Market Access Liberalization, Accounting Information Quality and Trading-Activity Reallocation in Tadawul: Evidence from the Abolition of the Qualified Foreign Investor Framework

A multi-premium framework for Turkey’s equity market: sovereign, liquidity, volatility, and governance risk in regional context

RIDING THE DOLLAR TIDE: RISK-MANAGEMENT STRATEGIES AND FINANCIAL PERFORMANCE OF BRAZILIAN AGRIBUSINESS EXPORTERS AMID EXCHANGE-RATE VOLATILITY

This study examines how exchange-rate fluctuations, through both asset-side and liability-side exposures, affect the accounting-based performance of Brazilian agribusiness firms listed on B3 over 2020-2025. The analysis draws on a representative sample of 11 firms selected from an updated sector population and evaluates profitability ratios. Quarterly changes in the BRL/USD exchange rate, obtained from the Central Bank of Brazil, constitute the focal independent variable and are related to firm performance using panel-data regressions. The results show that exchange-rate volatility is statistically significant in selected firm-level analyses, yet the aggregate specifications provide no robust evidence of a uniform effect on profitability. This divergence underscores the heterogeneity of exchange-rate exposure and cautions against one-size-fits-all risk policies. Effective currency-risk management therefore requires firm-specific hedging strategies and adaptive financial planning, particularly under heightened macroeconomic and financial uncertainty.

REASSESSING TECHNICAL ANALYSIS IN EMERGING MARKETS: A 20-YEAR STUDY OF MECHANICAL TRADING RULES AND MARKET EFFICIENCY ON THE LQ45 INDEX

This study conducts an empirical re-evaluation of the effectiveness of technical analysis within the framework of the Efficient Market Hypothesis (EMH) in an emerging market setting. Utilizing a comprehensive two-decade daily dataset (2006–2025) of the Indonesian LQ45 Index, the research simulates a mechanical trading strategy based on 20-day and 50-day Exponential Moving Average (EMA) crossovers, contrasting its performance against a passive Buy-and-Hold (B&H) benchmark. To eliminate subjective bias and ensure methodological rigor, the analysis employs continuous log-returns and assumes a frictionless market. Statistical inference, performed using Welch's independent samples t-test, indicates no significant difference in raw returns between the active EMA strategy and the passive benchmark (p-value = 0.959), thereby strongly supporting the weak-form EMH. Notably, the study reveals a sustained negative equity risk premium over the two decades, with both equity strategies yielding lower returns (6.07% and 6.42%, respectively) than the 7.99% risk-free rate of 10-year government bonds. Despite underperforming in absolute returns, the EMA strategy demonstrates exceptional risk mitigation capabilities, drastically reducing total portfolio volatility from 23.65% to 15.39% and compressing downside deviation from 18.72% to 15.05%. Evaluated through the Modified Sharpe and Sortino ratios, these findings redefine the utility of moving averages: while technical analysis fails to maximize profit or generate anomalous returns, it functions as a highly effective portfolio insurance mechanism, capable of mitigating downside risk during market downturns.

Revisiting the stock market reaction to other comprehensive income and its components: evidence from U.S. commercial banks around ASU 2016-01

Recent developments in the US banking sector, including heightened sensitivity to unrealized losses on securities portfolios, have renewed interest in how investors price other comprehensive income (OCI). Despite the importance of OCI for financial institutions, there is limited evidence on how investors respond to aggregate OCI and its components under the regulatory shift introduced by Accounting Standards Update ASU 2016-01 . This study aims to address this gap by examining whether the market’s pricing of aggregate OCI and its major components changed following the new standard. The study examines 8,000 quarterly observations for the 200 largest US commercial banks from 2011 to 2020. Using a fixed-effects model, it assesses how absolute changes in net income, OCI and the components of OCI affect abnormal returns (ARs). Unlike prior studies that mainly rely on annual data, this research uses quarterly observations to capture a more timely market reaction. Market response is measured through ARs aggregated over the three months following OCI disclosure. The findings reveal significant changes in market reactions following the implementation of ASU 2016-01. More precisely, absolute changes in net income negatively affect ARs, and this relationship becomes more pronounced after ASU 2016-01 adoption. In addition, aggregate absolute OCI changes show no significant relationship with ARs in either period. However, disaggregated analysis exhibits significant component-specific effects: ASU 2016-01 increases the informativeness of available-for-sale (AFS) securities and cash flow hedge components, with a stronger post-ASU market response to hedge-related OCI disclosures per unit of variation, while AFS fluctuations exert a comparable effect for a one-standard-deviation change. Additional analysis shows noteworthy results: ARs are negatively related to negative OCI changes. Nevertheless, the effect of positive changes on ARs becomes positive and significant when 2020 observations are excluded, confirming that the pricing of OCI gains is disrupted under uncertainty. This study has several limitations. First, the baseline analysis ends in 2020 and therefore does not capture the 2022–2023 banking turmoil, when unrealized losses became a central focus for investors and supervisors. Thus, the estimates should be interpreted as a preturmoil benchmark. Second, while we document associations between changes in NI/OCI (and their components) and ARs, we do not fully disentangle whether these effects reflect (i) revisions in investors’ cash-flow expectations or (ii) changes in perceived risk premia or discount rates. Third, banks’ portfolio rebalancing and hedging choices may respond endogenously to the reporting regime, thereby affecting both OCI components and returns. Although we include standard controls, we cannot rule out all forms of time-varying omitted risk exposures. Finally, because the tests use quarterly ARs, the observed reaction may incorporate both immediate market responses and gradual information assimilation. These findings have implications for theory, research and practice, with clear relevance for standard setters, regulators, banks and capital-market participants. For theory, the results suggest that investors’ use of OCI is shaped by presentation and salience. OCI is more informative when examined at the component level than as an aggregate total, consistent with limited-attention interpretations. For research, the evidence motivates future work that disentangles cash-flow expectation revisions from discount-rate (risk-premium) effects and examines whether these channels vary across normal versus stress regimes. For standard setters (e.g. FASB), the findings support clearer and more comparable component-level OCI disclosure to enhance decision usefulness. For policymakers, the results indicate that reporting regimes could provide clearer and more disaggregated OCI disclosure information that would enhance transparency, support market discipline and improve the monitoring of banking-sector vulnerabilities. The findings also have important implications for regulators and supervisors. They emphasize the prudential relevance of unrealized losses on AFS portfolios. This role becomes more pronounced in regimes where such valuation losses are included in regulatory capital and can influence CET1 (Basel Committee on Banking Supervision, 2021; Su et al., 2025). This reading is consistent with supervisory lessons from the 2022–2023 banking stress episode (Board Fed, 2023; Yousaf et al., 2023). For banks and risk managers, the evidence underscores the value of transparent communication about securities-portfolio composition and hedging strategies. For investors and analysts, the results indicate that accounting updates such as ASU 2016-01 can change how markets price earnings volatility and OCI information, reinforcing the need to incorporate reporting-regime shifts when interpreting bank performance and risk. Despite growing interest in how accounting standards affect financial reporting, no prior study has specifically examined ASU 2016-01 within the banking sector. Existing research has largely focused on insurance companies and often uses raw returns to assess value relevance, potentially overlooking the effects of unexpected information. This study addresses that gap by using ARs, a refined measure that captures unexpected market reactions, to evaluate the informativeness of OCI disclosures under ASU 2016-01. The findings offer new insights into how regulatory changes shape investor responses in US commercial banks.

