Showing papers on "Stock exchange published in 1970"

The Volume of Transactions And Price Changes on The New York Stock Exchange

Abstract: (1970). The Volume of Transactions and Price Changes on the New York Stock Exchange. Financial Analysts Journal: Vol. 26, No. 4, pp. 104-109.

New listings and their price behavior

Abstract: DURING THE LAST DECADE, there have been a large number of new listings on the New York and American Stock Exchanges. These listings are felt by many to be quite beneficial both to the company and to its stockholders.1 Not only is the stock said to be more marketable, but the company is said to benefit significantly from the prestige associated with being a listed company as well as from the free publicity. Because of these benefits, the idea has evolved that investors respond favorably to the listing of a stock traded previously in the over-the-counter market. More specifically, it is contended that a stock should rise in price, relative to the market, after the announcement to list and should continue to rise through the time it is listed and first traded on the exchange, after which, assumedly, it would sell off to a certain extent. Supposedly, the latter behavior is due to profit taking by traders who bought the stock prior to listing in expectation of an upward move in price.2 Overall, however, the effect of listing is regarded as bullish; it is believed to represent something of value to investors.' Consequently, the market price of the stock is said to rise from the price that prevailed previously in the over-the-counter market, all other things the same. The purpose of this paner is to submit the hypothesis cited above to empirical testing, using data from 1960 to 1967. If, in fact, the described pattern of stock-price behavior is significant, there exists in the market an opportunity

Money Supply, Portfolio Adjustments and Stock Prices

Abstract: (1970). Money Supply, Portfolio Adjustments and Stock Prices. Financial Analysts Journal: Vol. 26, No. 4, pp. 19-22.

Does Listing Increase the Market Price of Common Stocks

Abstract: Since 1960 over 230 companies have moved the trading of their common stock from the over-the-counter market to the New York Stock Exchange. Many others have moved from the over-the-counter market to the American Stock Exchange. It is reasonable to assume that the financial managers of these corporations must have felt that listing would somehow increase the market price of their common stock due to improved marketability, prestige, or some other factor.

The Stock Exchange and investment analysis

Abstract: Originally published in 1973, Stock Exchange and Investment Analysis provides a detailed description of the London Stock Exchange and outlines both the principles and practice of finance, investment, and investment analysis. Split into four sections, the book provides critical analysis of the Stock Exchange and its functions, and the securities available to investors. It also addresses the latest developments in the field of investments and provides a detailed discussion on taxation and portfolio analysis. This book will be of interest to academics working in the field of finance and economics.

Retirement of non‐callable preferred stock

Abstract: CONSIDERABLE RESEARCH has been undertaken in recent years on the subject of corporate stock reacquisition. Much of the literature resulting from this research has concerned itself with common stock reacquisition.1 Other articles have dealt with the decline in the amount of non-convertible preferred stock outstanding and the desirability of retiring preferred stock.2 This paper will discuss the retirement of preferred shares having a provision making them non-callable by the corporation. Despite the existence of a non-callable feature, corporations in recent years have been able to accomplish the seemingly impossible task of eliminating these preferreds from their capital structures by making exchange offers for them. However, no comprehensive study has been performed dealing with the precise manner in which these retirements have been accomplished. The first part of this study will examine the recent history of the noncallable preferred stocks listed on the New York Stock Exchange and the American Stock Exchange. A fifteen-year period starting with 1953 will be used for this analysis. The number of issues of non-callable preferred stock outstanding will be traced each year for this fifteen-year period, along with the number of shares outstanding and their approximate market value. The next section will deal with those companies that have succeeded in completely eliminating these securities from their capital structures. The terms of the actual exchange offers will be analyzed to determine the premium over current market value which was offered in addition to any added income a preferred shareholder would realize by accepting the offer. The third part will develop a model to aid in the determination of the effects of retiring a non-callable preferred on the net income of the corporation and on the position of the holder of the stock.

Pay Equity and Equal Employment Opportunity - Developments 2004/2006 and Evaluation

Abstract: My 2004 LEW paper (Hyman. 2006) argued that given the plethora of studies and reports in this area in New Zealand and overseas, the most urgent priority was practical development and piloting of means of implementation of pay and employment equity. There are positive developments, including the establishment and work of the Pay and Employment Equity Unit in the Department of Labour. However, progress is inevitably slow even in the public sector, and many indicators, such as the low representation of women in areas varying from the modern apprenticeship scheme to Directorships of Stock Exchange listed companies; show how far there is to go. Meanwhile carers and cleaners, where Maori and Pacific women predominate, still fight for a living wage. This paper examines and evaluates developments in the last two years, a period when gender and ethnic mainstreaming holds considerable sway in government. This can lead to a lack of commitment, prioritising, and accountability for results, so such monitoring from outside is essential.

