...FACTORS AFFECTING PERFORMANCE OF COMMERCIAL BANKS IN KENYA BY MAURICE MUIRURI KAARIUKI A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF BUSINESS IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTERS IN BUSINESS ADMINISTRATION, DEGREE OF KENYATTA UNIVERSITY. JULY, 2014 DECLARATION Declaration by the Researcher This research is my original work and has not been presented for a degree in any other University. No part of this study may be reproduced without prior authority of the author and/or Kenyatta University. Signature……………………………………………………… Date………………………. Maurice Muiruri Kariuki Declaration by the Supervisor This research proposal has been submitted for examination with my approval as the university supervisor. Signature……………………………………………………… Date………………………. Name (PhD.) School of Business ACKNOWLEDGEMENT I take this opportunity to express my gratitude and regards to Professor name (PhD.) for his guidance. I am indebted to all the persons and institutions that offered support, encouragement and prayers to me during the entire research. Lastly, I thank almighty, my parents, brother, sisters and friends for their constant encouragement without which this assignment would not be possible. ABSTRACT The study seeks to investigate the factors affecting performance of commercial banks in Kenya. The Background of the study reveals that there has been continued globalization and economic cooperation among the...
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...Analysts' Selective Coverage and Subsequent Performance of Newly Public Firms ABSTRACT This study examines the ability of analysts to forecast future firm performance, based on the selective coverage of newly public firms. We hypothesize that the decision to provide coverage contains information about an analyst’s underlying expectation of a firm’s future prospects. We extract this expectation by obtaining residual analyst coverage from a model of initial analyst following. We document that in the three subsequent years, IPOs with high residual coverage have significantly better returns and operating performance than those with low residual coverage. This evidence indicates analysts have superior predictive abilities and selectively provide coverage for firms about which their true expectations are favorable. ∗ Das and Guo are at the University of Illinois at Chicago, and Zhang is at the University of Hong Kong. We thank Eli Amir, Gilbert Bassett, Oleg Bondarenko, Konan Chan, Hsiu-lang Chen, Tim Kruse, Chao-Shin Liu, Malcolm McClelland, Roni Michaely, Tom Nohel, Ram Ramakrishnan, Cathy Schrand, Abbie Smith, Lenny Soffer, WeiLing Song, Robert Stambaugh (Editor), Steve Todd, Beverly Walther, Nan Zhou, an anonymous referee, and seminar participants at the City University of Hong Kong, Indiana University at Indianapolis, the London Business School, Nanyang Technological University, the Office of Economic Analysis at the U. S. Securities and Exchange Commission, Singapore...
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...of Submission: August 08, 2012 TABLE OF CONTENTS | | | Executive Summary | 03 | Introduction | 04 | Objective | 04 | Asset Allocation | 05 | Macroeconomic & Industrial Scene | 07 | Diversification | 07 | Trading Strategies & Economic Rationale for Selecting Stocks | 07 | Portfolio Performance | 10 | Holding Period Return | 13 | Portfolio Risk & Return | 14 | Security Market Line | 15 | Lessons Learned from Trading | 16 | Conclusion | 17 | References | 18 | Appendix | 19 | Executive Summary The investment simulation project is a fictitious investment in the Dhaka Stock Exchange that started from June 4, 2012 and ended on August 01, 2012 over a period of two months and separated in three phases. The initial investment in the portfolio was around BDT 1,000,000. The objective of the project was to maximize the after tax wealth through a well diversified portfolio. Given the consistent market fall at the Dhaka Stock Exchange since our investment period, we could not profit from the investment, nevertheless, we were able to improve performance over time with the help of the knowledge on finance and investment. In the first phase (June 4 – June 21) of the project we invested the amount totaling to BDT 999,203 in 15 companies from 11 different industries. We made our investment decision based on basic investing...
