Equity Carry Trade in Emerging Markets : Evidence from 11 emerging economies

This thesis studies the implementation of the concept of the “carry trade” in equity markets using data from 11 emerging economies over the period of 1999-2021. The period of 21 years includes both the financial crisis of 2008 and the global pandemic of 2020. The data availability is scarcer for emerging markets than for developed markets, hence the sample consists only about half of all countries that fall within the definition of an emerging market. The first part of this thesis focuses on theories of international parity relationships, history of the carry trade as well as application of that strategy in asset classes other than currency markets. As a concept, the carry trade has proven to be an effective strategy to earn positive excess returns even though its existence contradicts the financial theory called uncovered interest parity. In the common currency carry trade, an investor makes profit by going long the securities with high carry and shorting the securities with low carry. With the currency carry trade, the carry is the interest rate differential between two countries. However, according to uncovered interest parity, carry trade should not yield nonzero returns because the interest rate differential is offset by the exchange rate change. Extending the concept of the currency carry trade, this thesis attempts to apply a generalized version of carry to equity markets. Using data of 11 emerging market equity indices, the carry for each index is measured with the expected dividend yield over the local risk-free interest rate. Then, a long-short portfolio is constructed using individual indices’ carry as a trading signal. The strategy is executed using futures contracts, that is, buying futures contracts of high-carry markets and short selling futures contracts of low-carry markets. Finally, the carry trade strategy’s return is calculated by summing the portfolio carry and the portfolio’s capital change. This study finds support for carry trade strategy in equity markets with a Sharpe ratio of 0.60. It is significantly higher than that of a passive, long-only strategy which yields a Sharpe ratio of 0.14. The findings of this thesis can be summarized into three main points. First, the results suggest that the concept of carry can be extended outside the currency markets to equity markets. In a practical context, an investor could benefit from a simple carry trade strategy by buying index futures with high expected dividend yields and selling index futures with low expected dividend yields. Second, carry is an important component of expected return as it acts as a trading signal and contributes to the profit as well. Finally, the backtest and the regression analysis strengthen the evidence against the uncovered interest/equity parity, and thus also against the “rational expectations” hypothesis.: Tämä tutkimus tutkii “carry trade” -kaupankäyntistrategian implementointia osakemarkkinoilla käyttäen dataa kehittyviltä markkinoilta. Dataa kerätään 11 markkinasta ajanjaksolta 1999– 2021. 21 vuoden ajanjakso sisältää näin ollen sekä vuoden 2008 finanssikriisin että vuoden 2020 maailmanlaajuisen pandemian. Datan saatavuus on niukempaa kehittyvien markkinoiden osalta kuin kehittyneiden markkinoiden ja siksi tutkimuksen otos sisältää vain noin puolet maista, jotka kuuluvat kehittyvän markkinan määritelmään. Tutkimuksen ensimmäinen osa keskittyy kansainvälisiin talousteorioihin, kuten ostovoima- sekä korkopariteettiin, ”carry traden” historiaan sekä sen soveltamiseen muissa omaisuusluokissa kuin valuuttamarkkinoilla. Konseptina ”carry trade” on todistettu olevan tehokas strategia, jolla on mahdollista saavuttaa positiivista ylituottoa, vaikkakin sen olemassaolo on ristiriidassa talousteorioiden kanssa. Harjoittamalla ”carry tradea” valuuttamarkkinoilla sijoittaja voi hyötyä ostamalla korkean ”carryn” omaavia arvopapereita ja lyhyeksi myymällä matalan ”carryn” omaavia arvopapereita. Valuuttakaupassa ”carry” on kahden maan välinen korkoero. Kuitenkin kattamattoman korkopariteetin mukaan ”carry traden” ei pitäisi toimia, sillä korkoeron tasoittaa valuuttakurssin muutos, jolloin sijoittajan lopullinen nettotuotto on nolla. Laajentaen ”carry traden” käsitettä, tässä tutkimuksessa yritetään soveltaa sen yleistettyä versiota osakemarkkinoille. Käyttämällä 11 osakeindeksin dataa kehittyviltä markkinoilta, kunkin indeksin ”carry” mitataan sen odotetulla osinkotuotolla yli paikallisen riskittömän koron. Tämän jälkeen muodostetaan ”long-short” portfolio, jossa käytetään yksittäisten indeksien ”carrya” kaupankäyntisignaalina. Strategia toteutetaan käymällä kauppaa futuurisopimuksilla, eli ostamalla korkean ”carryn” futuurisopimuksia ja lyhyeksi myymällä matalan ”carryn” futuurisopimuksia. Lopuksi lasketaan strategian tuotto summaamalla yhteen portfolion ”carry” ja sen arvonmuutos. Tulokset tästä tutkimuksesta osoittavat, että ”carry trade” -strategia osakemarkkinoilla tuottaa Sharpe-luvuksi 0.60, joka on merkittävästi korkeampi kuin passiivinen, osta-ja-pidä -strategia, jonka Sharpe-luku on 0.14. Tutkimuksen tulokset voidaan tiivistää kolmeen pääpointtiin. Ensinnäkin tulokset viittaavat siihen, että ”carry trade” konseptia voidaan laajentaa valuuttamarkkinoista osakemarkkinoille. Tutkimus osoittaa, että sijoittaja voi käytännössä hyötyä ostamalla korkean odotetun osinkotuoton omaavia indeksifutuureja ja lyhyeksi myymällä matalan odotetun osinkotuoton omaavia indeksifutuureja. Toiseksi, ”carry” on tärkeä osa odotettua tuottoa, koska se toimii sekä kaupankäyntisignaalina että kontribuoi tuottoon. Kolmanneksi, ”backtest” ja regressioanalyysi vahvistavat näyttöä kattamattoman korko-/osakepariteetin pitävyyttä vastaan, ja sitä kautta myös ”rationaaliset odotukset” -hypoteesia vastaan

