different districts of Bihar? Why other big states like Odisha has no high court bench even though the lawyers of Western districts keep protesting for a bench frequently, why Rajasthan has just one high court bench at Jaipur alone and not at other places like Udaipur where lawyers keep demanding the same? Why only a few big states like Maharashtra, Karnataka and Assam have either 3 or more than 3 benches? Why not others who either have just one or have none? Why can’t this glaring and shameful indiscrepancy be corrected immediately?
What a crying shame that UP CM Yogi Adityanath government has the ability to bear Rs 36,000-crore for construction of 600 km Ganga Expressway for better connectivity of Allahabad with western districts of the state and which will be the longest expressway in the world but it can’t spare just a few crores for creating a high court bench in lawless West UP or at Bundelkhand or at any other deserving place so that people are not compelled to travel so far and waste huge money in doing so for various expenses like staying, travelling, etc! Why can’t Centre take serious steps to address this cancerous problem of law and order in UP root and branch by creating more benches here and just resorting to baby steps and bandaid measures like reducing time limit to reach Dlhi by about an hour or so by spending more than 20 crores on creating 14 lane national highways? Why can’t CJI direct Centre to do so accordingly?
Why is CJI so conspicuously silent on more high court benches not just in UP but in other different states also like Bihar from where the present Union Law Minister Ravi Shankar Prasad hails? Why only a few states are enjoying the right to speedy justice, justice at doorsteps and cheap justice? Why big states like UP, Bihar and others are being wrongly deprived of the same?
Let me again reiterate that there can be no denying or disputing what CJI says regarding increasing the number of Judges in Supreme Court and High Court and age also of High Court Judges but this alone is not enough to ensure that people get justice easily and cheaply! More high court benches also must be created for big states like UP, Bihar, Rajasthan, Odisha and others as was very rightly recommended by the 230th report of Law Commission of India more than 10 years ago but which has been implemented only in Karnataka, Maharashtra and West Bengal! Why UP which has maximum pending cases and other states left out in the cold?
Should the CJI not speak out most vociferously on this also? Who can deny that Allahabad High Court is the biggest high court not just in India but in whole of Asia yet has just one bench which is so close at Lucknow and is also one of the oldest high court which completed its 150 year of creation in 2016? Who can deny that Bar Council of UP has maximum members in whole world yet UP has just one bench and here too West UP which owes for more than half of pending cases has none? Can this be justified on any ground and under any circumstances? Certainly not! Allahabad High Court must get its due share as it has maximum pending cases, maximum Judges and what not! It must have maximum benches in India and not minimum as most unfortunately we have been seeing since last 72 years! It is CJI’s moral and constitutional duty to point out in detail about this to the Centre and if still Centre does not act then the CJI must most promptly order the creation of a high court bench in any of the 26 districts of West UP and also at other suitable places in different deserving states like Bihar, Odisha and Rajasthan! It brooks no more delay anymore now!
Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi,
A 82, Defence Enclave,
Sardhana Road, Kankerkhera,
Meerut – 250001, Uttar Pradesh.
Himachal Pradesh Solar Power Policy 2018
Himachal Pradesh Solar Policy and it\’s Solar Highlights
Himachal Pradesh translated to \”Snow Abode\” and is a state that is located in Northern region of India. It has states like Punjab, J&K and Haryana as its neighbouring states. The state is most famous for its hill stations, with Shimla being a real tourist favourite. Shimla happens to be the capital of the state with Dharamsala being the winter capital. Himachal Pradesh, or HP as it is referred to sometimes, has an installed and commissioned rooftop capacity of 0.33MW with .13MW commissioned in the FY 2016/17. In order to promote solar and encourage the investment, Himachal Pradesh Electricity Regulatory Commission has framed regulations offering a fixed tariff of Rs 5 per unit for extra energy produced and fed back to the grid. This is one of the highest tariffs for Net Metering in the country. Himachal Pradesh is also encouraging farmers and unemployed youth to set up projects in distributed fashion. These plants will be typically in the range of 500KW to 5MW. There are also plans to set up solar parks in the state. Even though there are no real large-scale solar power plants in the state, the state is purchasing up to 35MW solar power from plants outside the state. As a part of the target set for the National Solar Mission, Himachal Pradesh is chasing 220 MW solar commissioned capacity by the year 2022.
Bringing Solar Power to the people
In consonance with the National Policy, the State Govt has formulated the Solar Power Policy which was notified on 4th March 2014. In order to simplify the procedure and as per the recommendations of Project Developers, the revised Solar Power Policy with key amendments was notified on 24th January 2016. Solar Energy is one of the most viable option to supplement Hydro amongst the Renewable Energy Technologies. Solar Energy is in line with the objective of sustainable development by producing clean energy. Encouraging Investors, Stakeholders & Individuals for Solar Energy is a priority for Himurja to move forward with eco-friendly Power initiatives.
The Govt. of India has upscaled the capacity target from 20,000 MW to 1,75,000 MW (175 GW) to be achieved by 2022, of which 40 GW is planned through Grid Connected Rooftop Solar mode. The H.P. State Government is keen to contribute to achieving the targets set under the National Solar Mission for the development of Solar Power. Hence, our Solar Power Policy emphasizes its efficiency and recommends it to all investors.
In an attempt to tap solar power potential in Himachal Pradesh, the Himachal government is inviting applications for setting up 250 KW to 500 KW power project in the private sector to provide employment to unemployed youth.
A plan has been prepared by the HP Energy development agency (HIMURJA) for tapping 20 MW solar energy which would be notified soon, Tarun Kapoor, Additional Chief Secretary, Renewable Energy said.
He said the plan has been approved by the government and under this scheme, solar power projects of at least 250 KW and maximum 500 KW will be set up on the private land of the applicant.
“The plan would provide employment to unemployed youth and also result in utilisation of barren lands across the state,” he said.
Kapoor said only permanent Himachali residents are eligible for setting up of the projects. Partnership firms and private companies may also apply, provided that the share of Permanent Himachali is 100 per cent, he added.
The projects would be allotted on ‘First Come, First Serve’ basis and HIMURJA would be accept 40 to 80 applications for the same.
“The government would not accept more applications after the limit of 20 MW power is exhausted,”
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