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Articles 1 - 16 of 16
Full-Text Articles in Finance and Financial Management
Trading Regularity And Fund Performance: Evidence In Uncertain Markets, Lin Tong, Zhe Zhang
Trading Regularity And Fund Performance: Evidence In Uncertain Markets, Lin Tong, Zhe Zhang
Research Collection Lee Kong Chian School Of Business
High trading regularity funds outperform low trading regularity funds more during periods of low market returns and greater market and economic uncertainty. Their trading also has strong return predictability on stock returns during periods of greater uncertainty. They trade more around news events, and their news related trading predicts stock return stronger during periods of greater uncertainty. They also profit from liquidity provision in highly uncertain market environment. Overall our evidence suggests that high trading regularity funds trade more frequently during periods of high uncertainty when information production and processing skill is more valuable and when the demand for liquidity …
Macroeconomic Stabilization In The Digital Age, John Beirne, David Fernandez
Macroeconomic Stabilization In The Digital Age, John Beirne, David Fernandez
Research Collection Lee Kong Chian School Of Business
Macroeconomic Stabilization in the Digital Age provides insights into factors affecting the macroeconomic management of the economy in the digital age. Policy makers need to be aware of the increasing prominence of the digital economy and digital finance and seek to better understand how continued digitalization will affect policies aimed at managing the economy. For emerging market economies (EMEs), macroeconomic policy challenges have been exacerbated by the digital finance revolution in the aftermath of the global financial crisis and the coronavirus disease (COVID-19) pandemic, when many EMEs experienced large and volatile capital flows. Policy makers must also navigate through fluctuating …
Can Retail Investors Learn From Insiders?, Ekkehart Boehmer, Bo Sang, Zhe Zhang
Can Retail Investors Learn From Insiders?, Ekkehart Boehmer, Bo Sang, Zhe Zhang
Research Collection Lee Kong Chian School Of Business
This paper examines the trading patterns of retail investors following insider trading and the corresponding price impact. Retail investors follow the opportunistic purchases by insiders, but not their routine purchases. Neither investor attention nor common information such as earnings announcements or analysts forecast re- visions explains the results. They keep following insider purchases in subsequent four quarters. Moreover, for stocks with opportunistic insider purchases, those that retail investors bought yield higher cumulative abnormal returns than those that retail investors sold. The effect is mostly driven by the information compo- nent of the retail trades, rather than liquidity provision or temporary …
Will Ceos With Banking Experience Lower Default Risks? Evidence From P2p Lending Platforms In China, Qiang Gong, Chong Liu, Qianni Peng, Luying Wang
Will Ceos With Banking Experience Lower Default Risks? Evidence From P2p Lending Platforms In China, Qiang Gong, Chong Liu, Qianni Peng, Luying Wang
Research Collection Lee Kong Chian School Of Business
Using a novel dataset of 121 Chinese P2P lending platforms, we investigate the impact of CEOs' banking experience on default risk. The empirical results indicate that CEOs with prior banking experience manage default risk better. Moreover, CEOs' banking experience has a stronger influence on small platforms and in situations where the platforms' depository banks are city commercial banks. Our results indicate that although fintech provides technology to reduce risks, we cannot ignore the constructive role of professional experience in risk management. Thus, investors and regulators in emerging markets should pay attention to managers' financial qualifications, and especially to CEOs' banking …
Do Short Sellers Use Textual Information? Evidence From Annual Reports, Hung Wan Kot, Frank Weikai Li, Ming Liu, K.C. John Wei
Do Short Sellers Use Textual Information? Evidence From Annual Reports, Hung Wan Kot, Frank Weikai Li, Ming Liu, K.C. John Wei
Research Collection Lee Kong Chian School Of Business
We examine short-sellers’ use of textual information in annual reports for shorting activities. We find that more uncertainty and negative words in annual reports are associated with greater abnormal shorting volume. Short selling motivated by textual information negatively predicts stock price reaction around the filing date of 10-K reports. We further provide some evidence that textual information used by short-sellers are related to revisions of analysts’ earnings forecasts, changes in firm fundamentals, and increasing crash risk subsequently. Our results suggest that textual information in annual reports forms an important part of short-sellers’ information advantage.