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...LEARNING OUTCOMES LEARNING OUTCOMES Program: Master in Wealth Management Professor: Georges Hübner Title of course: Personal Portfolio Management ECTS Credits (teaching days): 3 Learning Objectives: * Consider the client from the point of view of his/her preferences for risk and return * Determine the risk and return of various asset classes and explain where the risk premium comes from * Understand and master the notion of risk factors and how they explain portfolio returns * Master the Equity Risk Premium and be able to discuss its determinants and evolution * Understand the basics of prospect theory and its influences on the PB client * Link the MiFID “suitability” criterion to investor profiles and identify their dimensions * Identify and avoid the pitfalls in portfolio advice * Go beyond the notions of strategic and tactical asset allocation to better serve the client * Include the investor’s objectives and constraints in the portfolio construction process * Adequately report portfolio performance and explain it is a clear fashion to investors * Adapt the measurement of portfolio performance to the preferences of the investor * Distinguish the types of managerial skills that generate the portfolio returns Topics covered: 1. Personal Portfolio Management I A. Investors’ preferences, risk and return 1. The notion of risk and the risk premium 2. Classical view of investors’ preferences ...
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... International Business - Daniels and Radebouqh 2. International Business - Sundaram and Black 3. International Business — Roebuck and Simon 4. International Business – Charles Hill 5. International Business— Subba Rao 3.0.2 Strategic management 100 Marks Course Content 1. Strategic Management Process: Vision. Mission, Goal Philosophy. Policies of an Organization. 2. Strategy, Strategy as planned action, Its importance, Process and advantages of planning Strategic v/s Operational Planning. 3. Decision making and problem solving. Categories of problems, Problem solving skill, Group decision making. Phases indecision making, 4. Communication Commitment and performance, Role of the leader, Manager v/s Leaders Leadership styles 5. Conventional Strategic Management v[s Unconventional Strategic Management. The Differences, Changed Circumstance. 6. Growth Acce orators: Business Web, Market Power, learning based. 7. Management Control, Elements, Components of Management Information Sysstems 8. Mokena’s 7 8 Models : Strategy, style, structure, systems, staff, skill and Shared values 9. Group Project Reference Text 1. Strategic Management — Thompson & Striekland McGraw Hill 2. Competitive advantage – Michael...
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...highly useful application for delivering learning. We also believe the overall environment can be enhanced and complemented by a learner-centred personal learning environment such as Mahara. Pan-institutional learner communities can also be encouraged using Mahara. Mahara’s architecture is inspired by the modular, extensible architecture of Moodle. The Mahara team has also been heavily involved in the Moodle community, with recent work mostly focused on Moodle Networks. Similarly, Mahara systems can be networked together as well having single sign-on from Moodle 1.9 upwards. In a sense, we see Mahara as a ‘sister’ application although the two systems are not required to go together. Mahara will continue to evolve as a ‘pluggable’, modular e-Portfolio system designed to leverage Web 2.0 web services and built with...
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...Trading costs for financial institutions are very high. Sometimes, a portfolio of well selected securities that would otherwise produce high returns, in fact ends up with subpar performance because the execution and implementation of their trading strategies is way too expensive. A great deal of research exists on the performance of hedge funds, mutual funds, pensions and the like, however, the performance of trading desks, a key financial intermediary, responsible for trillions of dollars in execution, has largely been overlooked by researchers. Because of this, the authors of “Performance of Institutional Trading Desks: An Analysis of Persistence in Trading Costs” set out to examine data on both Institutional trading desks and their brokers. The authors examine a large data set, created with 48 million tickets, containing stock identifiers, which allow for gathering other relevant data such as stock prices and volume at the time of the trades as well as the names of the institutions and the brokers involved in the transactions. The authors measure trading cost by the execution shortfall, a comparison of “the execution price with a benchmark price that is observed when the trading desk sends the ticket to the broker” (Performance, 559). Trading desks are then sorted into quintiles based on execution shortfall in the portfolio formation month. The authors then control for economic determinants of trading costs to ensure that data is comparable across different economic cycles...
