Optimizing models of a stock portfolio issued by Financial Investment Companies

The complex methodology used in financial portfolio management proves that H. Markowitz optimization approach is one of the most applied techniques on developed global financial markets. Financial information spreading and processing speed, real time access to information, the performance maximization criterion for managed portfolios, are fundamental factors requiring higher reaction speed from the portfolio manager in order to take the appropriate strategic decisions. Sustained decision process requires specific applications and flexibility to present financial circumstances, a relevant example being Crystal Ball software. This paper intends to test in practice the facilities offered by Crystal Ball regarding a stock portfolio and to compare the results generated by Markowitz approach.capital market, portfolio optimisation,Financial Investments Companies

Market force of institutional investors on the Romanian capital market

The role of institutional investors in developing domestic capital markets and not only is well known in the economy. They support the financing process of different economical entities with deficits within the economy, providing long-term capital resources to the capital market. Therefore, they play a crucial role in the development of the country’s private sector. In this paper, the authors analyse the current situation of the institutional investors on the Romanian capital market and show their contribution to the economical development of a country from a theoretical point of view. The offered statistical information complete the general analysis made about the current position of institutional investors on the market.institutional investors, capital market, pension funds, investment companies

An empirical analysis on the impact of the development of the financial system upon the economic growth. The case of Romania and of the other states members of the European Union

This paper outlines the existing connection between the development of the financial system and the economic growth of an economy. Along the time, many authors have tried to bring empirical prove that this connection exists on the long term, and it is very strong especially for the developing countries being explained through the channel of investment and productivity. Beside giving the theoretical arguments for this connection, the authors make an empirical analysis using pool data regressions, taking into consideration the old member states and the new member states of the European Union, with a special focus on the Romanian case.G10, G20

Foreign Direct Investment and Regional Development in Romania

The regional integration of the Romanian economy implies the continuation of modernizing existent structures, expanding the new entrepreneurial culture and foster the individual competences for corresponding to the European model. Foreign direct investments represent the link between financial and productive systems, integrating them at a regional and global level. Beside the imported capital flows, they have a direct impact upon the management of the productive entities, assure a transfer of modern technologies, increase the level of occupation and the household available income, modifying the consumers culture. The regional development policy must ensure the reduction of disparities between the different levels of development of the Romanian regions through encouraging foreign direct investment capable of completing the little dimension of the local capital. Taking into consideration the movement of disparities to East and the fact that the increase of economical development disparity after the last two European Union enlargements did not involve a higher level of allocated funds, foreign direct investments remain an alternative for the disparity elimination and accelerating the restructuring marked by the globalizationregional development, socio-economical disparities, foreign direct investments

Steps in the development of the Romanian financial system and the corellation with the level of economical growth

Along the history it has been asserted that among the determinant agents of the economical growth can be also cited the conservation and the endowment with physical, technological and human capital. This thing involves the realization of certain investigations in the infrastructure, development, and innovation, as well as in the education and the formation, that can raise the existent level of these resources in every country and to lead to a growth in the productivity, and in the competition of that country materialized through a higher GDP of a capital. But there is an extremely important factor like the way of financing, the degree of development of the financial system of the economy that leads to economical growth. On a microeconomic level, in what concerns the economical agents, financing is the most important for the development. All in all, no matter how good the product or how efficient the commercialization channels or the correlation level between technology and the human factor may be, if the business does not have an efficient financing politics, regarding the liquidity as well as the solvency and the profitableness, it will crash minimizing the other successfully realized aspects. Except the fact that it offers an efficient allocation and a reduced cost of the financial services, a well developed financial compartment identifies the potential investors, monitors and gives information regarding the behavior of the beneficiaries of the chartered capital. The financial system unifies the capital demand and the offer through banks, capital markets, and other financial mediates like mutual funds or pension funds. An efficient financial system mobilizes the collected saving by the unities that, after they satisfy their own objectives of investment and consumption, have a financing capacity for channeling it towards those units that, for realizing their investing objectives, need financing, offer an efficient payment and clearing system, in this way facilitating the financial transactions. An efficient system is the one that realizes an optimum getting in and allocation of the resources, that it has realized in a satisfying manner the remuneration conditions, assurance, and liquidity of the equivalent deposits or the instruments of collecting the resources, and on the other hand, the cost conditions and financing term for the allocated resources. Until short time ago, it was believed that the financial system develops after the contracting sector, channeling towards investments, at the request of the undertaker, the over pluses obtained as a consequence of the economies of the population. Following what Schumpeter first expressed in 1912, recent theories showed that an efficient financial system is a stimulus for the technological innovation identifying and financing the undertakers capable to successfully innovate the product and the production process. One of those who have opted for this kind of thought is Ross Levine who assures the fact that “a theoretical as well as an empirical constant work volume tends to make even the most skeptical to believe that the development of the financial system is a determinant of the economical growth, and not only a passive answer to this growth.” Levine and the others that share his opinion believe that there are inherent relations between financial intermediate and productivity and , as the amelioration of the productivity level produces on a long term benefic effects on the level of economic development, it can be said that also the financial intermediate generates economical growth. Moreover, Levine suggests that the development of the financial system has an important positive effect over the economical growth saying that “it can be eliminated a third of the already existent inequality between the countries with an important growth and those with a slow growth through the development of the financial intermediation for the latter ones until they reach a developing level comparable with the one of the countries with a quick development”. The positive association between the degree of development of the financial system and economical growth was at large analyzed also by Demirguc-Kunt (2006), Levine and King (1993), and Levine and Beck (2004). They get to the conclusion that this correlation stays significant even when other factors of influence are taken into consideration. Moreover, they prove that regarding a country with a developing financial system, the degree of financial development is correlated not only with the current growth, but also with the future economical growth. In order to do a thorough analysis of the way in which the Romanian financial system evolved, being correlated with the economical growth of the financing structure of the Romanian economy between 1990 and 2006, we leveled this analysis depending on the mutations that took place during the time in the Romanian economical and financial landscape. We have taken one by one the mutations that took place during this period regarding the Romanian banking system and capital market, as main financial agents, then the macro economical politics and their impact on the development of the financial system, and, least but not last, recent evolutions experienced by the Romanian financial system and regional level (Central and Eastern Europe) and European Union comparisons.Romanian financial system, capital market, development

Pension funds – main institutional investor on the Romanian capital market?

