Finance

This study seeks to assess the Impact of the Contributory Pension Scheme on employee retirement benefits of quoted firms in Nigeria. In line with this objective, the population of the study is the one hundred and eighty-two (234) firms quoted on the first- tier market of the Nigerian Stock Exchange and ten (10) quoted firms selected as sample size based on the fact that they are some of the companies that had complied with SAS 8. The study utilized data from secondary source. Data were obtained from the annual accounts and reports of the (10) quoted firms that made up the sample of the study. The time frame for the study is ten years, covering the period of 1998 to 2007. The techniques of analysis used in the study were the Student’s T-test and the qualitative grading. We concluded that even though the Contributory Pension Scheme has positive impact on employee retirement benefits of quoted firms in Nigeria, variation in application still exists among them. The study recommended an effective monitoring/supervision and enforcement of the provisions of the Pension Reform Act, 2004, in addition to effective implementation of the penalties provided by the Act on non-compliers regardless of their status or origin. The study calls on the appropriate authorities such as the government, professional accountancy bodies on academics to commission research and activities geared towards developing not only accounting policies that would ensure swift compliance with Statement of Accounting Standards (SAS 8), but strategies that would ensure optimum investments that enhance net worth and profitability of firms.

The present study empirically investigates the risk and return relationship by loading the macroeconomic information in standard CAPM in addition to market information. One hundred financial and non financial companies listed on Karachi Stock Exchange are investigated over a period of January 2005 to August 2011. Monthly data is used for the company asset prices, market portfolio and macroeconomic variables in this study. The macroeconomic variables are used as additional risk forces in the model. The study makes use of CAPM with unconditional and conditional specification for the prediction of future asset prices. The time varying conditional information and lagged macroeconomic variables are added in the model. The GARCH (1, 1) – M technique is applied to capture the conditional volatility clustering of asset returns. The findings of the current study reveals that conditional multifactor CAPM have better results than unconditional multifactor CAPM model. The residuals and conditional variances have significantly positive impact and are helpful in explaining time varying behaviour of asset returns. The macroeconomic variables such as oil prices, foreign exchange rate, foreign exchange reserves, inflation rate, interest rate, and money supply play significant role while industrial production index, unemployment rate, and market returns have inconclusive role in this study. The study concludes that macroeconomic risk factors play a prominent role in explaining stock returns.

This study seeks to explore the factors determining the capital structure of banking sector of Pakistan. A panel data set of 26 banks for the period of 2007 to 2011 was selected to fulfill the objective of this study. The findings of two econometric techniques of panel data i.e. fixed effects and random effects models reveal that size, tangibility, profitability, growth opportunities and liquidity are the significant determinants of capital structure. The size and liquidity of the banks in the sample have direct impact on leverage, whereas, tangibility, profitability and growth opportunities have a negative association with leverage. These outcomes are in line with corporate finance theories such as Trade-Off Theory, Agency Cost Theory and Pecking Order Theory. This study certifies that banking sector has determinants similar to non-financial sector, so, this study will help financial analysts and managers in understanding the dynamics and underlying premises on capital structure of banking sector of Pakistan.

Considering the fact that approximately 80% of problems of organizational security have to do with negligence or lack of users’ awareness of knowledge management (KM) , the users’ knowledge about information security has been identified to be one of the most fundamental issues in information security management. Accordingly, in the present study we analyzed different factors of knowledge management for recording, storage, sharing and dissemination of information security. The current paper is a type of descriptive-correlative in terms of collecting data and pragmatic in goal. The findings come from a field study on knowledge management experts at Iranian universities. Also, a questionnaire was the means for collecting the data. Finally, the data were analyzed using the partial least square and path analysis methods. The findings suggest that the information system users remarkably apply security factors of knowledge management. Furthermore, the authors realized that it is possible to use security factors of knowledge management by increasing the users’ awareness in order to enhance informational security.

To evaluate the financial conditions and performance of a company, the financial analysis needs certain yardsticks. Among the variables, tools are employed in analyzing the financial information contained in the financial statements. Ratio analysis is a widely used tool, which is relevant in assessing the performance of a firm in respect of liquidity position, long-term, solvency. In additional to this, it helps to predict the financial distress of the business. An attempt has been made in the present study to have an insight into the examination of financial health of the organization using Z-Score analysis.