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...Lecture 1 -‐ Arithmetic Average 1. Ignores compounding; 2. Does not represent an equivalent, single quarterly rate for the year; 3. Is the best forecast of performance for the next quarter without information beyond the historical sample. -‐ Geometric Average 1. Also called a time-‐weighted average return-‐ignoring the quarter-‐to-‐quarter variation in funds under management; 2. Mutual funds are required to publish this as a measure of past performance. -‐ Dollar-‐weight Return 1. Similar to a capital budget problem 2. Accounting for varying amounts of capital under management form quarter to quarter 3. Less than time-‐weighted return of 7.19% -‐ Risk free assets: an asset with a certain rate of return (often taken to be short term T-‐bills) -‐ Scenario analysis: l Determine a set of relevant scenarios and associated investment outcomes and assigns probability to each l l -‐ Compute mean return and variance However, ...
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...Technology, Cornell University, Georgetown University, and the Ohio State University for helpful comments and suggestions. We also thank Selim Topaloglu for research assistance. Williamson acknowledges research support from the Capital Markets Research center at Georgetown University. All errors are the responsibility of the authors. * Does Exchange Rate Exposure Matter? Abstract Previous literature finds mixed empirical support for a relation between exchange rate exposure and its theoretical determinants and that exposure is of negligible economic importance. To re-examine the nature and the economic significance of the exchange rate to firm value relation, we construct an international database of over 17,000 non-financial firms from 18 countries. We find that firms’ foreign activity is broadly and significantly related to exchange rate exposure and that after controlling for this activity, large firms are more sensitive to currency movements than small firms. Using a portfolio approach to investigate the economic importance of these effects, we find that firms...
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...2.1Introduction This section discusses some empirical and theoretical literature on the effect of credit risk management on financial performance, and introduces an overview of BancABC and its credit risk management practices 2.2Brief Company overview ABC Holdings Limited is the parent company of a number of banks operating under the BancABC brand in Sub-Saharan Africa, with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. A group services office is located in South Africa.Historically, BancABC was a merchant bank offering a diverse range of services including wealth management, corporate banking, treasury services, leasing, asset management, and stock broking.ABC Holdings had Its primary listing on the Botswana Stock Exchange, and a secondary listing on the Zimbabwe Stock Exchange (BancABC annual report 2009) During 2014, the ABC Holdings Group was acquired by Atlas Mara. As at 31 December 2014, Atlas Mara had a 98.7% equity stake in ABC Holdings, held directly (60.8%) and indirectly (37.9%). Subsequent to the takeover, ABC Holdings was delisted from the Botswana Stock Exchange on 30 January 2015, and from Zimbabwe Stock Exchange on 12 February 2015.Atlas Mara is a British Virgin Islands registered company with a standard listing on the London Stock Exchange(BancAbc Annual report 2014) The seeks to review the credit risk management methods implemented by the bank . Definition of terms 2.3.1Credit According to Onyeagocha (2001), the term credit...
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...goods and services. • FDI also promotes competition in the domestic input market • Profits generated by FDI contribute to the corporate revenue in the host country • Operation of new ventures by FDI leads to employee learning in the host country who learn how to manage and operate the businesses. This contributes to human capital development of the host country. • Profits generated by FDI contribute to tax revenues in the host country FDI is different from other major types of external private capital flows in that it is motivated largely by the investor’s long-term prospects for making profits in production activities that they directly control. Foreign bank lending and portfolio investment, in contrast, are not invested in activities controlled by banks or portfolio investors, and are often motivated by short-term profit considerations that can be influenced by a variety of factors—for example, interest rates—and are prone to sudden reversals (capital outflows) if any/some of these factors turn unfavourable. Mallampally and Sauvant (1999) claim that the...
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...Fonkoze, the largest MFI in Haiti, collaborated with the Microinsurance Catastrophe Risk Organization (MiCRO) to provide natural disaster insurance coverage to its clients after heavy rainfall which caused damage in Haiti. The insurance helped the borrowers to pay back the outstanding debt, have access to another loan to rebuild their lives, and receive small compensation for loss of property. This example demonstrates the positive influence on viability of micro finance products to support a sustainable economic growth in developing countries. According to the 2009 MFI benchmarks provided by Microfinance Information Exchange (MIX)1, Latin American and the Caribbean (LAC) region has the largest FMIs number as well as yield on gross portfolio among four continents. (Figure 1) Even though microfinance has its long history, which can be traced back to the 1970s, and the mechanism was gradually improved, sustaining the operation and keep its long-term stability is one of the key issues for MFIs. To assess the degree how the global financial crisis impacts on MFIs’ sustainability in developing countries, MFIs’ cash inflow and outflow should be taken into consideration. ________________________________ 1 http://www.mixmarket.org/ MIX collects and validates...