Foreign Institutional Investment and Stock Market Volatility in India: An Empirical Analysis

Abstract: The two major capital market reforms of (i) entry of Foreign Institutional Investors (FIIs) in Indian stock market (ii) permission to Indian companies for raising capital from foreign stock exchanges by means of American Depository Receipts (ADRs) / Global Depository Receipts (GDRs). Further introduction of two-way fungibility in these instruments of ADRs / GDRs leads to reduction of the sovereignty of Indian stock market. As such, Indian stock market now, is not only sensitive to national events but also more sensitive to international events. Due to the speculative motive of FIIs investment, investment by FIIs is subject to frequent reversals. Volatility is a measure of how far the current price of an asset deviates from its average past prices. Investors demand higher risk premium as a compensation for increased risk due to volatility. A higher risk premium implies higher cost of capital and thus lowers investment. The prevailing inefficiency in emerging securities markets including India further magnifies the problem of volatility. In this paper, an effort is made to predict stock return volatility and contribution of FIIs investment to that volatility using high frequency data (daily data).

Risk-Return Relationships in Regional Securities Markets

Abstract: This paper analyzes risk-return relationships in regional and national securities markets. Specifically, it presents methods and results of an investigation of simulated portfolios of common stocks traded on the Minnesota over-the-counter (OTC) market and the New York Stock Exchange (NYSE).

