Reviewing the impact of the 2008/2009 global financial crisis (GFC) on international property markets and property professions

The global financial crisis that impacted on all world economies throughout 2008 and 2009. This impact has not been confined to the finance industries but has had a direct and indirect impact on the property industry worldwide from both an ownership and investment perspective. Property markets have experienced various levels of impact from this event, but universally the greatest impact has been on the traditional commercial and industrial property sectors from the investor perspective, with investment and superannuation funds reporting significant declines in the reported value of these investments. Despite the very direct impact of these declining property markets, the GFC has also had a very significant indirect impact on the various property professions and how these professions are now operating in this declining property market. Of particular interest is the comparison of the property market forecasts in late 2007 to the actual results in 2008/2009.

The performance of diversified emerging market equity funds

We investigate the performance of globally diversified emerging market equity funds during the first decade of the twenty-first century. A vast majority of these funds do not outperform the market benchmark even before transaction costs. The systematic risk of most of the funds is similar to that of the market benchmark portfolio, which may suggest that they aim to offer diversification benefits rather than seeking superior risk-adjusted returns through active management. We do not find any evidence of market timing ability amongst these funds. Finally, whilst we detect persistence in performance, this result is driven mainly by the poorly performing funds.

Dislodgement of commercial property public debt markets : the case of U.S. and Australia

The paper investigates if there are any discernible trends in the U.S. and Australian commercial property public debt markets with the onset of the global financial crisis (GFC). Commercial mortgage-backed securities and unsecured bonds issued by real estate investment trusts for the period 2000 to Q3:2009 are reviewed. It is shown that events in the equity markets have an impact on the pricing of these two instruments. Furthermore, the impact of subdued activity in these financing instruments on the commercial property market is discussed.

Articulation in property programs : an international multi-campus tertiary model

This paper will present program developers and institutional administrators with a program delivery model suitable for cross cultural international delivery developing students from industry through to master’s level tertiary qualifications. The model was designed to meet the needs of property professionals from an industry where technical qualifications are the norm and tertiary qualifications are emerging. A further need was to develop and deliver a program that enhanced the University’s current program profile in both the domestic and international arenas. Early identification of international educational partners, industry need and the ability to service the program were vital to the successful development of Master of Property program. The educational foundations of the program rest in educational partners, local tutorial support, international course management, cultural awareness of and in content, online communication fora, with a delivery focus on problem-based learning, self-directed study, teamwork and the development of a global understanding and awareness of the international property markets. In enrolling students from a diverse cultural background with technical qualifications and/or extensive work experience there are a number of educational barriers to be overcome for all students to successfully progress and complete the program. These barriers disappear when the following mechanisms are employed: individual student pathways, tutorial support by qualified peers, enculturation into tertiary practice, assessment tasks that recognise cultural norms and values, and finally that value is placed on the experiential knowledge, cultural practices and belief systems of the students.

Financialization, crisis and commodity correlation dynamics

Stronger investor interest in commodities may create closer integration with conventional asset markets. We estimate sudden and gradual changes in correlation between stocks, bonds and commodity futures returns driven by observable financial variables and time, using double smooth transition conditional correlation (DSTCC–GARCH) models. Most correlations begin the 1990s near zero but closer integration emerges around the early 2000s and reaches peaks during the recent crisis. Diversification benefits to investors across equity, bond and stock markets were significantly reduced. Increases in VIX and financial traders’ short open interest raise futures returns volatility for many commodities. Higher VIX also increases commodity returns correlation with equity returns for about half the pairs, indicating closer integration.

An entry mode decision-making model for the international expansion of construction enterprises

Purpose – The purpose of this paper is to provide a new type of entry mode decision-making model for construction enterprises involved in international business. Design/methodology/approach – A hybrid method combining analytic hierarchy process (AHP) with preference ranking organization method for enrichment evaluations (PROMETHEE) is used to aid entry mode decisions. The AHP is used to decompose the entry mode problem into several dimensions and determine the weight of each criterion. In addition, PROMETHEE method is used to rank candidate entry modes and carry out sensitivity analyses. Findings – The proposed decision-making method is demonstrated to be a suitable approach to resolve the entry mode selection decision problem. Practical implications – The research provides practitioners with a more systematic decision framework and a more precise decision method. Originality/value – The paper sheds light on the further development of entry strategies for international construction markets. It not only introduces a new decision-making model for entry mode decision making, but also provides a conceptual framework with five determinants for a construction company entry mode selection based on the unique properties of the construction industry.

