Causal Nexus between Commodity Derivatives Market Reforms and Economic Growth – Evidence from Indian Agricultural Sector

This paper attempts to study the growth in agricultural commodity derivatives market and its impact on economic growth in India. Commodity forward market has witnessed radical changes since independence. Government of India formed many committees to review working of forward trading in the country. Prof. A D Shroff Committee was constituted to propose a bill on forward contracts and finally in December 1952 Forward Contracts (Regulation) Act, was enacted. Dantwalla committee was appointed in 1966 to assess the working of co-operative marketing system. The Khusro Committee in June 1980 gave recommendations to reintroduce commodity futures trading in most of the major commodities. In 1994 Prof K N Kabra committee gave recommendations for reopening of futures trading in major commodities. The committee also suggested the pepper and castor seed trading exchanges to upgrade their operations to the level of international futures markets. The impact of growth in agricultural commodity futures on agricultural GDP is test by taking last ten years quarterly data of aggregate traded agricultural commodity futures across major exchanges and economic growth as measured by the sectoral quarterly GDP has been taken for study. The time series stationarity of commodity trade volume and GDP quarterly data has been tested using Augmented Dickey Fuller (ADF) and Phillip Perron (PP) tests and confirmed that the data is stationary. Linear regression results confirm significant influence of agricultural commodity futures trading on agricultural GDP in India. Keywords: Forward market, Economic growth, Committees, stationarity test, linear regression JEL category: G23, G2

Sustainability and Efficiency of Micro Finance Institutions – Evidence from Selected Listed Companies in India

Financial inclusion means that delivering financial services to all needy people at an effective and efficient manner unconditionally, and at an affordable cost. Micro finance institutions are playing an imperative role in financial inclusion and societal development.  As part of financial inclusion it is envisaged that every person living in rural India should have access to finance.  Many micro finance institutions in India are striving towards this objective and are facing many challenges in providing finance for rural people. MFI are abstracted with the capital requirements and high NPA due to non collateral lending. It also involves high transactional cost. With the objective of serving the poor, MFI has to sustain them with profitability and expand their outreach. It is observed from the top five listed MFI in India, that the listed MFI has better capital adequacy ratio and financial performance as compared to non listed firms, and has enhanced outreach to rural Indians over the years. Keywords: Financial inclusion, Financial Performance, Sustainability, Capital Adequacy ratio JEL category: G23, G2

Corporate Ownership and Stock Price Volatility: An Empirical Study

This paper investigates the relationship between the firm ownership structure and price volatility. Ownership structure consists of promoter holdings, public shareholdings, institutional and non institutional holdings. Selected 26 Information Technology firms sample was taken for the study and it is found that largest shareholder in this sector is promoter and promoter group, who hold more than 45% stake in the firm. Public shareholding is the second largest. Institutional and non institutional investors have less than 25% shareholdings. Volatility is measured using standard Deviation and GARCH (1,1) is used to check the volatility persistence. It is found that price volatility is not significantly influenced by the firm ownership structure. This agrees with the notion that the price volatility is largely influenced by external macro economic variables and speculative forces of the market and internal factors like leverage and ownership structure has no significant influence on stock price volatility. Keywords: Ownership structure, volatility, GARCH, Promoter holdings JEL category: G23, G2

A Study on Perception of Informed Investors on Corporate Announcements

This study aims to find the perception of informed investors about corporate announcements of listed stocks in Indian market. To understand what informed investors perceive about the corporate events announcements like Bonus, stock split and right issue, three dimensions to perception were developed viz., awareness about various corporate actions announcements, perception towards wealth effect of bonus, stock split, and right issue announcement, and with final sample of 211 informed investors analysis were made using correlation, anova, regression. This study has empirically analyzed the perceptions of the respondents, based on social, economic, and demographic characteristics, on awareness about various corporate actions announcements, perception towards wealth effect of bonus, stock split, and right issue announcement, and perception towards risk association of wealth effect of corporate action announcement. Further, this chapter has also analyzed inter-relationship among core variables namely awareness about various corporate actions announcements, perception towards wealth effect of bonus, stock split, and right issue announcement, and perception towards risk association of wealth effect of corporate action announcement. Based on the results it can be concluded that perception towards wealth effect of bonus, stock split, perception towards risk association of wealth effect of corporate action announcement have significant impact on awareness about corporate actions announcements. Keywords: Investors perception, corporate actions, bonus, stock split and right issue JEL category: G23, G2

Market Efficiency around Bonus, Stock Split and Rights Issue Announcement – Evidence from India

Information content and market reaction to corporate announcement is imperative information for optimizing shareholders value. This study attempts to verify the market efficiency around three announcements i.e. bonus, stock split and rights issue, using standard event study methodology taking sample firms from Nifty Index. It attempts to verify whether there is any excessive abnormal return during event window. Abnormal returns were calculated by using market model and t-tests were conducted to test the significance. The result shows existence of significant positive abnormal return on announcement day of bonus and negative abnormal return for stock split and rights issue event. It also finds the existence of positive abnormal return surrounding announcement day for all the three events. Findings confirm with the results of earlier research and affirm that there is semi strong market efficiency and conclude that corporate announcement has effect on stock returns and shareholders’ value. Keywords: Market efficiency, Abnormal returns, market reaction, event study methodology JEL category: G23, G2

Causal Nexus Between Ownership Structure And Stock Price Volatility – Evidence From Listed Service Sector Firms In India

