Speaker: Dr. Ali Ebrahimnejad
Market participants have long based their investment decisions on the premises of modern finance theory. These theories, however, have been tailored to explain the behavior of advanced capital markets with developed institutional infrastructure, and do not take into account numerous structural differences and features of the emerging markets. This workshop presents key institutional features in emerging markets that investors and regulators ought to consider when making investment or regulatory decisions in the context of emerging markets.
Agenda:
Key assumptions of modern finance theory: A review
Main structural differences between developed and emerging markets :
1) Stock return comovement and herding
2) Weakness in financing through primary and secondary markets
3) Firm interlock and cross-ownership
4) Price limits
5) Short investment horizons
6) Differences in legal origins and its implications for the financial markets
7) Inflation
8) Capital gain tax vs. transaction tax
9) Insider trading and price manipulations
Putting it all together: Implications for investors and regulators