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...Sciedu Press 61 Determinants of Commercial Banks’ Lending Behavior in Nigeria Felicia Omowunmi Olokoyo Department of Finance, School of Business, College of Development Studies, Covenant University Ota, Ogun State, Nigeria Tel: +234-802-394-8641 Email: felicitymy79@gmail.com Received: January 20, 2011 Accepted: March 30, 2011 doi:10.5430/ijfr.v2n2p61 Abstract This study investigated the determinants of commercial banks’ lending behaviour in the Nigerian context. The study aimed to test and confirm the effectiveness of the common determinants of commercial banks lending behaviour and how it affects the lending behaviour of commercial banks in Nigeria. The model used is estimated using Nigerian commercial banks loan advance (LOA) and other determinants or variables such as their volume of deposits (Vd), their investment portfolio (Ip), interest (lending) rate (Ir), stipulated cash reserve requirements ratio (Rr) and their liquidity ratio (Lr) for the period; 1980 – 2005. The model hypothesizes that there is functional relationship between the dependent variable and the specified independent variables. From the regression analysis, the model was found to be significant and its estimators turned out as expected and it was discovered that commercial banks deposits have the greatest impacts on their lending behaviour. The study then suggests that commercial banks should focus on mobilizing more deposits as this will enhance their lending performance and should formulate...
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...Edition: CH. 9) 1) In the context of the Capital Asset Pricing Model (CAPM) the relevant measure of risk is: A) unique risk. B) beta. C) standard deviation of returns. D) variance of returns. E) none of the above. Feedback: B – In the context of the Capital Asset Pricing Model (CAPM) the relevant measure of risk is beta. ---------------------------------------------------------------------------------------------------------------------------------------------------2) Which statement is not true regarding the market portfolio? A) It includes all publicly traded financial assets. B) It lies on the efficient frontier. C) All securities in the market portfolio are held in proportion to their market values. D) It is the tangency point between the capital market line and the indifference curve. E) All of the above are true. Feedback: D – The market portfolio includes all publicly traded financial assets, lies on the efficient frontier, and all securities in the market portfolio are held in proportion to their market values. ---------------------------------------------------------------------------------------------------------------------------------------------------3) According to the Capital Asset Pricing Model (CAPM), the expected rate of return on any security is equal to: A) Rf + β [E(RM)]. B) Rf + β [E(RM) – Rf]. C) β [E(RM) – Rf]. D) E(RM) + Rf. E) none of the above. Feedback: B – The expected rate of return on any security is equal to the risk free rate plus the systematic risk...
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...Literature Review on Bangladesh Stock Market Literature Review: 1 Before the decade of eighty much of the stock market literature viewed the present value of dividends to be the principal determinant of market return of stocks. LeRoy and Porter (1981) and Shiller (1981) found that under the assumption of constant discount factor stock prices were too volatile to be consistent with movement in future dividends. The decomposition of stock price movements is very sensitive to what assumption is made about the presence of permanent changes in either real dividend growth or excess stock return (Wohar & Mark, 2006). Cochrane (1992) Timmerman (1995) have argued that fluctuation in stock prices can be explained by time-varying discount rates and future excess returns. Cochrane (1992) by using an alternative methodology to decompose the variability of stock prices also found the variability of excess return to be more important than the variability of dividend growth. A lower degree of efficiency in less developed countries market might be caused by common characteristics of loose disclosure requirements as well as thinness and discontinuity of trading. It is generally assumed that the emerging markets are less efficient than the developed markets. Raihan, et al (2007) found that in Chittagong Stock Exchange (CSE) in Bangladesh, stock return series do not follow random walk model and the significant autocorrelation co-efficient at different lags do not accept the hypothesis...
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