Short-term Price Behavior and the Effect of Foreign Investors in Finnish Equity Markets (summary section only)

As globalization and capital free movement has increased, so has interest in the effects of that global money flow, especially during financial crises. The concern has been that large global money flows will affect the pricing of small local markets by causing, in particular, overreaction. The purpose of this thesis is to contribute to the body of work concerning short-term under- and overreaction and the short-term effects of foreign investment flow in the small Finnish equity markets. This thesis also compares foreign execution return to domestic execution return. This study’s results indicate that short-term under- and overreaction occurs in domestic-buy portfolios (domestic net buying) rather than in foreign-buy portfolios. This under- and overreaction, however, is not economically meaningful after controlling for the bid-ask bounce effect. Based on this finding, one can conclude that foreign investors do not have a destabilizing effect in the short-term in the Finnish markets. Foreign activity affects short-term returns. When foreign investors are net buyers (sellers) there are positive (negative) market adjusted returns. Literature related to nationality and institutional effect leads us to expect these kind of results. These foreign flows are persistent at a 5 % to 21 % level and the persistence of foreign buy flow is higher than the foreign sell flow. Foreign daily trading execution is worse than domestic execution. Literature which quantifies foreign investors as liquidity demanders and literature related to front-running leads us to expect poorer foreign execution than domestic execution.

How Do Different Types of Investors React to New Financial Statement Information?

The study contributes to our understanding of the forces that drive the stock market by investigating how different types of investors react to new financial statement information. Using the extremely comprehensive official register of share holdings in Finland, we find that the majority of investors are more probable to sell (buy) stocks in a company after a positive (negative) earnings surprise, and show a bias towards buying after the disclosure of new financial statement information. Large investors, on the other hand, show behavior opposite to that of the majority of investors in the market. Further, foreign investors show behavior similar to that of domestic investors. We suggest investor overconfidence and asymmetric information as possible explanations for the documented behavior.

Overconfidence and investor size

Recent research documents that institutional or large investors act as antagonists to other investors by showing opposite behavior following disclosure of new information. Using an extremely comprehensive official transactions data set from Finland, we set out to explore the interrelation between investor size and behavior. More specifically, we test whether investor size is positively (negatively) correlated with investor reaction following positive (negative) news. We document robust evidence of that investor size affects investor behavior under new information, as larger investors on average react more positively (negatively) to good (bad) news than smaller investors. In the light of this study it seems increasingly feasible that several recent findings of heterogeneous investor behavior are functions of differences in overconfidence.

Achievement and Social Strategies and the Cumulation of Positive and Negative Experiences During Young Adulthood

These longitudinal studies focused on investigating young adults during transition into a new educational environment. The aims were to examine: (1) what kinds of achievement and social strategies young adults deploy, (2) whether the deployment of these strategies predicts people's success in their studies, their life events, their peer relationships, and their well-being, (3) whether young adults' success in dealing with educational transition (e.g. success in studies, life events, peer relationships and well-being) predict changes in their strategies and well-being, and (4) the associations between young adults' social strategies, interpersonal behaviour, person perception, and their peer relationships and satisfaction with them. The participants were students from Helsinki university and from two vocational institutes (the numbers ranging between 92 and 303). The results revealed that achievement and social strategies contributed to individuals' success in dealing with both the academic and interpersonal challenges of a new environment. Social strategies were also associated with online interpersonal behaviour and person perception, which mediated their impact on peer relationships. Achievement and social strategies changed as a result of environmental feedback. However, they also showed high stability, forming reciprocal and cumulative associations with the feedback the individuals received about their success in dealing with educational transition: the use of functional strategies, such as optimistic, defensive-pessimistic and planning-oriented strategies, increased their success, which in turn enhanced their well-being and further deployment of functional strategies. The opposite was true in the case of dysfunctional strategies, such as self-handicapping and avoidance. Key words : Achievement strategies, social strategies, transition, young adults, life events, sociometric status, social behaviour, person perception, well-being.

Stress responses of Gram-positive bacteria to cationic antimicrobial peptides

As the resistance of bacteria to conventional antibiotics has become an increasing problem, new antimicrobial drugs are urgently needed. One possible source of new antibacterial agents is a group of cationic antimicrobial peptides (CAMPs) produced by practically all living organisms. These peptides are typically small, amphipathic and positively charged and contain well defined a-helical or b-sheet secondary structures. The main antibacterial action mechanism of CAMPs is considered to be disruption of the cell membrane, but other targets of CAMPs also exist. Some bacterial species have evolved defence mechanisms against the harmful effects of CAMPs. One of the most effective defence mechanisms is reduction of the net negative charge of bacterial cell surfaces. Global analysis of gene expression of two Gram-positive bacteria, Bacillus subtilis and Staphylococcus aureus, was used to further study the stress responses induced by different types of CAMPs. B. subtilis cells were treated with sublethal concentrations of a-helical peptide LL-37, b-sheet peptide protegrin 1 or synthetic analogue poly-L-lysine, and the changes in gene expression were studied using DNA macroarrays. In the case of S. aureus, three different a-helical peptides were selected for the transcriptome analyses: temporin L, ovispirin-1 and dermaseptin K4-S4(1-16). Transcriptional changes caused by peptide stress were examined using oligo DNA microarrays. The transcriptome analysis revealed two main cell signalling mechanisms mediating CAMP stress responses in Gram-positive bacteria: extracytoplasmic function (ECF)sigma factors and two-component systems (TCSs). In B. subtilis, ECF sigma factors sigW and sigM as well as TCS LiaRS responded to the cell membrane disruption caused by CAMPs. In S. aureus, CAMPs caused a similar stress response to antibiotics interfering in cell wall synthesis, and TCS VraSR was strongly activated. All of these transcriptional regulators are known to respond to several compounds other than CAMPs interfering with cell envelope integrity, suggesting that they sense cell envelope stress in general. Among the most strongly induced genes were yxdLM (in B. subtilis) and vraDE (in S. aureus) encoding homologous ABC transporters. Transcription of yxdLM and vraDE operons is controlled by TCSs YxdJK and ApsRS, respectively. These TCSs seemed to be responsible for the direct recognition of CAMPs. The yxdLM operon was specifically induced by LL-37, but its role in CAMP resistance remained unclear. VraDE was proven to be a bacitracin transporter. We also showed that the net positive charge of the cell wall affects the signalrecognition of different TCSs responding to cell envelope stress. Inactivation of the Dlt system responsible for the D-alanylation of teichoic acids had a strong and differential effect on the activity of the studied TCSs, depending on their functional role in cells and the stimuli they sense.