Vietnam’s Perception and Response to the Emerging Indo-Pacific Regional Security Architecture

With the rising of the two emerging great power - China and India, the "Indo-Pacific" has already possessed the fundamental conditions of the regional security complex, while the United States as the hegemonic state intervenes in security affairs which takes advantage of characteristics of the identity structure and power structure of regional security complexes by penetration mechanism. Buzan's theory has shown us the contour of the emerging security architecture in the Indo-Pacific region. After applying the regional security complex theory to analyze the security of the region, this article analyzes Vietnam’s perception and response to the emerging Indo-Pacific security architecture. The article points out that the perception of regional security structure expressed through foreign policy adjustment can be basically divided into two layers: regional and extra-regional. In which the regional layer with the focus on ASEAN; and the extra-regional is ASEAN-centered multilateral groups. Since then, Vietnam has tried to incorporate its foreign policy calculations into the multilateral and multi-dimensional Indo-Pacific agenda. Vietnam's response manifests itself mainly in strengthening economic and trade cooperation with China, deepening security cooperation with the US and its network of allies, and with the help of the power of ASEAN to restrain the US and China. In addition, with its favorable geographical position and strong rise in recent years, Vietnam expects India to become an indispensable "security supplier" and an indispensable "balancing force" in Indo-Pacific regional security architecture

Fluorescent Receptors for Biomolecules

The development of synthetic receptors capable of high-affinity complexation of biologically relevant analytes in competitive solvent systems represents an ongoing challenge in molecular recognition. Anion recognition is particularly problematic, which is significant since numerous biological processes are regulated by anions, such as those resulting from phosphorylation. In this dissertation, we present the design and synthesis of a fluorescent sensor containing two cyclen groups that are preorganized to form a binding cleft for anion complexation. The receptor design includes a rigid acridine backbone, which is also exploited for fluorescence signal transduction. Furthermore, click chemistry is employed to facilitate receptor synthesis, and binding studies with various phosphorylated guest molecules are described. Additionally, the development of boronic acid-based carbohydrate receptors is presented. Carbohydrates play important roles in a large number of biochemical processes such as signal transduction and cell surface recognition events. The receptors will be used to study carbohydrate binding through Förster resonance energy transfer (FRET) and surface enhanced Raman spectroscopy (SERS). Another project involves the synthesis of aromatic compounds that can act as auxin herbicides. Auxins are plant hormones that play a major role in the regulation of plant growth and development. A modular synthetic strategy is employed to access a library of small molecules that will be tested for herbicidal activity on a variety of weeds. Finally, the work on the design and synthesis of molecular building blocks to generate covalently-bonded ordered organic frameworks is discussed