In this article, the authors emphasize the very important role that institutional investors, under the form of pension funds, hold for the development of capital markets existing in the economy and for supporting the financing process of institutional sectors in the financing deficit situation. This important role is due mainly to the fact that they hold liabilities payable on a long term that assumes that they can finance the economy on a long term. Moreover, the regulations of the private pension system in each country assumes the mandatory idea of directing part of the private saving held by pension funds to the local capital markets. This thing transforms pension funds into very important players on the capital market, supporting it continuously. The authors realize a short presentation of the main theoretical and empirical studies supporting this is made, as well as a personal analysis of the connection between pension funds and the Romanian capital market development.capital market, institutional investors, pension funds, reform, Romania

Multiplying financing choices through capital markets

Considerable evidence shows that countries with the most developed financial sectors and capital markets enjoy the strongest economic growth over the long run. The non-financial sector, small and medium sized entities can access a wider availability of more innovative and lower cost finance to aid their growth, while larger companies profit from an overall reduction in the cost of capital and a wider range of financial products. These economical agents in search of alternatives for financing their projects demand the greatest level of flexibility regarding the use of the financing instruments available and this flexibility can determine the success or failure of such a project. Capital markets also facilitate the efficient allocation of savings to where it is most productive. They allow large numbers of investors to reduce their financial risks through diversification. By spreading risk widely, they also cushion the economy against economic and financial shocks.capital market, financial innovation, flexible financing decisions

The Need for Market Regulations and Hedge Funds Performance

The contemporary crisis has brought into attention the hedge funds activity, with respect to high performance achieved levels, management techniques employed and high professionalism of the management. Being focused on higher returns to the market indices, hedge funds differ substantially to traditional investment funds through the promoted investment strategies. In Europe, prior to the European Parliament’s Directive on Alternative Investment Funds Administrators (November 2010), hedge funds activity has been the subject of many controversial financial discussions. Alternative investment funds, especially hedge funds, private equity funds and venture capital funds have been held responsible to some extent for the global financial crisis. An increased transparency, through a more rigorous control on their activity, applying common regulations for all investment funds operating in the European area, provides the circumstances for increased financial stability and for a limited risk and increased investor protection workframe. This study considers the need for market regulations on hedge funds activity, while analyzing the defining characteristics of adopted investment strategies and their performance. The analysis is performed using the comparison approach in order to compare hedge funds performance to classic investment funds and market indices performance. The analyzed time period is 2000 – 2010, in terms of managed assets and rates of return achieved, benefits and disadvantages in the investment process.Hedge funds, regulations, investment strategies, compared performance

IMPACT OF FINANCIAL CRISIS UPON THE ROMANIAN CAPITAL MARKET AND PROPOSED MEASURES FOR ITS RELAUNCHING

Having in consideration that the entire world has changed itself in a globalized economy, characterized by a more and more integrated and connected financial system, it becomes pretty difficult that a financial crisis from a certain economy not to be sprecapital market, financial crisis, financing alternatives

The multinational companies - an institutional response to the changes in the technological market

The globalization process, from both a temporal and locational point of view, has led to changes in the human interrelations, to the unification and expansion of economical activities over the regions and countries. The Romanian economy is depending strongly on the decisions made by large multinational companies that influence upon its integration in the international productive system. Setting up subsidiaries of these multinational companies in Romania is determined by cheap working factors, adaption of the production to the local market demand, penetration of the Romanian market and of the regional markets, an increase in the global effiency at the level of such multinational company. The cross-border inflows of foreign direct investments contribute to the technological transfer, to an increase of the productivity, a better allocation of capital, a significant increase in the exports and of the quality of the life. The foreign direct investments realized in Romania have led to a visible bettering of the country rating and of the economical performances. The technological transfers performed by multinational companies generate positive spillovers through the reduction of the productivity disparities, the accorded technical assistance, the continuous process of formation of the qualified personnel and managers. The mechanisms through which technological spillovers are realized, are represented not only by the foreign direct investments made by multinational companies, but also by the strategic alliances, licence buying, licence change and the assistance accorded by foreign counselors, foreign and local suppliers of new materials, products and equipments. Despite the fact that the process of taking over new technologies by Romanian firms depends mainly on the decision of multinational companies, the success of technological transfers depends on the efforts made in the direction of taking over, assimilation, and bettering these absorbed technologies, and also by the level of training of the personnel. To conclude with, the technological transfer traffic is not free within the multinational firms and far less, outside them. Consequently, the Romanian economy can beneficiate only by a part of the scientifical and technological know-how. This is kept and conducted by the multinational companies and controled by them. The capacity of absorbtion of the new technologies depends on the relations that multinational subsidiaries keep with the local research centres, the economical politics promoted by subsidiaries as far as concerns the recruitment and the profesional formation, the purchase of products realized from the local suppliers, the sales realized on the Romanian market, the state policies concerning the attraction of foreign direct investment and the help accorded to the research and industrial innovation. This dispersion of technologies generates a reallocation of the working places, productivity externalities for the Romanian companies, know-how, and some imitative processes regarding the formation strategies of employees from the multinational companies.multinational companies, foreign direct investments, technological transfer