Ramiz Ur Rehman

Performance Evaluation of Mutual Funds

The aim of conducting this research is to find out the investment tendency in mutual funds of Pakistan, Conventional vs. Islamic. The study is also aimed at finding out the role of mutual fund investment in Pakistan. This study also finds out the factors effecting the investment in mutual funds and measure the performance of mutual funds through the models which are used worldwide to evaluate the investment tendency in the area of mutual funds through portfolio (Risk/Return) Sharpe Measure and Treynor Measure, to make the best point for investment through graphical representation for both conventional and Islamic, which is much easier to take better decision for investment either sell or buy.

Political system of a country and its non-performing loans: a case of emerging markets

This paper analyses the trend of non-performing loans over the last one decade in the banking sector of Pakistan. This study also examines the factors which influences on NPLs. Using data from 1998-2009, this paper argues strongly that democratic political system of a country has positive influence on the non-performing loans. It also finds statistical evidence that board size have positive association with non-performing loans while board independence and ownership concentration have negative association with non-performing loans regardless the bank type.

Transparency and Financing Choices of Family Firms

Past literature indicates that family firms were different from nonfamily firms in term of performance, governess and disclosure. But there was very little evidence which specified the financial structure of family firm. Maturity and leverage, two proxies are used to examine the financial structure of family firm in this particular study. This study shows that family firms are different from non-family firms in terms of debt maturity and leverage. Moreover, transparency is negatively related to maturity which indicates that more transparency decreases maturity, while family firms have more debt maturity which suggested that family firms are more relying on long-term debt and there is a chance of expropriation in family firms due to less transparency. Furthermore, transparency is positively related with leverage which indicates that more transparency increases leverage, while family firms also have positive relationship with leverage which specifies that more transparency leads family firms’ financial structure more toward debt.

Cluster strategy and supply chain management: The road to competitiveness for emerging economies

The purpose of this paper is to highlight the characteristic role of specialized markets and traders in the internationalization of emerging economies by examining the linkages between supply chain management (SCM) and industrial clustering in China.,Multi-method approach was employed as primary data were collected from a case study of Shaoxing textile cluster, and was supplemented with secondary data to triangulate the findings. The proposition that competitive advantages of industrial clusters facilitate effective SCM was explored.,The authors reveal that China’s cost advantage is manifested in the entire value chain. The provision of business friendly amenities as a result of synergetic benefits of vertical and horizontal integration of supply clusters promotes competitiveness of SMEs and region as a whole. Moreover, specialized markets and international traders found to play significant role in sustainable cluster development.,As with fieldwork and case studies, generalization should be drawn with care. Systematic synthesis of relevant case studies is recommended.,The study endorses the construction of local supply chains and suggests implementation of cluster strategy by focusing on environment-specific execution of triple helix model.,The article elaborates the linkages between cluster theory and SCM both within cluster and between interspersed clusters. It also explains how specialized markets and global players are enabling concentrated supply networks. The paper recommends extension of “Triple helix + 1 model” by making local community part of the underlying framework.

Financial Leverage Hits Corporate Performance

The study has been conducted to explore the relationship between financial leverage and financial performance. The study also involves macroeconomic perspective by involving few macro variables like interest rate. It has been conducted on the nonfinancial sector of Pakistan including all nonfinancial companies listed at Karachi Stock Exchange (KSE) as a sample. The study has been conducted over a period of 7 years, 2005 through 2011. Regression analysis has been performed in order to analyze the data. The results of the study exhibit that financial leverage, measured by debt to equity ratio, has significant impact on financial performance variables, measured by return on assets (ROA) and return on capital (ROC), whereas on the other two variables, return on equity (ROE) and earnings per share (EPS), its effect is insignificant. On the other hand, two variables, namely, gross domestic product and interest rate, were used as indicators of overall economy, and their impact was also studied on financial performance. The results show that their effect on financial performance is insignificant. Combining all the results together, it can be concluded that financial performance is majorly determined by firm’s choice of financial leverage and not by the overall health of the economy specifically in context of nonfinancial firms in Pakistan. Managers in the search for improved performance apply firm-specific strategies, which they believe will provide their firms with the competitive advantage in the marketplace.

Does U.S. Sub-Prime Crisis Impede Asian Equity Indices Integration Strengthens?: An Ardl-Bounds Testing Approach

Promotion of regional stock market integration is critically meaningful for regional development. Since last couple of decades stock markets Integration has been widely seen as the most exciting and promising area for investment, especially because they are expected to generate high returns and to offer good portfolio diversification opportunities. Consequently, these markets have known a considerable expansion. For this motive, we examine the integration of principal Asian equity markets namely; Taiwan, Sri Lanka, Korea, China, Japan, Malaysia, Hong Kong, India, Singapore and Pakistan employing ARDL bounds testing approach to co-integration and VECM. The study employed monthly stock indices data covering from July 1997 to June 2015. For this purpose list of following indices are used to represent the markets: TSEC weighted index for Taiwan, CSE for Sri Lanka, KOSPI composite index for Korea, SSE composite index for China, Nikkei 225 index for Japan, FTSE 100 index for Malaysia, Hang Seng index for Hong Kong, BSE Sensex for India, Strait Time Index for Singapore and KSE 100 index for Pakistan. We investigate null hypothesis (H0) of no long run relationship as well the direction of causality in case of rejection of (H0). Study explore the Asian markets are integrated during sample period of pre- and post-2008 U.S sub-prime crisis which is in line with prior literature, to extent, this study further explore more attractive results of integration among sample indices and concludes that adjustment of (ECT-1) improved expressively in post-crisis period compare to pre-crisis period over sample years. This implies that the strength of long-run relationship among Asian markets increase over the post-crisis period. The overall comparison results of sample Asian stock indices pre- and post U.S sub-prime crisis conclude that, the integration of sample indices are more strengthen in Asian markets after the global financial crisis. It would be interesting to further explore the factors leading for market integration like, trade flow of the countries, foreign institutional/private portfolio investments, previous equity returns and more precisely put on structural breaks to measure the strength of US crisis period. In addition, it would be more strengthen to make sound policy coordination among Asian region to overcome the influence of economic instabilities and financial fluctuations.

Does Inflation Hurt the Stock Market Returns

This paper examines the impact of high inflation on stock market returns in Pakistan. For this purpose, a monthly data of inflation and stock returns is collected from 2005-2009. A simple linear regression model is applied to determine the impact of inflation on stock returns. The results show that there is negative and significant impact of inflation on stock returns.