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The Effect of Real Estate Finance on the Financial Performance of Listed Commercial Banks in Kenya: A Panel Evidence
Fredrick Onyango Odhiambo
Issue:
Volume 3, Issue 4, July 2015
Pages:
61-68
Received:
22 May 2015
Accepted:
28 May 2015
Published:
9 June 2015
Abstract: Over the years, real estate financing has been a preserve for mortgage financing companies. With time, commercial banks have started engaging in mortgage financing. With the rising non-performing loans among Kenyan banks, mortgages have seen as a safer bet to improve the loan portfolio performance. The study sought to investigate the effect of real estate finance on the financial performance of listed commercial banks in Kenya. Data for nine listed commercial banks was collected for the period 2009 – 2013 from the annual reports of the respective banks. Panel regression analysis was employed on the collected data. The results showed that real estate finance did not have a significant effect on the financial performance of listed commercial banks. Foreign ownership, market structure, cost of bank operations, and the size of the bank significantly influenced bank performance. The study concludes that real estate finance does not influence the financial performance of listed commercial banks. It is recommended that the Central Bank of Kenya (CBK) and stakeholders in the housing sector strategize to improve uptake of affordable mortgage loans in order to improve the overall performance of banks. This study contributes to literature by providing the link between real estate financing and the financial performance of banks from a developing country’s perspective in Sub-Saharan Africa where housing demand is on the rise and therefore offers enormous opportunity for rapid growth for banks. Further areas for research are recommended.
Abstract: Over the years, real estate financing has been a preserve for mortgage financing companies. With time, commercial banks have started engaging in mortgage financing. With the rising non-performing loans among Kenyan banks, mortgages have seen as a safer bet to improve the loan portfolio performance. The study sought to investigate the effect of real...
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The Relationship Between Volatility and Predictability of Profit
Yadollah Dakka,
Malihe Rostami
Issue:
Volume 3, Issue 4, July 2015
Pages:
69-76
Received:
30 May 2015
Accepted:
6 June 2015
Published:
19 June 2015
Abstract: This article is discussed relationship between volatility and predictability of profit. This is clear that one purposes of accounting and preparing financial statements, provide useful information to facilitate decision-making. With financial reports is done predictability for organization’s performance future. Accounting profit forecasts as a factor in economic decision-making are a favorite of investors, creditors, managers, financial analysts, and researchers. People can use this information in evaluation models, to improve the efficiency of capital markets, to assess their ability to pay, risk assessment, assessment of economic performance and stewardship of management, evaluation of how management accounting methods used in the discussion of income smoothing earnings forecasts for management decisions and use the economic, finance and accounting research. In this study to review and analyze the relationship between volatility and the ability to forecast profits in the short term and long term in an Iranian bank, in the period of 2009 till 2014. In fact, this article seeks to improve profit forecasts by variability of profits. The results show that the volatility of short-term and long-term profitability and predictability are inversely. The relationship between predictability and volatility is weaker than the relationship between predictability and the level of profits in the short-term and long-term. So, the current profit more appropriate tool to judge the predictability of earnings. Long-term and short-term profit trends mean reversion.
Abstract: This article is discussed relationship between volatility and predictability of profit. This is clear that one purposes of accounting and preparing financial statements, provide useful information to facilitate decision-making. With financial reports is done predictability for organization’s performance future. Accounting profit forecasts as a fact...
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The Influence of Macro Economic Factors on Mortgage Market Growth in Kenya
Ariemba Jared Mogaka,
Kiweu Josephat Mboya,
Riro George Kamau
Issue:
Volume 3, Issue 4, July 2015
Pages:
77-85
Received:
28 May 2015
Accepted:
6 June 2015
Published:
25 June 2015
Abstract: This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Average Yearly Exchange Rate, Percentage Informal Sector Employment, Treasury bill rate and National Savings Rate as the predictor variables. Regression Analysis was used and the study found no evidence of significant influence of inflation, average GDP growth rate, Treasury bill rate and national savings rate on total real estate loan portfolio. However, the study finds evidence of relationship between informal sector employment, the per capita income and exchange rate. However, the model showed that 81% of the variation in the dependent variable could be explained by the predictor variables.
Abstract: This study examines the influence of macro-economic variables on the growth of the mortgage market in Kenya. Panel data is collected for a 30 year period, from 1984 to 2013 on the outstanding Real Estate Loan Portfolio as the dependent variable and the macro-economic variables of Average Yearly Inflation Rate, Average Yearly GDP growth Rate, Averag...
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Macroeconomic and Firm Specific Determinants of Stock Returns: A Comparative Analysis of Stock Markets in Sri Lanka and in the United Kingdom
L. M. C. S. Menike,
P. M. Dunusinghe,
A. Ranasinghe
Issue:
Volume 3, Issue 4, July 2015
Pages:
86-96
Received:
2 June 2015
Accepted:
14 June 2015
Published:
29 June 2015
Abstract: This paper examines the relationship between macroeconomic and firm-specific determinants of stock returns of Sri Lanka and United Kingdom (UK). Our results are based on the fixed effects regression models since those perform statistically better than the random effects and pooled OLS models for Sri Lankan data and the fitted one-way fixed effects firm factor regression indicates that Return on Assets ( ROA) and sales growth rate play a significant role in explaining variation in stock returns in Sri Lankan companies while one-way random effect firm factor model in UK shows that E/P ratio, B/M ratio, fixed assets growth rate, size and ROA are the most dominants priced factors in London Stock Exchange (LSE). The explanatory power of regressions increases considerably when we incorporate macroeconomic indicators controlling for firm effects and results show that inflation, GDP and exchange rate remain leading predictors of stock returns variation in both Colombo Stock Exchange (CSE) and LSE whereas unemployment and Foreign Portfolio Investments (FPI) become statistically significant only in CSE. Thus, it is noted that stock prices of Sri Lankan and UK companies are sensitive to both company and macroeconomic fundamental changes hence, the stock market analysts and investors find that they can make fundamental base trading strategies as publicly available information play a key role in predicting future returns bringing the conclusions of the Sri Lankan stock market is in semi-strong form efficient in doubt.
Abstract: This paper examines the relationship between macroeconomic and firm-specific determinants of stock returns of Sri Lanka and United Kingdom (UK). Our results are based on the fixed effects regression models since those perform statistically better than the random effects and pooled OLS models for Sri Lankan data and the fitted one-way fixed effects ...
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The Game Between Accounting Oversight Entity and Enterprise Accounting Entity
Issue:
Volume 3, Issue 4, July 2015
Pages:
97-102
Received:
8 June 2015
Accepted:
20 June 2015
Published:
4 July 2015
Abstract: The object of study is the relationship of the game between Accounting Oversight Entity and Enterprise Accounting Entity. Using Nash Equilibrium Theory, the writer establishes the game mathematical model between Accounting Oversight Entity and Enterprise Accounting Entity. Besides, the optimal courses of action of Accounting Oversight Entity and Enterprise Accounting Entity are obtained. What’s more, the writer gets the minimum value of fine that Accounting Oversight Entity penalizes Enterprise Accounting Entity beyond accounting standards and analyses the conditions of the game mathematical model. By the way, it accounts for the common sense that the less false accounts, the larger enterprises.
Abstract: The object of study is the relationship of the game between Accounting Oversight Entity and Enterprise Accounting Entity. Using Nash Equilibrium Theory, the writer establishes the game mathematical model between Accounting Oversight Entity and Enterprise Accounting Entity. Besides, the optimal courses of action of Accounting Oversight Entity and En...
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