Value based corporate finance in the secondary sector in Greece

The purpose of the present research is to evaluate the value creation capacity of the secondary sector firms, listed in the Athens Stock Exchange over the period 2000 – 2004, using the Economic Value Added Model developed by Stern Stewart & Co. The percentage of the sample firms with a negative Economic Value Added ranges from 48% to 61%; the majority of the firms experience positive return on the capital invested, but this is not enough to cover their weighted average cost of capital. Two industries have positive average Economic Value Added in all five years, while the remaining two have positive average Economic Value Added in only two years. All industries in all five years have positive average return on the capital invested, however some of them have disproportionately high weighted average cost of capital.peer-reviewe

Leverage and returns in three countries of Southern European region

This paper aims to investigate the impact of leverage on stock returns in three southern European countries, members of the Euro zone, Greece, Italy and Portugal from 2000 to 2010. The portfolio level analysis is performed both on a full sample basis and on an industry basis. The main contribution of our work is that we enhance the capital structure studies by broadening the limited work that has been accomplished on the base of leverage as an explanatory variable of returns. At the industry level analysis, a significant positive leverage effect is isolated only at Consumer Goods and Health Care industries in Italy and at Industrial sector in Portugal. In Greece, the industry effect of leverage is almost negligible.peer-reviewe

Interest rate fluctuations and the UK financial services industry

The article explores the relationship between short-term interest rates and the equity returns of the UK financial services industry. Based on the arbitrage pricing theory, the present study seeks to answer the sensitivity and pricing questions. The former is tested with a linear two-index model attempting to identify any interest rate risk exposure of these stock returns. The latter, however, is examined using a nonlinear multivariate analysis based on the Seemingly Unrelated Regression Equations (SURE) model by imposing cross- and within-equation constraints on the estimated parameters. The econometric analysis unveils a significant negative interest rate effect and the existence of a risk premium incorporated in the expected returns of portfolios consisting of these stocks

Interest rate fluctuations and the UK financial services industry

The article explores the relationship between short-term interest rates and the equity returns of the UK financial services industry. Based on the arbitrage pricing theory, the present study seeks to answer the sensitivity and pricing questions. The former is tested with a linear two-index model attempting to identify any interest rate risk exposure of these stock returns. The latter, however, is examined using a nonlinear multivariate analysis based on the Seemingly Unrelated Regression Equations (SURE) model by imposing cross- and within-equation constraints on the estimated parameters. The econometric analysis unveils a significant negative interest rate effect and the existence of a risk premium incorporated in the expected returns of portfolios consisting of these stocks.

A practical approach to blend insurance in the banking network

Purpose – The purpose of this paper is to look at the main empirical findings related to the bank-insurance model and to outline the market practices across the world. The market dynamics underpinning the bancassurance phenomenon are analyzed alongside discussions of the various bancassurance products and bank-insurance modes of entry. Design/methodology/approach – The paper presents a brief survey of the bank-insurance trend and provides an insight into the underlying dynamics and corporate structures of financial conglomerates. Findings – There is an uneven success of the bancassurance phenomenon across the world. It is not clear whether re-regulation is the cause or response to globalization, and vice versa, which in turn both shape the bancassurance arena. A number of incentives for the formation of financial conglomerates are identified. Finally, three modes of entry have been documented to reflect market realities. Originality/value – The paper will be of value to those interested in financial conglomerates, banking and insurance. It is suitable for academics and practitioners alike.Banks, Financial institutions, Insurance services