Interdependence of Macroeconomics Variables, Stock Market Returns and Stock Market Volatility in Latin America

This thesis examines the interdependence of macroeconomic variables, stock market returns and stock market volatility in Latin America between 2000 and 2015. Argentina, Brazil, Chile, Colombia, Mexico and Peru were chosen as the sample markets, while inflation, interest rate, exchange rate, money supply, oil and gold were chosen as the sample macroeconomic variables. Bivariate VAR (1) model was applied to examine the mean return spillovers between the variables, whereas GARCH (1, 1) – BEKK model was applied to capture the volatility spillovers. The sample was divided into two smaller sub-periods, where the first sub-period covers from 2000 to 2007, and the second sub-period covers from 2007 to 2015. The empirical results report significant shock transmissions and volatility spillovers between inflation, interest rate, exchange rate, money supply, gold, oil and the selected markets, which suggests interdependence between the variables.

Detection of genetically modified organisms in soy products sold in Turkish market

PCR-based technique for GMO detection is the most reliable choice because of its high sensitivity and specificity. As a candidate of the European Union, Turkey must comply with the rules for launching into the market, traceability, and labeling of GMOs as established by EU legislation. Therefore, the objective of this study is to assess soybean products in the Turkish market to verify compliance with legislation using qualitative Polymerase Chain Reaction (PCR) assay to detect the presence of GM soybean and to quantify its amount of GM soybean in the samples tested positive using real-time PCR. DNA extracted by the modified CTAB method was properly used for PCR amplification of food materials. The amplification of a 118 bp DNA fragment of the lectin gene from soybean by PCR was successfully achieved in all samples. The GMO screening was based on the detection of 35S promoter and NOS terminator sequences. The GM positive samples were subjected to detection of Roundup ReadyTM soybean (RR) using quantitative real-time PCR. It was found that 100% of the tested food samples contained less than 0.1 per cent of EPSPS gene.

Physicochemical and sensory characteristics of pan bread samples available in the Brazilian market

Pan bread samples available in the Brazilian market were evaluated for their physicochemical and sensory characteristics. Twelve pan breads, seven white and five whole grain breads, were evaluated. Moisture, water activity (Aw), firmness, and color (L*, a*, b*) of the crumb were evaluated on the first, fourth, seventh, and tenth days after purchasing the breads. Specific volume was evaluated on the first day of analysis with averages of 4.72 and 4.70 mL/g for the white and whole grain breads, respectively. The average results on the first day of analysis were: 37.03% and 41.23% moisture, 0.954 and 0.966 Aw, 276.27 and 267.83 gf firmness, 74.73 and 64.45 L* values, 0.37 and 3.85 a* values, and 15.51 and 18.98 b* values for the white and whole grain breads, respectively. The samples showed an increase in firmness, reduction in moisture and Aw, and no color changes over time. A survey conducted prior to the acceptance test showed that the three most important factors influencing purchase were taste (19.6%), tenderness (16.8%), and expiration date of the product (14.3%). The results showed that 37.2% of the panelists preferred white bread, 62.8% preferred bread with fibers, and 82.6% would probably or definitely buy white bread with fibers.

TAKING ADVANTAGE OF THE LOCAL ADVANTAGE? - Investment value of the analyst local advantage in the Finnish stock market in 2006–2014

An investor can either conduct independent analysis or rely on the analyses of others. Stock analysts provide markets with expectations regarding particular securities. However, analysts have different capabilities and resources, of which investors are seldom cognizant. The local advantage refers to the advantage stemming from cultural or geographical proximity to securities analyzed. The research has confirmed that local agents are generally more accurate or produce excess returns. This thesis tests the investment value of the local advantage regarding Finnish stocks via target price data. The empirical section investigates the local advantage from several aspects. It is discovered that local analysts were more focused on certain sectors generally located close to consumer markets. Market reactions to target price revisions were generally insignificant with the exception to local positive target prices. Both local and foreign target prices were overly optimistic and exhibited signs of herding. Neither group could be identified as a leader or follower of new information. Additionally, foreign price change expectations were more in line with the quantitative models and ideas such as beta or return mean reversion. The locals were more accurate than foreign analysts in 5 out of 9 sectors and vice versa in one. These sectors were somewhat in line with coverage decisions and buttressed the idea of local advantage stemming from proximity to markets, not to headquarters. The accuracy advantage was dependent on sample years and on the measure used. Local analysts ranked magnitudes of price changes more accurately in optimistic and foreign analysts in pessimistic target prices. Directional accuracy of both groups was under 50% and target prices held no linear predictive power. Investment value of target prices were tested by forming mean-variance efficient portfolios. Parallel to differing accuracies in the levels of expectations foreign portfolio performed better when short sales were allowed and local better when disallowed. Both local and non-local portfolios performed worse than a passive index fund, albeit not statistically significantly. This was in line with previously reported low overall accuracy and different accuracy profiles. Refraining from estimating individual stock returns altogether produced statistically significantly higher Sharpe ratios compared to local or foreign portfolios. The proposed method of testing the investment value of target prices of different groups suffered from some inconsistencies. Nevertheless, these results are of interest to investors seeking the advice of security analysts.

