Capital structure and stock returns: Evidence from an emerging market with unique financing arrangements

We investigate capital structure dynamics in a unique financing environment where (1) we avoid the complex tax environments faced by previous studies and where (2) firms rely primarily on bank loans rather than the public debt market.Consistent with recent empirical evidence, we find that stock returns are a first-order determinant of capital structure. Firms show some tendency to rebalance towards their target capital structure. However, the impact of stock returns dominates the effects of rebalancing. We also find that firm\u27s stock returns induce some corporate issuing activity, and managers use issuing activity to counteract some of the mechanistic effects of stock returns

Dividend smoothing when firms distribute most of their earnings as dividends

Due to its distinctive institutional background, Oman offers a valuable opportunity to investigate the stability of the dividend policy. In Oman, (1) there are no taxes on dividends, (2) firms are highly levered mainly through bank loans, (3) there is a high concentration of stock ownership and (4) there is variability in cash dividend payments. These factors suggest a diminished role of dividend smoothing in Oman. Our results show that Omani financial firms have erratic dividend policies. These results are inconsistent with the predictions suggested by the relatively weak corporate governance, government ownership and dividend signalling

A nullimorphic ERLIN2 mutation defines a complicated hereditary spastic paraplegia locus (SPG18)

Hereditary Spastic Paraplegia (HSP) is a clinically and genetically heterogeneous group of neurological disorders that are characterized by progressive spasticity of the lower extremities. We describe an extended consanguineous Saudi family in which HSP is linked to SPG18, a previously reported autosomal recessive locus, and show that it is associated with a nullimorphic deletion of ERLIN2, a component of endoplasmic reticulum associated degradation. This finding adds to the growing diversity of cellular functions that are now known to be involved in the maintenance of the corticospinal tract neurons

Heritability and genetic correlations of heart rate variability at rest and during stress in the Oman Family Study

Introduction:Individual differences in heart rate variability (HRV) can be partly attributed to genetic factors that may be more pronounced during stress. Using data from the Oman Family Study (OFS), we aimed to estimate and quantify the relative contribution of genes and environment to the variance of HRV at rest and during stress; calculate the overlap in genetic and environmental influences on HRV at rest and under stress using bivariate analyses of HRV parameters and heart rate (HR).Methods:Time and frequency domain HRV variables and average HR were measured from beat-to-beat HR obtained from electrocardiogram recordings at rest and during two stress tests [mental: Word Conflict Test (WCT) and physical: Cold Pressor Test (CPT)] in the OFS - a multigenerational pedigree consisting of five large Arab families with a total of 1326 participants. SOLAR software was used to perform quantitative genetic modelling.Results:Heritability estimates for HRV and HR ranged from 0.11 to 0.31 for rest, 0.09-0.43 for WCT, and 0.07-0.36 for CPT. A large part of the genetic influences during rest and stress conditions were shared with genetic correlations ranging between 0.52 and 0.86 for rest-WCT and 0.60-0.92 for rest-CPT. Nonetheless, genetic rest-stress correlations for most traits were significantly smaller than 1 indicating some stress-specific genetic effects.Conclusion:Genetic factors significantly influence HRV and HR at rest and under stress. Most of the genetic factors that influence HRV at rest also influence HRV during stress tests, although some unique genetic variance emerges during these challenging conditions

Novel SPG11 mutations in Asian kindreds and disruption of spatacsin function in the zebrafish

Autosomal recessive hereditary spastic paraplegia with thin corpus callosum (HSP-TCC) maps to the SPG11 locus in the majority of cases. Mutations in the KIAA1840 gene, encoding spatacsin, have been shown to underlie SPG11-linked HSP-TCC. The aim of this study was to perform candidate gene analysis in HSP-TCC subjects from Asian families and to characterize disruption of spatacsin function during zebrafish development. Homozygosity mapping and direct sequencing were used to assess the ACCPN, SPG11, and SPG21 loci in four inbred kindreds originating from the Indian subcontinent. Four novel homozygous SPG11 mutations (c.442+1G>A, c.2146C>T, c.3602_3603delAT, and c.4846C>T) were identified, predicting a loss of spatacsin function in each case. To investigate the role of spatacsin during development, we additionally ascertained the complete zebrafish spg11 ortholog by reverse transcriptase PCR and 5′ RACE. Analysis of transcript expression through whole-mount in situ hybridization demonstrated ubiquitous distribution, with highest levels detected in the brain. Morpholino antisense oligonucleotide injection was used to knock down spatacsin function in zebrafish embryos. Examination of spg11 morphant embryos revealed a range of developmental defects and CNS abnormalities, and analysis of axon pathway formation demonstrated an overall perturbation of neuronal differentiation. These data confirm loss of spatacsin as the cause of SPG11-linked HSP-TCC in Asian kindreds, expanding the mutation spectrum recognized in this disorder. This study represents the first investigation in zebrafish addressing the function of a causative gene in autosomal recessive HSP and identifies a critical role for spatacsin during early neural development in vivo