Does Market Power Influence Financial Stability? Panel Evidence from Kenyan Listed Commercial Banks

Kenya’s banking sector has become increasingly concentrated through mergers, acquisitions, restructuring and technology-led scale expansion, with a small group of listed institutions controlling more than three-quarters of sector assets. Whether the resulting market power protects franchise value and promotes prudent behaviour or weakens competitive discipline and increases risk remains unresolved. This study examines the effect of market power on the financial stability of Kenyan listed commercial banks, controlling for lagged stability, the cost-to-income ratio, risk-based capital, risk-weighted assets to total assets, inflation and the lagged natural logarithm of GDP. It uses a balanced quarterly panel of eight Nairobi Securities Exchange-listed banks over 2013Q1–2025Q2 (392 bank-quarter observations after lagging) and is anchored on the Structure–Conduct–Performance paradigm. Following a Hausman test (chi-square = 75.7104, p < 0.001), the preferred model is a bank fixed-effects Panel EGLS regression with cross-section weights and panel-corrected standard errors. The lagged dependent variable is positive and significant (ρ = 0.4947, p < 0.001), confirming strong persistence in bank stability. Market power, measured by the banks share of assets, exerts a negative and statistically significant effect on financial stability (β = −0.7669, p = 0.0343), supporting competition–stability. Risk-based capital (β = 1.1625, p < 0.001) and the risk-weighted-assets-to-total-assets ratio (β = 0.2161, p = 0.0258) are both positively and significantly associated with stability, while the cost-to-income ratio (β = −0.2241, p < 0.001) and GDP growth (β = −0.0286, p = 0.0220) are negatively and significantly associated with stability; inflation is negatively signed but statistically insignificant (β = −0.4241, p = 0.1013). The model explains 87.2% of the variation in stability (weighted R² = 0.8720; F = 183.4554, p < 0.001), and the results are broadly robust to an alternative two-quarter lag structure. The findings indicate that rising market power among Kenya’s listed banks is associated with reduced financial stability, evidence consistent with weakening competitive discipline and implicit too-big-to-fail expectations among dominant institutions. The study recommends that prudential capital regulation be complemented by active competition-policy oversight of concentration and market power, that supervisors monitor risk-weighted asset composition and cost efficiency alongside capital adequacy, and that further consolidation in the sector be evaluated against its implications for scale efficiency as well as competitive discipline.

Reassessing Multiple Vote Share Structures in EU Capital Markets—Nordic Insights on Control Structures and Capital Market Development

This article presents a legal and empirical analysis of multiple voting share structures (MVSS) among newly listed companies in the Nordic region over a ten-year period ending in 2024. Drawing on original data and theoretical insights, we advance three key findings that question core assumptions underlying the EU’s 2024 MVSS Directive. First, we document a marked decline in the use of dual-class structures at the initial public offering (IPO) phase, particularly in Sweden, where this retreat has coincided with market strength and high investor confidence. Second, the Nordic experience indicates that legal harmonization enabling MVSS may not, by itself, catalyse increased listing activity. Rather, newly listed firms in the Nordic region have tended to adopt governance models consistent with prevailing investor expectations, suggesting other contextual factors play a more decisive role in listing decisions. Third, our analysis confirms a persistent negative relationship between MVSS and firm valuation. Taken together, these findings challenge the MVSS Directive’s underlying rationale and suggest that permitting MVSS may undermine, rather than promote, the goals of the European Union (EU) Capital Markets Union (CMU). We conclude that the adoption of MVSS structures is not a necessary condition for market development and may, in fact, detract from long-term market performance and investor protection.