Triple exponential smoothing; a tool for common stock price prediction

Abstract: m a in ly by i t s r e l a t i v e m e r i t s r e g a r d in g i t s p r a c t i c a l u s e f u l ­ n e s s i n r e p r e s e n t i n g th e b e h a v io r o f t h e a c t u a l sy s te m . In a t t e m p t in g to d e v e lo p a m odel t o d e s c r i b e t h e system u n d e r l y i n g t h e movement o f s t o c k p r i c e s one m ig h t want an e l a b o r a t e m odel g iv in g v a r i o u s w e ig h ts to th e many v a r i a b le s d e te rm in e d i m p o r t a n t i n a f f e c t i n g th e sy s te m . T h is a p p ro a c h co u ld be fo l lo w e d b u t one sh o u ld r e a l i z e t h a t an a d d i t i o n a l c o s t would be in v o lv e d f o r e s t i m a t i n g t h e e x t r a c o e f f i c i e n t s o f a more e l a b o r a t e m odel. T h is a d d i t i o n a l c o s t sh o u ld be b a la n c e d a g a i n s t t h e b e n e f i t s d e r iv e d from more a c c u r a t e f o r e ­ c a s t s . I f one w ere i n c l i n e d to b e l i e v e t h a t th e sys tem was p e r i o d i c o r o rd e re d s e q u e n t i a l l y , a t r i g o n o m e t r i c model N o te ; R e fe re n c e sh o u ld be made to R obert G oo de ll Brown’ s b o o k . Sm oo th ing . F o r e c a s t i n g and P r e d i c t i o n o f D isc re te Timm S e r i e s . P r e n t i c e H à l l , New York; 1963, f o r a more f o r m a l , t h e o r e t i c a l a p p ro a c h to e x p o n e n t i a l sm o o th in g , a s many o f t h e b a s i c c o n c e p ts o f t h i s c h a p t e r a r e t a k e n from h i s book . Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 10 composed o f s i n e and c o s in e f u n c t i o n s would be a p p r o p r i a t e . By t a k i n g enough te rra s o f t h e F o u r i e r s e r i e s , i t i s p o s s i b l e t o malce t h i s model conform a s c l o s e l y a s d e s i r e d to a system o f t h i s n a t u r e . B e fo re u s in g a m odel o f t h i s t y p e , t h e number o f d a t a o b s e r v a t i o n s p e r c y c le o r p e r i o d m ust be known. As n e i t h e r o f t h e two c l a s s e s o f m odels m e n t io n e d a b o v e , a p p e a re d p r a c t i c a l o r r e a s o n a b l e f o r t h i s a n a l y s i s , we w i l l c o n c e rn o u r s e l v e s w i th t h e p ro b lem o f a p p ro x im a t in g a g iv e n f u n c t i o n P = f ( T ) by means o f a power s e r i e s o f p o l y ­ n o m ia ls o f t h e g e n e r a l form P N Pjj(T )=aQ +aiT+a2Î + . . . W ith t h i s f u n c t i o n we a r e a ssum ing t h a t p r i c e i s t h e d e p e n d e n t v a r i a b l e and i s a f u n c t i o n o f t h e in d e p e n d e n t v a r i ­ a b l e t im e . L e t u s assum e t h a t t h e o r i g i n o f t im e , T = 0 , i s t h e p r e s e n t t im e a t w hich we have a new d a t a o b s e r v a t i o n . We now want t o d e te r m in e t h e c o e f f i c i e n t s o f t h e p o ly n o m ia l c u rv e w hich b e s t r e p r e s e n t t h e p r i c e f u n c t i o n . More s p e c i f i c a l l y , what p o ly n o m ia l o f d e g re e n , comes c l o s e s t to f i t t i n g t h e g iv e n c u rv e n e a r Ï . We d e s i r e t h a t a p p ro x im a t in g c u rv e w hich p a s s e s th r o u g h T and w hich h a s t h e h i g h e s t p o s s i b l e d e g re e o f c o n t a c t w i th t h e g iv en c u rv e a t T. T h is i s a c c o m p lish e d by ex p an d in g t h e f u n c t i o n a ro u n d t h i s p o i n t T. To expand t h e f u n c t i o n P = f ( T ) around t h e p o i n t T, means to t r a n s f o r m t h a t f u n c t i o n i n t o a p o ly n o m ia l fo rm i n w hich t h e c o e f f i c i e n t s o f t h e v a r i o u s te rm s w i l l be e x p re s s e d i n te rm s o f t h e a p p r o p r i a t e d e r i v a t i v e v a l u e s , a l l e v a l u a t e d Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 11 a t t h e p o i n t o f e x p a n s io n T. I t can he p ro v e n t h a t t h e c o e f f i c i e n t s o f t h e a p p ro x ­ im a t in g p o ly n o m ia l w hich h a s t h e h i g h e s t d e g re e o f c o n t a c t w i th th e g iv e n c u rv e a r e : a Q = ? (0 ) , a , = P ' ( 0 ) , a2 =-^^— » • • • » au= By s u b s t i t u t i n g t h e s e v a l u e s i n t o o u r g e n e r a l m o d e l, we th e n have f o r o u r a p p ro x im a t in g p o ly n o m ia l o f d e g re e n : P y ( T ) = 2 ( 0 ) + P '( 0 ) T + f " ( 0 ) . . . 