The Efficiency of the Er: YAG Laser and Photon- Induced Photoacoustic Streaming (PIPS) as an Activation Method in Endodontic Irrigation: A Literature Review

In the field of endodontics, lasers have been used for a long time for the optimization of Endodontic irrigation in particular. The laser-activated irrigation (LAI) technique is based on the photomechanical effects of the lasers at low settings. They create specific cavitation phenomena and acoustic streaming in intracanal fluids. More recently, a new technique with a Er:YAG laser has been used with sub-ablative energy (20 mJ, 15 Hz) and ultra-short pulses (50 μs). This leads to intracanal cavitation and shockwaves as a result of photoacoustic and photomechanical effects. This phenomenon is called photon-induced photoacoustic streaming (PIPS). PIPS and Laser activated irrigation are described in the literature as a revolutionary and powerful method to activate the irrigant; however, systematic literature on this topic is missing. This review compares the literature on Er:YAG LAI and PIPS on endodontic irrigation with other irrigation methods. An article search was performed on the PubMed database using a series of keywords related to endodontic irrigation, including Er:YAG LAI and PIPS; 59 articles were selected for the review according to the inclusion and exclusion criteria. No in vivo study was found. The Er:YAG LAI and PIPS outperformed other methods in 33 of the 59 articles. There was a great variety in the study designs including bacterial incubation time, laser parameters, irrigation protocols, and irrigating solution used. The evidence suggests that the Er:YAG LAI and PIPS are promising in canal disinfection as well as debris and smear layer removal. However, the large variety in the study methods makes the results less significant. Further studies are needed to better evaluate the efficiency of these techniques, especially in vivo studies

Relationship Between Foreign Direct Investment and Economic Growth: An Applied Research in Low Income, Lower Middle Income, Upper Middle Income, and High-Income Countries

This research aims to find the relationship between foreign direct investment (FDI) and economic growth at the global scale. The panel data, collected by the World Bank for a set of 135 countries over the period from 1990 to 2015, consists countries of four income groups – low, lower-middle, upper-middle, and high – based on gross national income (GNI) per capita. Linear regressions, which take the advantage of the ordinary least squares method, are used for estimating the unknown parameters. The results show that FDI has statistically significant and positive relationship with economic growth. Despite the development level, most countries have positive association with GDP growth. Based on these findings, some policies are recommended to attract more FDI and to use FDI resources more efficiently

Market Entry Strategy of Netflix in Czech Republic

Tato diplomová práce kriticky zkoumá analýzu vstupní strategie společnosti Netflix, který hodlá vstoupit na český trh, s cílem navrhnout vhodná doporučení. Práce obsahuje detailní analýzu společnosti a současného stavu trhu v České Republice. Kriticky přezkoumané teoretické rámce a aplikované analýzy jsou následně použity jako základ pro argumentaci a vyhodnocení problematiky strategie. Doporučení pro expanzi jsou poskytovány na základě vyhodnocených průzkumu a analýz.This diploma thesis critically review an analysis of a market entry strategy of Netflix, which intends to entry the Czech Market, with the objective to propose suitable recommendations. The thesis contains in-depth analysis of the company and current situation of market environment in Czech Republic. Theoretical frameworks are critically reviewed and conducted analysis is consequently used as a core for argumentation and evaluation of the strategic issue. Recommendations for expansion are given on the basis of conducted research and analysis.