One size fits all? High frequency trading, tick size changes and the implications for exchanges: market quality and market structure considerations

This paper offers a systematic review of the empirical literature on the implications of tick size changes for exchanges. Our focus is twofold: first, we are concerned with the market quality implications of a change in the minimum tick size. Second, we are interested in the implications of changes in the minimum tick size on market structure. We show that there is a large body of empirical literature that documents a decrease in transaction costs following a decrease in the minimum tick size. However, even though market liquidity increases, the incentive to provide market making activities decreases. We document a strong link between the minimum tick size regulations and the recent increase in high frequency trading activity. A smaller tick enhances the price discovery process. However, the question of how multiple tick size regimes affect market liquidity in a fragmented market remains to be answered. Finally, we identify topics for future research; we discuss the empirical literature on the minimum trade unit and the recent calls for a minimum resting time for quotes

The information content of cash dividend announcements in a unique environment

Due to its distinctive institutional background, Oman offers a valuable opportunity to examine stock price reactions to dividend announcements. In Oman, (1) there are no taxes on dividends and capital gains, (2) there is a high concentration of share ownership, (3) there is low corporate transparency, and (4) firms frequently change their dividends. Our results show that announcements of dividend increases are associated with increased stock prices, while announcements of dividend decreases cause decreases in stock prices. Firms that do not change their dividends experience insignificant negative returns. These results contradict tax-based signaling models, which argue that higher taxes on dividends relative to capital gains are a necessary condition for dividends to be informative

Dividend stability in a unique environment

Purpose - This paper aims to examine the stability of dividend policy using a unique data set. Design/methodology/approach - The paper is based on the Lintner model that is used to test the dividend smoothing behavior. The specific econometric method used for panel data is Tobit regression. Findings - The evidence shows that Omani firms adopt a policy of smoothing dividends. This stability of dividends does not support the predictions suggested by the high bank leverage, absence of taxes, and the variability of dividend payments in Oman. Research limitations/implications - This study highlights the need for further research in order to examine whether these results have any effect on dividend initiations and omissions in Oman. Practical implications - The findings of this study show that there are differences in dividend policies between the Omani companies and those in developed markets. Potential investors in the Omani market should be aware about these differences in making their investment decisions. Originality/value - This paper examines stability of dividend policy in a unique environment where firms distribute almost 100 percent of their profits in dividends, firms are highly levered mainly through bank loans, there are no taxes on dividends and capital gains, and there is variability in cash dividend payments. These factors suggest a diminished role of dividend stability in Oman. It is an empirical issue to examine whether this is indeed true. The authors are not aware of any other study on dividend stability using data with these unique factors

Market risk disclosures and corporate governance structure: Evidence from GCC financial firms

© 2017 Board of Trustees of the University of Illinois. In this study, we examine the relationship between corporate governance and the disclosure of market risk among financial firms from the Gulf Cooperation Council (GCC) region between 2007 and 2011. Using a comprehensive measure of the disclosure of market risk, our regression results suggest that the level of market risk disclosure is positively and significantly associated with the strength of a firm's corporate governance structure. Economically, the regression coefficient implies that a 3.25% increase in market risk disclosures is associated with a one standard deviation change in the strength of corporate governance. In addition, when we decompose our corporate governance index into its constituent items, we find that directors' independence and the dual roles of the CEO and chairman of the board reduce the extent and quality of market risk disclosures. Our results are robust to alternative specifications and endogeneity tests