21 m T h is p o ly n o m ia l s e r i e s i s known a s M a c l a u r i n 's s e r i e s f o r a g iv e n f u n c t i o n P ( T ) , expanded a ro und t h e p o i n t T = 0. More g e n e r a l l y , we may be c o n ce rn ed w i th e x p an d in g t h e p o ly n o m ia l f u n c t i o n a b o u t some v a lu e o f T n e a r A, r a t h e r t h a n a ro u n d t h e p o i n t T = 0. I t h a s been p ro v e n , i n an a n a lo g o u s m anner to t h a t u sed f o r t h e M a c l a u r i n 's s e r i e s , t h a t t h e p o l y ­ n o m ia l f u n c t i o n can be expanded a ro u n d any p o i n t A, n o t n e c e s s a r i l y z e r o . T h is i s known a s t h e T a y lo r s e r i e s expan­ s i o n o f t h e p o ly n o m ia l f u n c t i o n P( T) a b o u t t h e p o i n t T = A. The g e n e r a l form o f t h i s e q u a t io n i s : P » (A )= P (A )+ P (1 )(A )(T -A ) (T-A )^+ . . . ( T A ) \ . . . i'l 21 * w here p ( ^ ) ( A) d e n o te s t h e v a lu e o f t h e Nth d e r i v a t i v e o f t h e f u n c t i o n P(T) a t T = A. The e q u a t io n g iv e n above r e q u i r e s thd: t h e f u n c t i o n p o s s e s s f i n i t e d e r i v a t i v e s o f a l l o r d e r s a t T = A. The M a c la u r in and T a y lo r p o ly n o m ia l power s e r i e s have shown t h a t a f u n c t i o n can be r e p r e s e n t e d by an e x p a n s io n a b o u t Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 12 any p o i n t d e s i r e d , so lo n g a s t h e c o e f f i c i e n t s o f t h e m odel can he a p p ro x im a te d by t h e a p p r o p r i a t e o r d e r d e r i v a t i v e s . The r e s u l t s o f t h e s e s e r i e s were d e v e lo p e d f o r c o n t in u o u s f u n c ­ t i o n s u s in g d i f f e r e n t i a l c a l c u l u s ; b u t t h e s e r e s u l t s can a l s o be a p p l i e d to d i s c r e t e t im e s e r i e s . A d e t a i l e d t h e o r e t i c a l d i s c u s s i o n on t h e a n a l o g i e s be tw een D i f f e r e n c e E q u a t io n s and D i f f e r e n t i a l C a lc u lu s w i l l n o t be g iv e n . R e ad e rs i n t e r e s t e d i n a c o m p a ra t iv e a n a l y s i s o f t h e o p e r a t o r s o f t h e s e two m ath­ e m a t i c a l d i s c i p l i n e s may r e f e r e n c e a book i n t h i s a r e a , such a s Samual G o ld b e rg ’ s book . I n t r o d u c t i o n to D i f f e r e n c e Equa­ t i o n s . At t h i s s t a g e o f t h e a n a l y s i s , i t was n e c e s s a r y to d e te rm in e t h e o r d e r o f t h e p o ly n o m ia l model t h a t would be u s e f u l i n d e s c r i b i n g and f o r e c a s t i n g t h e u n d e r l y i n g sy s tem o f p r i c e c h a n g e s . F o r any g iv e n p e r io d o f t im e , t h e p r i c e o f a s t o c k m ig h t be v e r y s t a b l e and a c o n s t a n t model would be a d e q u a te f o r f o r e c a s t i n g p u r p o s e s . At o t h e r t im e s , th e p r i c e m igh t be c h an g in g a t a c o n s t a n t r a t e and a l i n e a r model would be a p p r o p r i a t e . I f t h e p r i c e was a c c e l e r a t i n g a t a c o n s t a n t r a t e , t h e n t h e q u a d r a t i c model would be more a p p r o p r i a t e . A c u b ic f u n c t i o n o f t im e would be p e r t i n e n t i f t h e a c c e l e r a t i o n was c h an g in g l i n e a r l y . T h e o r e t i c a l l y , i f t h e d a t a can be r e p r e s e n t e d by a s im p le a v e ra g e o v e r t im e , th e n th e f i r s t d i f f e r e n c e s be tw een s u c c e s s iv e o b s e r v a t i o n s sh o u ld f l u c t u a t e random ly a ro u n d z e r o . I f a s t r a i g h t l i n e would be a b e t t e r m odel, th e n t h e f i r s t d i f f e r e n c e s w i l l have a n o n z e r o a v e r a g e , b u t t h e second Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 13 d i f f e r e n c e s w i l l f l u c t u a t e a ro u n d z e r o . I n g e n e r a l , i f t h e p r o c e s s u n d e r l y i n g t h e o b s e r v a t i o n s i s e x a c t l y r e p r e s e n t e d by a p o ly n o m ia l o f d e g re e n , t h e n i t i s p o s s i b l e to f i n d t h a t d e g re e by s u c c e s s iv e d i f f e r e n c e s . The n + 1 d i f f e r e n c e w i l l be i d e n t i c a l l y z e r o , i f t h e p o ly n o m ia l i s o f d e g re e n . U s u a l ­ l y one n e v e r h a s d a t a o f t h e u n d e r l y i n g p r o c e s s i t s e l f , b u t o n ly n o i s y o b s e r v a t i o n s and t h e ( a + 1 ) s t d i f f e r e n c e s w i l l a v e ra g e z e r o . The p rob lem o f d e te r m in in g t h e c o r r e c t m odel was even f u r t h e r c o m p l ic a te d b e c a u se t h e c o e f f i c i e n t s i n t h e u n d e r l y i n g p r o c e s s a r e n o t l i t e r a l l y c o n s t a n t , b u t may undergo a s low random w alk i n t im e . I t i s assum ed t h a t t h i s change i s s m a l l enough so t h a t , a t any one p o i n t i n t im e , t h e c u r r e n t e s t i ­ m a te s o f t h e c o e f f i c i e n t s %flll p r o v id e a s a t i s f a c t o r y f o r e c a s t . The q u a d r a t i c model was c h o sen f o r t h i s a n a l y s i s . I t was f e l t t h a t t h i s p o ly n o m ia l m o d e l , i n r e g a r d s to a c c u ra c y ; was t h e m ost p r a c t i c a l and a d e q u a te one t o u s e i n r e p r e s e n t i n g t h e u n d e r l y i n g p r o c e s s o f p r i c e m ovem ents. The c h o ic e o f t h i s