Current study is carried out to look at the deterinmants of profitablity in insurance sector of Pakistan with a panel data set of 31 insurance firms (life insurance sector and no-life insurance) of Pakitan from 2006-2011. To investigete the deterinmants of profitabiltiy two most applicable panel data teachniques (fixed effects and random effects models) are employed and then Hausman’s specification test is applied to select the most effective model. This test proves that fixed effects model is the most appropriated model for this study. The outcomes of fixed effects model propose that leverage, size, earnings voalitiy and age of the firm are signficant determinants of profitablitiy while growth opportunities and liquidty are not significant determinants of peorfitabiltiy. Accordign to best knowledge of authors this is frist study that covers the whole fiancial sector and emoply the appropriate models on the panel data. This study is very handy for the mangement of insurance sector of Pakistan in regarding their profitabilty decsions and stakeholders of insurance sector.

This paper deliberated to impact of domestic trade and Nepal-India trade by demonetization of Indian currency by Indian government. The Indian government is claiming that the action is a surgical strike against black money. The demonetization of the large bills has received mixed reactions. A large section of industry and the public reacted to the decision with overwhelming support, stating that the government should have taken such action a long time ago. Their point is that deflation is the most prominent and quick bang that is going to be seen in the Indian economy. On the other hand, this move is not only going to affect the Indian economy but also the Nepali economy, which is very closely linked to India.

Frequent and abrupt movements affect stock market movements adversely and results it in a highly volatile stock market. Hub of this study is to determine the relationship that exists between stock market volatility and macroeconomic variable concerning price level. Inflation rate, gold, oil and producer prices have been selected as macroeconomic variables concerning price level whereas volatility in KSE-100 Index served as dependent variable of the study. It is based on 144 monthly observations of the selected variables for a period of eleven years from 2002-2013. Multiple regression analysis is applied based on Ordinary Least Square. Findings revealed that statistically there exists a significant relationship between index volatility and selected macroeconomic variables. Movements in oil prices affect capital market movements positively whereas negative impact of inflation rate, gold and producer prices is revealed on index volatility. It is concluded that movements in these variables can help in predicting capital market volatility.

The study investigates the direction of volatility spillover between exchange rate and stock prices in Nigeria using quarterly data for the period of 1990-Q1 to 2009-Q4. Exponential Generalized Autoregressive Conditional Heteroskedastic (EGARCH) framework due to Nelson (1991) was employed. Two different stock exchange indicators were used as proxy for stock prices to test the direction of volatility spillover between the variables. Thus we have two EGARCH models. The ADF and PP tests suggest that the series are random walk processes in their level form. The empirical findings suggest evidence of no long run equilibrium relationship between exchange rate and stock prices. It further shows that there is a robust unidirectional volatility spillover running from exchange rate to stock prices irrespective of the stock market indicator used. The result supports the findings of Beer and Hebeins (2008) for industrialized countries. The estimated mean equation showed that there is instantaneous positive response of stock market volatility to exchange rate fluctuation. Evidence from variance equation revealed that volatility persists longer when SMC was used as proxy for stock prices than ASI. The standard deviation statistic showed that stock market indicator is positively related to risk, validating the capital asset market hypothesis.

While much research has been conducted in the United States on the use of loan loss provisions (LLPs) as a mechanism for managing earnings, managing capital, and as a tool for signaling future earnings strategies, there is a paucity of research in Europe. In this research, we replicate methodology used by Ahmed, Takeda and Thomas (1998) and examine the relative importance of key factors affecting the LLP decisions of Spanish depository institutions. Among others, we focus on the role of organizational structure. We speci?cally examine if and how LLPs are used prior to and after the implementation of capital adequacy regulations in the Spanish depository industry in 1992. Our results indicate that while LLPs were not used as a tool for managing capital after the new regulation came into effect, banks have now adopted a more aggressive earnings management strategy. This appears to be because the capital adequacy regulation of 1992 removed any capital constraint that hitherto acted as a disincentive to aggressive earnings management. Commercial banks appeared to adopt a more aggressive earnings management as well as capital management strategy than savings banks in the post regulatory era. Finally, we did not ?nd evidence that LLPs were used as a signaling tool by Spanish banks to portray their intentions about future earnings.