Market overreaction, firm-specific information and macroeconomic variables in US and Chinese markets during COVID-19

PurposeThis study examines the impact of firm-specific information and macroeconomic variables on market overreaction of US and Chinese winner and loser portfolio before and during COVID-19.Design/methodology/approachThe firm-specific information includes firm size, volume, volatility, return of asset (ROA), return of equity (ROE), earning per share (EPS) and quick ratio while the macroeconomic variables are export rate, import rate, real GDP, nominal GDP, FDI, IPI and unemployment rate. Besides, one-third of the top performance stocks are categorized as winner portfolio while one-third of lowest performance stocks are categorized as loser portfolio. This study uses AECR to indicate stock return and measure market overreaction. GAECR is used to determine contrarian profit. The data range of pre-COVID-19 is from 1-Jan-2015 to 31-Dec-2019 while the period of COVID-19 is from 1-Jan-2020 to 31-Dec-2020.FindingsIn pre-COVID-19, firm-specific information (volatility, ROA, ROE and EPS) and macroeconomic variables are found to be correlated to stock return in US and Chinese portfolios except Chinese winner portfolio. Nonetheless, the impact of firm-specific information has vanished and macroeconomic variables are significant to stock return in COVID-19. It shows that investors rely on the economic indicators to trade in turbulent period due to emergence of COVID-19 as a disruption in market. Furthermore, US and Chinese portfolios are overreacted during COVID-19. Chinese loser portfolio has higher tendency of overreaction than US loser portfolio while US winner portfolio has higher tendency of overreaction than Chinese winner portfolio.Originality/valueThe results of this study assists academician, practitioners and investors on understanding and create awareness to the existence of market overreaction and the determinants that can cause the phenomenon.

Comparison of Logistics Time of R3A and R3B for Transportation of Lychee Product

This research presents the logistics management information system (LMIS) for the supply chain of lychee products of Phayao Province, Thailand. The main aim of this research is to develop a management application for Phayao’s agricultures to improve their competitive abilities on Chinese markets by utilizing a prediction method for traffic congestion based on both real-time and anticipated road traffic. The loss of productivity caused by traffic congestion has become a huge and increasingly heavy burden on Phayao farmers. Therefore, the prediction of urban road network traffic flow and the rapid and accurate evaluation of traffic congestion is of great significance to solve this problem. By using traffic data obtained by distance, road conditions, transportation safety, traffic density, and customs clearance, the local farmers in Phayao can deliver lychee products on time and reduce the loss of high emissions and environmental pollution caused by traffic congestion effectively.

Price Transmission in Cotton Futures Market: Evidence from Three Countries

This study examines the price transmission between cotton prices in U.S., Indian, and Chinese futures markets. We focus on studying the long-run price movements using cointegration and alternate causality tests. The empirical results indicate the following: (a) the U.S. cotton futures market continues to be the most dominant market, and it leads price changes in India and China; (b) the cotton prices in India also impacts the cotton prices in China as we report a unidirectional relationship flowing from India to China; (c) there is duality of direction of price transmission for U.S. and Chinese commodity markets as we document bi-directional causality between U.S. to Chinese cotton futures for the entire period and uni-directional causality from U.S. to Chinese markets for the two sub-periods; (d) the long-term relationship between the three markets has seen a significant shift as documented by the absence of cointegration which may be due to changes in government policy, especially in India and China specifically after 2014. Overall, results provide support for further reforms especially for Indian and Chinese commodity exchanges so that they can play a vital role in the price discovery process especially for commodities that are largely produced or consumed in these economies.