Self excitation in equity indices

A "self-exciting" market is one in which the probability of observing a crash increases in response to the occurrence of a crash. It essentially describes cases where the initial crash serves to weaken the system to some extent, making subsequent crashes more likely. This thesis investigates if equity markets possess this property. A self-exciting extension of the well-known jump-based Bates (1996) model is used as the workhorse model for this thesis, and a particle-filtering algorithm is used to facilitate estimation by means of maximum likelihood. The estimation method is developed so that option prices are easily included in the dataset, leading to higher quality estimates. Equilibrium arguments are used to price the risks associated with the time-varying crash probability, and in turn to motivate a risk-neutral system for use in option pricing. The option pricing function for the model is obtained via the application of widely-used Fourier techniques. An application to S&P500 index returns and a panel of S&P500 index option prices reveals evidence of self excitation.

Financial Markets, Institutions and Money [3rd ed.]

"The financial system is a key influencer of the health and efficiency of an economy. The role of the financial system is to gather money from people and businesses that currently have more money than they need and transfer it to those that can use it for either business or consumer expenditures. This flow of funds through financial markets and institutions in the Australian economy is huge (in the billions of dollars), affecting business profits, the rate of inflation, interest rates and the production of goods and services. In general, the larger the flow of funds and the more efficient the financial system, the greater the economic output and welfare in the economy. It is not possible to have a modern, complex economy such as that in Australia, without an efficient and sound financial system. The global financial crisis (GFC) of late 2007–09 (and the ensuing European debt crisis), where the global financial market was on the brink of collapse with only significant government intervention stopping a catastrophic global failure of the market, illustrated the importance of the financial system. Financial Markets, Institutions and Money 3rd edition introduces students to the financial system, its operations, and participants. The text offers a fresh, succinct analysis of the financial markets and discusses how the many participants in the financial system interrelate. This includes coverage of regulators, regulations and the role of the Reserve Bank of Australia, that ensure the system’s smooth running, which is essential to a modern economy. The text has been significantly revised to take into account changes in the financial world."---publisher website Table of Contents 1. The financial system - an overview 2. The Monetary Authorities 3. The Reserve Bank of Australia and interest rates 4. The level of interest rates 5. Mathematics of finance 6. Bond Prices and interest rate risk 7. The Structure of Interest Rates 8. Money Markets 9. Bond Markets 10. Equity Markets

International copyright law: A book review

n his 1994 book, Copyright's Highway, Paul Goldstein made the telling prophecy: The celestial jukebox may also portend more revolutional changes in international copyright markets. As the celestial jukebox disseminates information and entertainment over the air and without regard for national boundaries, the importance of the nation-state as a traditional guarantor of copyright may be replaced by international institutions such as the newly established World Trade Organization. In retrospect, it was an accurate prediction. The celestial jukebox has shown little respect for national boundaries. In particular, ephemeral file-sharing programs such as Napster, Freenet and Filetopia have posed difficulties for copyright law. International treaties have taken on larger significance and international institutions such as the World Intellectual Property Organization and World Trade Organization have assumed a greater role in regulating international copyright markets.

Carbon financing and the Australian emissions trading scheme : less emissions, more opportunities?

The introduction by the Australian federal government of its Carbon Pollution Reduction Scheme was a decisive step in the transformation of Australia into a low carbon economy. Since the release of the Scheme, however, political discourse relating to environmental sustainability and climate change in Australia has focused primarily on political, scientific and economic issues. Insufficient attention has been paid to the financial opportunities which commoditisation of the carbon market may offer, and little emphasis has been placed on the legal implications for the creation of a "new" asset and market. This article seeks to shed some light on the discernable opportunities which the Scheme should provide to participants in the Australian and international debt markets.

