The Impact of Covid-19 on the Automobile and Allied Sectors

This paper examines the impact of Covid-19 outbreak on the automobile and allied sector. The role of the automobile sector is significant in the overall economy in India. We have used event study methodology to capture the price impact on account of the Covid-19 outbreak. We found that automobile sector and allied sector have witness the negative impact on the event of the pandemic. We have presented the daily and period wise results to provide clear cut understanding about the impact of Covid-19 outbreak on the automobile and allied sectors. This paper contributes in the extreme event literature and help decision makers to hedge their position during the extreme events.

Estimating the Reduction in Future Fleet-Level CO2 Emissions From Sustainable Aviation Fuel

With rising concerns over commercial aviation’s contribution to global carbon emissions, the aviation industry faces tremendous pressure to adopt advanced solutions for reducing its share of CO2 emissions. One near-term potential solution to mitigate this global emissions situation is to operate existing aircraft with sustainable aviation fuel (SAF); this solution requires almost no modification to current aircraft, making it the “quickest” approach to reduce aviation carbon emissions, albeit the actual impact will be determined by the degree to which airlines adopt and use SAF, the ticket price impact of SAF, and the future growth of travel demand. This article presents results that estimate the expected fleet-wide emissions of future airline operations using SAF considering various projected traveler demand and biofuel penetration/utilization levels. The work demonstrates an approach to make these predictions by modeling the behavior of a profit-seeking airline using the Fleet-Level Environmental Evaluation Tool (FLEET). Considering five future SAF scenarios and two future passenger demand projection scenarios, FLEET estimates future fleet-level CO2 emissions, showcasing the possible upper and lower bounds on future aviation emissions when SAF is introduced for use in airline fleets. Results show that the future fleet-level CO2 emissions for all scenarios with SAF are lower than the baseline scenario with no SAF, for all demand projection scenarios. The passenger demand served and the trips flown for a given SAF scenario depends on the SAF price and the biofuel penetration levels. This shows that even if airlines serve a higher passenger demand for some future scenarios, the carbon emissions could still be lower than the current baseline scenario where airlines only use conventional jet fuel.

Energy and Environmental Assessment of Steam Management Optimization in an Ethylene Plant

Steam crackers (ethylene plants) belong to the most complex industrial plants and offer significant potential for energy-saving translated into the reduction of greenhouse gas emissions. Steam export to or import from adjacent units or complexes can boost the associated financial benefit, but its energy and environmental impact are questionable. A study was carried out on a medium-capacity ethylene plant using field data to: 1. Estimate the energy savings potential achievable by optimizing internal steam management and optimizing steam export/import; 2. Quantify the associated change in air pollutant emissions; 3. Analyze the impact of the increasing carbon price on the measures adopted. Internal steam management optimization yielded steam let-down rate minimization and resulted in a 5% (87 TJ/year) reduction in steam cracker’s steam boiler fuel consumption and the associated cut of CO2 emissions by almost 4900 t/year and that of NOx emissions by more than 5 t/year. Steam import to the ethylene plant from the refinery proved to be purely economic-driven, as it increased the net fuel consumption of the ethylene plant and the refinery complex by 12 TJ/year and resulted in an increase of net emissions of nearly all considered air pollutants (more than 7000 t/year of CO2, over 15 t/year of NOx, over 18 t/year of SOx) except for CO, where the net change was almost zero. The effect of external emissions change due to the associated backpressure electricity production surplus (over 11 GWh/year) was too low to compensate for this increase unless fossil fuel-based electricity production was considered. The increase of carbon price impact on the internal steam management optimization economics was favorable, while a switch to steam export from the ethylene plant, instead of steam import, might be feasible if the carbon price increased to over 100 €/tCO2.

The Informational Response of Different Investor Types on Futures Return Fluctuations: Evidence from Taiwan’s Index Futures Market

This article examines the price impact of different types of investors' trading activities in the Taiwan index futures market on the market, and explores the information roles of different types of investors. We find the trading volumes of different investors in the index futures market affect futures returns through information. The impact on index futures returns in the current period is small, showing the ability of foreign institutional investors to quickly respond to negative news and obtain information advantages. Further, from the MSE and QLIKE loss functions, individual investors use EGARCH(1,1), domestic institutional investors TGARCH(1,1), and foreign institutional investors GARCH(1,1). Further, the imbalance of buy and sell orders is suitable for the fluctuation of futures returns using EGARCH(1,1).

Optimal Liquidity-Based Trading Tactics

We consider an agent who needs to buy (or sell) a relatively small amount of assets over some fixed short time interval. We work at the highest frequency meaning that we wish to find the optimal tactic to execute our quantity using limit orders, market orders, and cancellations. To solve the agent’s control problem, we build an order book model and optimize an expected utility function based on our price impact. We derive the equations satisfied by the optimal strategy and solve them numerically. Moreover, we show that our optimal tactic enables us to outperform significantly naive execution strategies.

Energy and Bank Equity Interactions

Oil price shocks harm real output and bank and industrial profit in most oil-importing countries, which has motivated us to investigate the impact of these shocks on the equity performance of banking industries. To fulfill the research objectives, we involve a sample of developed and emerging economies for comparison purposes. The objective of employing the Toda and Yamamoto (Journal of econometrics, 1995, 66 (1), 225–250) causality test is to explore the time-variant relationship between oil prices and banking indices to investigate how oil price shocks affect the performance of country-specific banking industries. In addition, an impulse response function and variance decomposition analysis are utilized to, respectively, examine the time-variant relationship between oil price shocks and macroeconomic factors and the performance of the banking sector. Results vary across different economies in our sample, but the magnitude of oil price impact is relatively significant in the US, the UK, Canada, Japan, Mexico, and Brazil. The findings indicate that oil price rises adversely affect equity bank indices in developed and emerging economics except for Mexico. Notably, our findings show that oil prices and interest rates jointly have significant power in explaining the banking equity variation and suggest that international bank portfolio investors should consider hedging oil price risk.