Financial Technology And Inclusion In Asean, David Fernandez, Marc Rakotomalala
Financial Technology And Inclusion In Asean, David Fernandez, Marc Rakotomalala
Research Collection Lee Kong Chian School Of Business
Financial technology (FinTech) has the potential to be a positive, game-changing force for boosting financial inclusion in ASEAN, as mobile money and greater access to basic financial services have the capacity to improve the economic well-being of households. Indeed, technology has been shown to drive broader increases in economic growth, which itself interacts positively with financial inclusion. In a more direct way, new, specific fintech developments globally and in ASEAN itself can be beneficial for financial inclusion. In this paper, we look at financial inclusion and technology, and how cooperative efforts between ASEAN policymakers, the private sector, and their broader …
Do Women Receive Worse Financial Advice?, Utpal Bhattacharya, Amit Kumar, Sujata Visaria, Jing Zhao
Do Women Receive Worse Financial Advice?, Utpal Bhattacharya, Amit Kumar, Sujata Visaria, Jing Zhao
Research Collection Lee Kong Chian School Of Business
We arranged for trained undercover men and women to pose as potential clients and visit all 65 local financial advisory firms in Hong Kong. At financial planning firms, but not at securities firms, women were more likely than men to receive advice to buy only individual or only local securities. Women clients who signaled that they were highly confident, highly risk tolerant or had a domestic outlook, were especially likely to receive this suboptimal advice. Our theoretical model explains these patterns as the result of statistical discrimination interacting with advisors’ incentives. Taste-based discrimination is unlikely to explain the results.
Bermudan Option In Singapore Savings Bonds, Kian Guan Lim
Bermudan Option In Singapore Savings Bonds, Kian Guan Lim
Research Collection Lee Kong Chian School Of Business
The Singapore Savings Bonds (SSB) is a unique investment program offered by the Singapore government whereby retail investors can earn risk-free tax-free step-up interest closely matched to Treasury bond rates for up to 10 years and can redeem on any business day prior to maturity without any early redemption penalty. This study analyses the unique design of the SSB and provides a valuation of the Bermudan option for early redemption that is embedded in the SSB. The Black-Derman-Toy model is used to build the interest rate tree, and an iterative method is employed to avoid arbitrary specification of the pre-determined …
Go Big With Economic Push To Fight Covid-19, David Fernandez
Go Big With Economic Push To Fight Covid-19, David Fernandez
Research Collection Lee Kong Chian School Of Business
Economic policymakers need to focus on taking bold and immediate action in order to tackle the pandemic crisis.
Green Bonds For Financing Renewable Energy And Energy Efficiency In South-East Asia: A Review Of Policies, Dina Azhgaliyeva, Anant Kapoor, Yang Liu
Green Bonds For Financing Renewable Energy And Energy Efficiency In South-East Asia: A Review Of Policies, Dina Azhgaliyeva, Anant Kapoor, Yang Liu
Research Collection Lee Kong Chian School Of Business
Mobilizing private finance for renewable energy and energy efficiency is critical for Association of South-East Asian Nations (ASEAN) not only for the reduction of global temperature rise but also for meeting fast-growing energy demand. Two-thirds of green bonds issued in ASEAN were used to finance renewable energy and energy efficiency projects. This paper provides a review of green bond issuance and green bond policies in ASEAN. Issuance of green bonds in top three green bond issuing countries in ASEAN, i.e. Indonesia, Malaysia and Singapore, are reviewed in detail. Green bond policies in ASEAN are effective in promoting green bond issuance. …
Why Commonality Persists?, Raja Velu, Zhaoque Zhou, Chyng Wen Tee
Why Commonality Persists?, Raja Velu, Zhaoque Zhou, Chyng Wen Tee
Research Collection Lee Kong Chian School Of Business
Studies on commonality in returns, order flows and liquidity find that the first principal component is closely aligned with the market factor. With the increasing presence of high-frequency trading, commonality in returns, order flows, and liquidity can potentially arise from the commonality in the interpretation of real-time signals. In this paper, we go beyond the first factor and show that the other dominant principal components consistently reflects investors' herding behavior, demonstrating the multi-dimensional aspect of commonality. Instead of relating the asset returns to order flows, we take both as endogenous, and provide empirical evidence showing that returns commonality is driven …