This paper investigates the causal nexus between the pattern of ownership structure in Indian service sector companies and its stock price volatility. Ownership structure consists of promoter holdings, public shareholdings, institutional and non institutional holdings. Media and entertainment sector 16 listed firms sample was taken for the study and it is found that largest shareholder in this sector is promoters, who hold more than 58% stake in the firm. Public shareholding is the second largest. Institutional and non institutional investors have less than 25% shareholdings. Volatility is measured using standard Deviation and GARCH (1,1) is used to check the volatility persistence. It is found that price volatility is not significantly influenced by the firm ownership structure. This agrees with the notion that the price volatility is largely influenced by external macro economic variables and speculative forces of the market and internal factors like leverage and ownership structure has no significant influence on stock price volatility. Key Words: Ownership structure, volatility, GARCH, Promoter holdings JEL category: G23, G2

Ownership Structure and Market Liquidity – Sectorial Evidence From India

A firm’s ownership consists of shares held by promoters, public, institutions and other bodies. Ownership concentration in fewer hands leads to amplified agency cost and information asymmetry and impinge on the firm’s performance and market liquidity. Given the large number of liquidity measures and methodologies employed both by practitioners and academic researchers, this paper examines the market liquidity using impact cost, turnover ratio and coefficient of elasticity of trading. Looking at the logic behind their construction, and how they relate to each other and its relation with constituents of firm’s ownership structure, this study also attempts to find the relationship between the ownership structure and liquidity indicators. NSE Banking index stocks were taken as the sample for the period from July 2013 to June 2014. It is observed that the market liquidity as measured by impact cost and turnover ratio is not influenced by promoter group holding, institutions shareholders and non institutions shareholders and it confirms the findings of Paul Brockman, Dennis Y. Chung, and Xuemin (Sterling) Yan (2009). However, promoter group holding and institutions shareholding are significant explanation variables for market liquidity as measured by coefficient of trading model. The granger causality test confirms that public shareholding granger cause coefficient of elasticity of trading. It also shows that there is no causal relationship between promoter group holding, public shareholding, institutions shareholding, non institutions shareholding, and impact cost and turnover ratios. Keywords: ownership structure, market liquidity, impact cost, granger causality

Nexus between Ownership Structure and Stock Liquidity Evidence from Indian Service Sector

This study attempts to find relationship between the firm ownership structure and stock liquidity. Data for this study is taken from the listed stocks of National stocks exchange which are the constituents of CNX500 index, and it includes 74 financial sector, 26 Information technologies and 7 telecommunication sector companies. The sample data for the study is taken from 2009 to 2015 and stock liquidity is measured by using Amihud illiquidity ratio (2002) and turnover ratio. Concentration of ownership in few hands means less liquidity.  It is found that public is the largest shareholder in case of Information technology firms with equal representation from institutions and non institutional holdings and has enhanced liquidity as measured by amihud illiquidity ratio compared to financial service and telecommunication sector. Independent variables like percentage of shares held by mutual fund institutions, financial Institutions, Insurance companies, FII, Individuals holding less than 1 lakh, and Individuals holdings more than 1 lakh have significant positive influence on stock liquidity. The study found that public concentration of firm ownership lead to better liquidity as it enhances the frequency of trade. Higher promoter shareholdings affect the liquidity adversely. Public shareholdings and turnover ratio are highly correlated; indicating better liquidity for shareholders and financial service stocks have superior liquidity compared to Information technology and telecommunication stocks. Keywords: Ownership structure, stock liquidity, Amihud Illiquidity ratio Promoter holdings JEL category: G23, G2

Determinants of Capital Structure –Evidence from Listed Information Technology Firms in India

This paper studies the leverage decisions of Indian information technology (IT) sector firms. It attempts to explain the variation in capital structure of IT firms and determining variables using a regression model. It aims to explore the various factors that determine the choice of long term financing for listed firms. The impact of firms’ tangibility, size, profitability, liquidity and earning variability on capital structure of listed Information Technology is investigated. Data of 30 IT firms from 2009-2014 is studied through regression analysis. Multi co-linearity test was performed at first to find out any relation among variables and it was found that none of the variables are strongly correlated, then regression test was run. Profitability is reported to have significantly negative impact while other factors have insignificant positive effect on capital structure. The results are mostly consistent with much of the previous literature. The outcome shows that all these determinants affect the capital structure of a firm in some degree. The study also indicates that firm leverage is positively related to median industry leverage. Additionally, firm size and growth opportunities have positive relationship with firm leverage. On the other hand, profitability and leverage are negatively related. The results support pecking order theory as higher profitability firms tend to have less debt and firms with higher growth opportunities tend to have greater leverage. Keywords: Leverage, liquidity, profitability, regression, tangibility

TRIBOPERFORMANCE OF SILICON DIOXIDE FILLED GLASS FABRIC REINFORCED EPOXY COMPOSITES

ABSTRACT The article presents the results of experimental investigation on the mechanical and two-body abrasive wear behaviour of silicon dioxide (SiO 2 ) filled glass fabric reinforced epoxy (G-E) composites. Silicon dioxide filled G-E composites containing 5, 7.5 and 10 wt % were prepared by compression moulding technique. The mechanical properties such as tensile strength and modulus were investigated in accordance with ASTM standards. Two-body abrasive wear studies were carried out using pin-on-disc wear tester under multi-pass condition against the water proof silicon carbide abrasive paper. From the experimental investigation, it was found that the presence of SiO 2 filler improved the tensile strength and modulus of the G-E composite. Inclusion of SiO 2 filler reduced the specific wear rate of G-E composite. The results show that in abrasion mode, as the filler loading increases the wear volume loss deceases and increased with increasing abrading distance. The excellent wear resistance was obtained for SiO 2 filled G-E composites. Furthermore, 10 wt % filler loading gave a very low volume loss