COMPETITIVENESS AND DEVELOPMENT POTENTIAL OF INDONESIAN SAGO FLOUR EXPORT

Export is one of the economic parameters of a country which can increase the country’s economy which must be maintained and increased in value. In the last ten years from 2010 to 2019, Indonesia’s export performance fluctuated and decreased, resulting in a trade balance deficit in 2012-2014 and 2018-2019. Based on the problem, Indonesia needs to make strategic efforts. One of the efforts that can be done is to develop agricultural exports. One of the products that has the potential to be developed is sago flour. This research analyzed the competitiveness and export potential of Indonesian sago flour. This study used secondary data which is panel data consisting of time series and cross section data. The methods used were the RCA, EPD, and X- Model. The results of the analysis using RCA and EPD concluded that Indonesian sago flour has strong competitiveness in the export market. Then the results of the X-model analysis show that sago flour exports have the potential for optimistic market development in the Philippine, Thailand and Chinese markets and the potential export markets are Japan, Malaysia, Hong kong, and Sri Lanka

New Realms of Influence: Infrastructure Development, Financial Institutions and Markets

The renewed emphasis on Asia’s connectivity infrastructure has brought into focus the complex relationship between pursuing economic development through trans-state linkages and promoting political agendas. The formalizing of transit flows across the Asian space has involved financial, technical and regulatory relations bringing together the interests of actors at various levels. This article examines how these have been used by China to create new realms of influence through a study of the working of the Asian Infrastructure Investment Bank and Chinese markets across Central Asia, in order to demonstrate the complex role that these play in determining the contours of a relationship based on infrastructural financing and trade. The extent to which these globalized corridors and systems of governance might be impacted by the pandemic, however, remains to be seen.

Scaling the Great Wall: The EU-China Comprehensive Agreement on Investment and Market Access

The European Union and China have been negotiating an investment agreement with a comprehensive scope including the improvement of market access conditions for investors. Albeit a pressing issue, progress has been plagued with challenges. The problems regarding access especially to Chinese markets can be overcome by approaching the issue from the viewpoint of a key legal provision, namely (pre-establishment) national treatment, which must be incorporated into the treaty in a careful and balanced, yet ambitious manner. The present article examines how this provision can be formulated in investment treaties to augment the law governing market access. It therefore reviews the past investment law practices involving each party and establishes the legal obstacles for the Comprehensive Agreement on Investment, and possible solutions. It concludes that while older investment agreements can serve as building blocks for the agreement, they also present legal issues ranging from interpretative problems to questions about domestic reforms.

Subtitling Bridget Jones’s Diary (2001) in a Chinese Context: The Transfer of Sexuality and Femininity in A Chick Flick

This paper explores how sexuality and femininity1 are transferred in the Chinese subtitles of the chick flick, Bridget Jones’s Diary (2001). In order to address this question, the article is divided into three main parts. In the first section, a review of how the film is received in the Anglophone and Chinese markets is presented respectively, also including the challenges posted to the subtitlers, e.g. the translation of sexuality and swearing in the discourse of women. The second section offers a theoretical framework that structures the paper, adopting Ernst-August Gutt’s (1986) “Relevance Theory” and Anthony Baldry and Paul Thibault’s (2006) “Multimodality” to examine how the Chinese subtitles work for primarily the Chinese female audiences. What follows is a detailed analysis of two situational categories of recurrent features (swearing and sexuality) in the Chinese subtilties of this chick flick, specifically proving constructions of feminist ideology. The paper concludes that the Chinese subtitles articulates a relatively moderate version compared to the original explicit sexuality and taboo language. Such moderation reflects an increasingly improved entanglement of feminine identity in a contemporary Chinese context.

Financial Contagion: A Tale of Three Bubbles

The primary purpose of the study is to identify and measure the properties of asset bubbles, volatility clustering, and financial contagion during three recent financial market anomalies that originated in the U.S. and Chinese markets. In particular, we focus on the 2000 DotCom Bubble, the 2008 Housing Crisis, and the 2015 Chinese Bubble. We employ three main empirical methods; the LPPL model to identify asset bubbles, the DCC-GARCH model to measure volatility clustering, and the Diebold-Yilmaz volatility spillover index to measure the level of financial contagion. We provide robust evidence that during the DotCom bubble there was very limited spillover between the S&P 500, the Shanghai, and the Shenzhen Composite Indexes. However, there was significantly more spillover effects in the two more recent crises, i.e., the Housing crisis and the 2015 Chinese Bubble. Together, these results highlight the fact that as financial markets have become more globalized, there are greater levels of volatility transmission and correspondingly fewer potential benefits from international diversification.