A Behavioral Signaling Explanation For Stock Splits: Evidence From China, Chenyu Cui, Frank Weikai Li, Jiaren Pang, Deren Xie
A Behavioral Signaling Explanation For Stock Splits: Evidence From China, Chenyu Cui, Frank Weikai Li, Jiaren Pang, Deren Xie
Research Collection Lee Kong Chian School Of Business
We propose a behavioral signaling explanation for the positive announcement effects of stock splits. There are two key behavioral ingredients in our model. First, (retail) investors have misconceptions about stock splits that make them view stock splits as good news. Second, investors are loss-averse and will be particularly disappointed if a splitting firm’s ex-post performance falls short of expectation. In a separating equilibrium, only managers with favorable private information use stock splits to signal. Using a comprehensive sample of stock splits in China over the period of 1998 to 2017, we find supporting evidence: (1) stock splits elicit positive announcement …
Time-Series Momentum: Is It There?, Dashan Huang, Jiangyuan Li, Liyao Wang, Guofu Zhou
Time-Series Momentum: Is It There?, Dashan Huang, Jiangyuan Li, Liyao Wang, Guofu Zhou
Research Collection Lee Kong Chian School Of Business
Time-series momentum (TSM) refers to the predictability of the past 12-month return on the next one-month return, and is the focus of several recent influential studies. This paper shows, however, that asset-by-asset time-series regressions reveal little evidence of TSM, both in- and out-of-sample. While the t-statistic in a pooled regression appears large, it is not statistically reliable as it is less than the critical values of parametric and non-parametric bootstraps. From an investment perspective, the TSM strategy is profitable, but its performance is virtually the same as that of a similar strategy that is based on historical sample mean and …
Commentary: Where Does The Talent Pools Of Smes Come From?, T. Mandy Tham
Commentary: Where Does The Talent Pools Of Smes Come From?, T. Mandy Tham
Research Collection Lee Kong Chian School Of Business
In a commentary, SMU Assistant Professor of Finance Mandy Tham explored how ‘family members’ is defined could affect the size of talent pool for SMEs and family businesses, and suggested some criteria for the selection of family members to be nurtured for the SMEs and family businesses.
Superstition, Conspicuous Spending, And Housing Market: Evidence From Singapore, Jia He, Haoming Liu, Tien Foo Sing, Changcheng Song, Wei-Kang Wong
Superstition, Conspicuous Spending, And Housing Market: Evidence From Singapore, Jia He, Haoming Liu, Tien Foo Sing, Changcheng Song, Wei-Kang Wong
Research Collection Lee Kong Chian School Of Business
We study the effect of superstition and conspicuous spending motives on housing demand and price in Singapore. We find that buyers pay less for homes with unlucky addresses and more for homes with lucky addresses. There were fewer housing transactions on inauspicious days of the lunar calendar when people are advised to avoid making major economic decisions. This suggests that superstitious belief still affects economic activities. The demand for lucky addresses is also weaker on these inauspicious days, suggesting that superstitious belief indeed affects the demand for lucky addresses. Moreover, the price premium for a lucky address is significantly higher …
Financial Illiteracy And Pension Contributions: A Field Experiment On Compound Interest In China, Changcheng Song
Financial Illiteracy And Pension Contributions: A Field Experiment On Compound Interest In China, Changcheng Song
Research Collection Lee Kong Chian School Of Business
I conduct a field experiment to study the relationship between peoples’ misunderstanding of compound interest and their pension contributions in rural China. I find that explaining the concept of compound interest to subjects increased pension contributions by roughly 40%. The treatment effect is larger for those who underestimate compound interest than for those who overestimate compound interest. Moreover, financial education enables households to partially correct their misunderstanding of compound interest. I structurally estimate the level of misunderstanding of compound interest and conduct a counterfactual welfare analysis: lifetime utility increases by about 10% if subjects’ misunderstanding of compound interest is eliminated.