Is There Seasonality in the Sensex Monthly Returns?

The presence of the seasonal or monthly effect in stock returns has been reported in several developed and emerging stock markets. This study investigates the existence of seasonality in Indias stock market. It covers the post-reform period. The study uses the monthly return data of the Bombay Stock Exchanges Sensitivity Index for the period from April 1991 to March 2002 for analysis. After examining the stationarity of the return series, we specify an augmented auto-regressive moving average model to find the monthly effect in stock returns in India. The results confirm the existence of seasonality in stock returns in India and the January effect. The findings are also consistent with the "tax-loss selling" hypothesis. The results of the study imply that the stock market in India is inefficient, and hence, investors can time their share investments to improve returns.

The Expected Stock Returns of Malaysian Firms: A Panel Data Analysis

We used panel data set of 1729 observations (247 Malaysian companies listed on the Kuala Lumpur Stock Exchange for 1993-2000) to identify variables that could explain expected returns of Malaysian stocks. Our results are based on the fixed effects regression model as it performed better than the random effects model and OLS model without the firm effects. Results of the fixed-effect univariate regressions indicated that beta, size, book-to-market value (B/M) ratio, earnings-price (E/P) ratio and dividend yield individually played a significant role in explaining stock returns and payout and leverage had no effect. The explanatory power of size (natural log of market capitalisation) was the highest. The fixed-effect multivariate regression results showed that size was persistently a significant dominant variable together with other variables in explaining stock returns. Beta was found to have consistently a positive relation with stock returns by itself and together with other variables. But its explanatory power was less than size and other variables. Contrary to the results of Fama and French (1992), B/M ratio was not persistently a significant variable; its significance disappeared when we incorporated size and E/P ratio in regression.

Capital Structure and MarketPower

This paper provides new insights on the way in which the capital structure and market power and capital structure and profitability are related. We predict and show that capital structure and market power, as measured by Tobins Q, have a cubic relationship. That is, at lower and higher ranges of Tobins Q, firms employ higher debt, and reduce their debt at intermediate range. This is due to the complex interaction of the market conditions, agency problems and bankruptcy costs. We also show saucer-shaped relation between capital structure and profitability because of the interplay of agency costs, costs of external financing and debt tax shield. To our knowledge, we are the first to uncover these results.

Dividend Behaviour of Indian Companies Under Monetary Policy Restrictions

In this study we examine the dividend behaviour of Indian companies. We use GMM estimator, which is the most suitable methodology in a dynamic setting. Our results show that the Indian firms have lower target ratios and higher adjustment factors. The most significant result is that the restricted monetary policies have significant influence on the dividend behaviour of Indian firms, causing about 5-6 percent reduction in the payout ratios. The significance of macro economic policy variable suggest that monetary policy restrictions do have impact on cost of raising funds, and the information asymmetry between lenders and borrowers increases that forces companies to reduce their dividend payout.

Experimental Performance Analysis of Diesel Engine without Ceramic Coating on Cylinder Liner

Automobile industries faces big problem related to fuel economy, engine efficiency and emission which is harmful to the environment as well as human. In diesel engine one–third fuel energy is converted into the useful work otherwise diesel engine rejects about two third of heat energy of fuel i.e. one third to exhaust and one third to coolant. Due to rise of fuel cost major challenges for automobile industry is to decrease the fuel consumption, exhaust emissions without compromising efficiency. The performance of internal combustion engine can be improve by reducing frictional losses as well as reduction in specific fuel consumption of fuel during the engine operation. Exhaust emission can be reduced by complete combustion of fuel which is obtained by complete combustion of fuel due to high combustion temperature inside the combustion chamber. These things can be obtain by ceramic materials which have low thermal conductivity, less weight, corrosion resistance, wear resistance and shock resistance etc. the objective is to improve the performance of four stroke single cylinder diesel engine by providing ceramic coating on cylinder liner to know the effect of coating on the performance of diesel engine

What Drives the Shareholer Value?

In the strategy literature a lot of emphasis is placed on growth as a dominant business strategy. Is growth always desirable? The finance literature, on the other hand, focuses more on economic profitability and value. This study empirically explores the significance of profitability and growth as drivers of shareholder value, measured by the market-to-book value (M/B) ratio. Profitability is defined as economic profitability; that is, spread between return on equity and the risk-adjusted cost of equity. Using panel data and employing the GMM estimator, our findings show a strong positive relationship between economic profitability and M/B ratio. Growth, on the other hand, is negatively related to M/B ratio. However, the economic profitability-growth interaction variable has a positive coefficient indicating that growth associated with economic profitability influences shareholder value positively. This finding is further supported when we analyse the relationships separately for the positive-spread firms and negative-spread firms. Our results also indicate negative relationship between M/B ratio and firm size and positive relation with business risk, financial risk and capital intensity.