Impacts of traditional husbandry practices on exploitable levels of genetic diversity in cultured 'Tra' catfish (Pangasianodon hypophthalmus) in the Mekong Delta, Vietnam

Sutchi catfish (Pangasianodon hypophthalmus) – known more universally by the Vietnamese name ‘Tra’ is an economically important freshwater fish in the Mekong Delta in Vietnam that constitutes an important food resource. Artificial propagation technology for Tra catfish has only recently been developed along the main branches of the Mekong River where more than 60% of the local human population participate in fishing or aquaculture. Extensive support for catfish culture in general, and that of Tra (P. hypophthalmus) in particular, has been provided by the Vietnamese government to increase both the scale of production and to develop international export markets. In 2006, total Vietnamese catfish exports reached approximately 286,602 metric tons (MT) and were valued at 736.87 $M with a number of large new export destinations being developed. Total value of production from catfish culture has been predicted to increase to approximately USD 1 billion by 2020. While freshwater catfish culture in Vietnam has a promising future, concerns have been raised about long-term quality of fry and the effectiveness of current brood stock management practices, issues that have been largely neglected to date. In this study, four DNA markers (microsatellite loci: CB4, CB7, CB12 and CB13) that were developed specifically for Tra (P. hypophthalmus) in an earlier study were applied to examine the genetic quality of artificially propagated Tra fry in the Mekong Delta in Vietnam. The goals of the study were to assess: (i) how well available levels of genetic variation in Tra brood stock used for artificial propagation in the Mekong Delta of Vietnam (breeders from three private hatcheries and Research Institute of Aquaculture No2 (RIA2) founders) has been conserved; and (ii) whether or not genetic diversity had declined significantly over time in a stock improvement program for Tra catfish at RIA2. A secondary issue addressed was how genetic markers could best be used to assist industry development. DNA was extracted from fins of catfish collected from the two main branches of the Mekong River inf Vietnam, three private hatcheries and samples from the Tra improvement program at RIA2. Study outcomes: i) Genetic diversity estimates for Tra brood stock samples were similar to, and slightly higher than, wild reference samples. In addition, the relative contribution by breeders to fry in commercial private hatcheries strongly suggest that the true Ne is likely to be significantly less than the breeder numbers used; ii) in a stock improvement program for Tra catfish at RIA2, no significant differences were detected in gene frequencies among generations (FST=0.021, P=0.036>0.002 after Bonferroni correction); and only small differences were observed in alleles frequencies among sample populations. To date, genetic markers have not been applied in the Tra catfish industry, but in the current project they were used to evaluate the levels of genetic variation in the Tra catfish selective breeding program at RIA2 and to undertake genetic correlations between genetic marker and trait variation. While no associations were detected using only four loci, they analysis provided training in the practical applications of the use of molecular markers in aquaculture in general, and in Tra culture, in particular.

Productivity growth and biased technological change : Credit banks in Japan

This paper investigates the productivity change of Japanese credit banks with a Malmquist index and the input technological bias during 2000-2006. Our results indicate that the traditional growth accounting method, which assumes Hicks neutral technological change, is not appropriate for analyzing changes in productivity. Our analysis unambiguously shows that management of Shinkin banks has to be improved. These must be based on the improvement of technical efficiency and/or technological change, emulating the procedures of the best-practice banks, i.e., those banks with Malmquist productivity scores higher than one and simultaneously with technical efficiency and technological change higher than one.

The value of tail risk hedging in defined contribution plans: What does history tell us

Hedging against tail events in equity markets has been forcefully advocated in the aftermath of recent global financial crisis. Whether this is beneficial to long horizon investors like employees enrolled in defined contribution (DC) plans, however, has been subject to criticism. We conduct historical simulation since 1928 to examine the effectiveness of active and passive tail risk hedging using out of money put options for hypothetical equity portfolios of DC plan participants with 20 years to retirement. Our findings show that the cost of tail hedging exceeds the benefits for a majority of the plan participants during the sample period. However, for a significant number of simulations, hedging result in superior outcomes relative to an unhedged position. Active tail hedging is more effective when employees confront several panic-driven periods characterized by short and sharp market swings in the equity markets over the investment horizon. Passive hedging, on the other hand, proves beneficial when they encounter an extremely rare event like the Great Depression as equity markets go into deep and prolonged decline.