Finance and Growth

Abstract: Sources of finance to promote growth are current earnings, the proceeds from the sale of assets not required for present operation, and outside or ‘external’ moneys raised from shareholders, private individuals and institutions. These sources are strongly influenced by the legal status of companies, their size, past record, gearing and future prospects. For example, non-quoted companies may not offer their shares for sale to the general public. Therefore external sources of finance tend to be rather restricted. Placings may be arranged through brokers for shares, but such companies may not use the more usual procedures of public issues or offers for sale. (1) By and large, of course, non-quoted companies tend to be small, and so do not usually require sums sufficiently large to warrant the use of normal Stock Exchange mechanisms. However, as the number of shareholders is restricted by law to not less than two and not more than fifty, issues to members of the companies may provide a very limited source of external capital. Coming away from the special problems of the non-quoted companies, all concerns are competing for capital and thus have to justify their use of it. Without a good past record of profitability, all forms of capital will be severely limited. Retentions of profit will not yield large sums, and shareholders will be unwilling to lend liberally on the basis of a poor rate of return in the past. Absolute size is also important. Large companies will have more assets to offer as security for loans, and their very size is some indication of commercial success in the past.

Dynamic Effects of U.S. Budget Deficit and Labor Productivity-Real Wage Gap on US Stock Market Performance

Abstract: This paper investigates the dynamic effects of annual U.S budget deficit as a ratio of GDP and labor productivity-real wage gap on US stock market performance. The sample period runs from 1950 through 2012. The standard cointegration methodology is appropriately applied. All the aforementioned variables are nonstationary in levels revealing 1(1) behavior. The coefficient of the error-correction term of the vector error-correction model (VECM) has expected negative sign with statistical significance confirming long-run unidirectional causality stemming from the independent variables to the stock market return. However, the speed of adjustment towards a long-run equilibrium is slow as reflected in the low numerical coefficient of the error-correction term. The evidences on short-run interactive feedback effects are also very weak. Keywords: Budget Deficit, Productivity-Real Wage Gap, Unit Root, Cointegration, Vector Error-Correction Model JEL classification code: E60, G10 INTRODUCTION U.S. Federal budget deficits have been perennial at sustainable levels throughout the US history excepting several years, occasionally. The net effect of the budget deficits on stock market returns is confounding and uncertain through interest rate and price channels depending on the methods of financing. This issue remains a puzzle inspiring numerous empirical studies. In theory, rising deficit boosts federal demand for loanable funds that, in turn, lifts interest rate and crowds out private investment. This decline in private investment reduces corporate capital stock with which to work. This contracting capital stock decreases future earnings growth and cash inflows. In addition, rising interest rate used as a discount factor depresses stock prices. Monetization of increases in budget deficits through quantitative easing lowers interest rates and causes higher expected inflation. Both exert opposing influences on stock prices. In finance, the valuation of stocks depends on the expectation of the current and future cash flows from equities, the risks inherent in those flows, and rate at which those flows are discounted. Stock prices are also influenced by changes in economic activity, interest rate, and inflation, among other macroeconomic fundamentals. Their net effect on stock market at some point of time is ambiguous. Efficient market hypothesis in weak-form further claims that budget deficits have little effect on future stock prices as the past deficits are already incorporated in the current stock prices. Stock price behaviors have important bearings on private sector capital formation, market liquidity, allocative efficiency and economic prosperity meriting further empirical inquiries. The unprecedented rise in U.S. budget deficit and uncharted behavior of U.S. stock market during 2008-2010 renewed interest in studying further the relation between budget deficits and stock prices. Economic theories are unsettling to provide a clear explanation to this uneasy and complex relationship. The effects of rising budget deficits due to income tax cuts or federal spending spree or both on stock prices primarily depend on the state of the economy and the methods of financing the deficits. To explain further, (i) increase in income tax reduces disposable income to spend on consumption goods. This reduces aggregate demand. Given the aggregate supply constraint, prices of consumer goods decline resulting in depressed corporate earnings and hence lower stock prices, ii) financing by federal borrowing from loanable funds market raises interest rate that, in turn, reduces stock prices, and (iii) partial or full monetization of deficits by accommodative monetary easing lowers interest rate without risk of surging inflation, if the economy is at less-than-full employment. This will help lift stock prices. Furthermore, if the economy is at full employment, monetary easing will raise the fear of future resurgence of inflation with dampening effects on stock market as rational investors will reshuffle their portfolios by reallocating funds from financial assets to real assets for hedging purposes. …