Return and Volatility spillovers among stock and Foreign Exchange Markets: Empirical Evidence from selected African Markets

Return and volatility dynamics in financial markets across the world have recently become important for the purpose of asset pricing, portfolio allocation and risk management. However, volatility, which come about as a result of the actions of market participants can help adapt to different situations and perform when it really matters. With recent development and liberalization among financial markets in emerging and frontier markets, the need for how the equity and foreign exchange markets interact and the extent to which return and volatility spillover are spread across countries is of importance to investors and policy makers at large. Financial markets in Africa have received attention leading to investors diversifying into them in times of crisis and contagion effects in developed countries. Regardless of the benefits these markets may offer, investors must be wary of issues such as thin trading, volatility that exists in the equity and currency markets and its related fluctuations. The study employs a VAR-GARCH BEKK model to study the return and volatility dynamics between the stock and foreign exchange sectors and among the equity markets of Egypt, Kenya, Nigeria, South Africa and Tunisia. The main findings suggest a higher dependence of own return in the stock markets and a one way return spillover from the currencies to the equity markets except for South Africa which has a weaker interrelation among the two markets. There is a relatively limited integration among the equity markets. Return and volatility spillover is mostly uni-directional except for a bi-directional relationship between the equity markets of Egypt and Tunisia. The study implication still proves a benefit for portfolio managers diversifying in these African equity markets, since they are independent of each other and may not be highly affected by the influx of negative news from elsewhere. However, there is the need to be wary of return and volatility spillover between the equity and currency markets, hence devising better hedging strategies to curb them.

Distributed energy resources in an electricity retailer’s short-term profit optimization

Liberalization of electricity markets has resulted in a competed Nordic electricity market, in which electricity retailers play a key role as electricity suppliers, market intermediaries, and service providers. Although these roles may remain unchanged in the near future, the retailers’ operation may change fundamentally as a result of the emerging smart grid environment. Especially the increasing amount of distributed energy resources (DER), and improving opportunities for their control, are reshaping the operating environment of the retailers. This requires that the retailers’ operation models are developed to match the operating environment, in which the active use of DER plays a major role. Electricity retailers have a clientele, and they operate actively in the electricity markets, which makes them a natural market party to offer new services for end-users aiming at an efficient and market-based use of DER. From the retailer’s point of view, the active use of DER can provide means to adapt the operation to meet the challenges posed by the smart grid environment, and to pursue the ultimate objective of the retailer, which is to maximize the profit of operation. This doctoral dissertation introduces a methodology for the comprehensive use of DER in an electricity retailer’s short-term profit optimization that covers operation in a variety of marketplaces including day-ahead, intra-day, and reserve markets. The analysis results provide data of the key profit-making opportunities and the risks associated with different types of DER use. Therefore, the methodology may serve as an efficient tool for an experienced operator in the planning of the optimal market-based DER use. The key contributions of this doctoral dissertation lie in the analysis and development of the model that allows the retailer to benefit from profit-making opportunities brought by the use of DER in different marketplaces, but also to manage the major risks involved in the active use of DER. In addition, the dissertation introduces an analysis of the economic potential of DER control actions in different marketplaces including the day-ahead Elspot market, balancing power market, and the hourly market of Frequency Containment Reserve for Disturbances (FCR-D).

SME internationalisation from an emerging market to a developed market : a case study from Ghana

This study focuses on understanding the internationalisation of small and medium-sized enterprises (SMEs) from an emerging market to a developed market. In particular, it examines the internationalisation process of a firm in the clothing and textile manufacturing industry in Ghana. Theoretically, the study is limited to the network internationalisation approach (e.g. Johanson & Mattsson, 1988; Johanson & Vahlne, 2009) and the industrial network approach (Håkansson & Snehota, 1995). Methodologically, a qualitative abductive case study approach is employed. The research process relies on a longitudinal method involving primary and secondary data and critical event analysis. Primary data has been collected from relevant informants at two different times in the internationalisation process. The research findings highlight the significance of both domestic and foreign business relationships in the internationalisation of an SME from an emerging African market to a developed country market. They show the greater importance of exogenous critical events than has been found in the research regarding firms in developed countries. Institutional actors were essential in the network and as sources of exogenous critical events. In addition, the successful SME should possess unique resources in the form of an entrepreneurial spirit, sufficient knowledge of internationalisation, and specific product knowledge. Theoretically, the present study contributes to business network research through providing an understanding of the process of developing network relationships and their impact in an African context. By focusing on SMEs, a contribution has been made in relation to the advancement of SME research. This research reveals empirical insight into SME internationalisation in a setting where an SME is internationalising to a developed country market from a newly emerging African market. Methodologically, the study provides an example of longitudinal research based on abductive methodology. The results provide implications for firms, managers, and policy-makers within the industry, especially on how to manage and use network relationships to promote SME internationalisation from newly emerging markets.

