COVID-19 uncertainty and Bitcoin market, linking the liquidity cost to the cryptocurrency yields

The cryptocurrency market is emerging as a new asset class for the investment. As the traditional asset prices are often noted to be influenced by the liquidity risk, this study links the cryptocurrency liquidity cost to its yields. Pre-pandemic uncertainty, the Bitcoin liquidity cost was found to be priced in its returns during the same trading session. Post-pandemic crisis, the relationship was changed. The liquidity cost was reported not to be priced in the Bitcoin returns at the time of same trading session. Post-pandemic crisis, however, the liquidity cost imposed by the liquidity supplier on day t − 1 was noted to be priced in the Bitcoin return of day t . In the cryptocurrency market, this study quantifies the effects on the Bitcoin returns of its liquidity cost, and if such effects vary pre- and post-pandemic uncertainty.

The Jordanian capital market: Liquidity cost during COVID19 pandemic infection

The COVID-19 outbreak has affected the entire global financial market in an unprecedented way. Due to disruptions in the global market, the Jordanian financial market also responded to the pandemic and observed sudden volatility. The outbreak of the virus has led the management of the Jordanian market (Amman Securities Exchange / ASE) to halt trading on the secondary market during the period 17 March 2020 – 9 May 2020. Hence, using daily closing prices of listed firms, this paper empirically examines the market’s liquidity cost before its closure (2 January 2020 – 16 March 2020) and after (10 May 2020 – 31 December 2020). The premise of this objective rests on the fact that the trading activity on the secondary market, following the resumption of trading is carried- out within uncertain circumstances. The data used in this study comes from the daily trading reports published by ASE. All listed companies are included in the analysis. Based on the daily closing bid and ask prices, we calculate the daily spreads during two sub-periods (2 January 2020 – 16 March 2020 and 10 May 2020 - 31 December 2020). We then regress the daily spreads on daily stock prices, number of daily contracts, risk, and where the companies list their shares (first or second market). The main findings of this paper are threefold. First, liquidity cost in the ASE is relatively high. Second, following the resumption of trading on the secondary market, liquidity cost has increased. Third, other known determinants of liquidity cost are significant and have the expected coefficient signs. The fact that liquidity cost in the ASE is high, and higher even after the resumption of trading, necessitates some clear policy measures. These include a reduction in the currently used minimum tick.

Antecedent financial performance of Baitul Mal wat Tamwil (BMT): Study in BMT Binama Semarang

<p><strong>Purpose</strong> - BMT is established as an Islamic micro-finance which gives the loans to the middle-low society. A good financial performance describes a good BMT condition to distribute their own loans. This research is a case study of BMT Binama Semarang City during 2009-2013.</p><p><strong>Method</strong> - The kind of data used are secondary data, monthly financial reports for balance statement, profit and loss, and collectability. The instrument of financial performance was measured based on stable, stable–enough, less-stable, and unstable quality using the variables of capitalizing structure, productive asset quality, liquidity, cost efficiency, capitalizing efficiency, economic rentability, and self-capital rentability. The data were analyzed by using multiple linear regression analyses.</p><p><strong>Result</strong> - The research found that financial performance of BMT in 5 years was stable-enough, caused by losing condition on 2010. The result of multiple linear regression showed that there were only two independent variables which had significant affect, they are: cost efficiency and economic rentability. Economic rentability gives more significant role in financial performance of BMT.</p><p><strong>Implication</strong> - The results showed that the financial performance of BMT Binama Semarang City was quite healthy. This quite healthy condition can be raised to be healthy through efforts to focus improvements on variables that show low scoring, namely cost efficiency and economic profitability.</p><p><strong>Originality</strong> - This study focuses on the financial performance of BMT Binama Semarang City.</p>

Bond liquidity, risk taking and corporate innovation

Purpose The purpose of this paper is to investigate how market liquidity condition of corporate bonds can affect firm investment policy, specifically its risk taking, via the disciplinary function of trading. Design/methodology/approach The paper uses fixed-effects OLS and Poisson regression for the baseline specifications. It also employs the introduction of TRACE in 2002 as an exogenous shock to bond trading infrastructure in a difference-to-difference framework to address endogeneity concerns and establish causality. Findings The paper documents a positive relationship between bond illiquidity and firms’ risk taking, specifically a one standard deviation increase in Amihud illiquidity measure is associated with nearly 20 percent increase in exploratory investments compared to CAPEX. The shift in risk taking in turn increases firms’ innovation output to some extent. Research limitations/implications The findings have important implications on firm’s risk taking and growth. The paper identifies a new channel through which firm’s choice of risk can be influenced, namely, bondholder disciplining. The study also has implications about externalities of trading beyond liquidity cost for regulators in designing market microstructure. Originality/value This is the first to study the disciplinary role of bond trading. Conventional wisdom holds that bondholders are passive creditors who do not engage in costly monitoring such as banks. The findings in this paper imply that this may not be the case.

Micro Determinants of Dividend Policy in Quoted Manufacturing Companies in Nigeria

This study examined the factors that determine dividend policy of quoted manufacturing firms in Nigeria. The general purpose is to examine factors that affect dividend policy of the quoted firms. After exhaustive literature review, cross sectional data was sourced from financial statement of twenty quoted manufacturing firms. Dividend payout rate was proxy for dividend policy while growth opportunities, liquidity, management efficiency, profit level, cost of capital, company size and debt equity ratio were proxy for independent variables. The study applied the Pooled Ordinary Least Square (OLS), fixed effect, and random effect regression models using the e-view statistical package. Findings reveal that growth opportunities, profit level, management efficiency and debt equity ratio have negative effect on dividend payout ratio while liquidity, cost of capital and company size have positive effect on dividend payout ratio of the manufacturing firms. We conclude that liquidity cost of capital and company size significantly determine dividend policy while growth opportunities, management efficiency, profit level and debt equity ratio have no significant effect on dividend policy. The study recommends among others, that managers/consultants should carefully examine the economic factors within a firm’s operating environment when carrying out the functions of developing or designing dividend policy for the firm.