Entry mode choice of Finnish startups entering Chinese market in tablet industry

Since the implement of opening policy, the overall economy of China has maintained rapid and stable development, which has now makes China become the world's second largest economy. China, it is to become the largest overseas market for many large global enterprises from various industries, this naturally also includes the Tablet PC industry that raised in recent years. The purpose of this thesis is to analyze different internal and external factors that influence the entry mode choices of Finnish SMEs in tablet industry entering Chinese market. The goal is to find out the suitable entry modes for the Finnish tablet or other relevant SMEs entering Chinese market. Qualitative analysis is the main research method in empirical part of this study. The interviews were carried out with the case company and other two Finnish business organizations in China. The result of the study indicated that the internal resource and external business environment affect the entry modes choices much more than other factors for SMES. The exporting mode and sales subsidiary could be a better choice for SMEs entering Chinese market. Furthermore, firms should fully learn the Chinese market combine with its own background before making decisions.

Rumos da liberalização financeira brasileira

Routes of the Brazilian financial liberalization. This paper describes the most recent change in the rules of domestic exchange market and emphasizes/explores their consequences to Brazilian macroeconomic.

Computational Market Dynamics of Virtual Economies

The last two decades have provided a vast opportunity to live and explore the compulsive imaginary world or virtual world through massively multiplayer online role-playing games (MMORPGs). MMORPG gives a wide range of opportunities to its users to participate with multi-players on the same platform, to communicate and to do real time actions. There is a virtual economy in these games which is largely player-driven. In-game currency provides its users to build up their Avatars, to buy or sell the necessary goods to play, survive in the games and so on. As a part of virtual economies generated through EVE Online, this thesis mainly focuses on how the prices of the minerals in EVE Online behave by applying the Jabłonska- Capasso-Morale (JCM) mathematical simulation model. It is to verify up to what degree the model can reproduce the virtual economy behavior. The model is applied to buy and sell prices of two minerals namely, isogen and morphite. The simulation results demonstrate that JCM model ts reasonably well to the mineral prices, which lets us conclude that virtual economies behave similarly to the real ones.

The Dynamic Relationship between Finnish Stock Market and Commodities

Since different stock markets have become more integrated during 2000s, investors need new asset classes in order to gain diversification benefits. Commodities have become popular to invest in and thus it is important to examine whether the investors should use commodities as a part for portfolio diversification. This master’s thesis examines the dynamic relationship between Finnish stock market and commodities. The methodology is based on Vector Autoregressive models (VAR). The long-run relationship between Finnish stock market and commodities is examined with Johansen cointegration while short-run relationship is examined with VAR models and Granger causality test. In addition, impulse response test and forecast error variance decomposition are employed to strengthen the results of short-run relationship. The dynamic relationships might change under different market conditions. Thus, the sample period is divided into two sub-samples in order to reveal whether the dynamic relationship varies under different market conditions. The results show that Finnish stock market has stable long-run relationship with industrial metals, indicating that there would not be diversification benefits among the industrial metals. The long-run relationship between Finnish stock market and energy commodities is not as stable as the long-run relationship between Finnish stock market and industrial metals. Long-run relationship was found in the full sample period and first sub-sample which indicate less room for diversification. However, the long-run relationship disappeared in the second sub-sample which indicates diversification benefits. Long-run relationship between Finnish stock market and agricultural commodities was not found in the full sample period which indicates diversification benefits between the variables. However, long-run relationship was found from both sub-samples. The best diversification benefits would be achieved if investor invested in precious metals. No long-run relationship was found from either sample. In the full sample period OMX Helsinki had short-run relationship with most of the energy commodities and industrial metals and the causality was mostly running from equities to commodities. During the first sub period the number of short-run relationships and causality shrunk but during the crisis period the number of short-run relationships and causality increased. The most notable result found was unidirectional causality from gold to OMX Helsinki during the crisis period.

From semi-stagnation to growth in a sino-centric market

According to recent available information, the Brazilian economy may be entering a cycle of sustained growth. The dominant current interpretation points to the progresses made in terms of monetary stability, Balance of Payments and structural reforms. Indeed, without monetary stability and the commercial opening of the economy, investments would not be increasing and credit growth would not be helping the emergence of millions of new consumers. But these achievements should be taken as generally conditioning, rather than actually shaping the new picture. Some unexpected (not rarely positive) consequences of overcoming the long enduring semi-stagnation, the emergence of China as a major player, and its consequences on the necessary re-structuring of the Brazilian industry, seem to be decisive in the present day redefinition of the Brazilian GDP growth potential.