Finance and Management - rubric Financial markets

Abstract: This article explores the question of defining the utility function of an investor within the framework of solving of investor’s problem. Due to their characteristic features, the securities afford an opportunity to the financial market participants to implement various focus strategies in the area of investment management. The basic idea of investment decision-making implies the optimization of utility as a method for achieving the utmost possible utility within the existing budget. The final solution of optimization process is the conclusion on the content and volume of procured products and services at a particular price, and represents consumer choice. Due to popularity of portfolio investment, the analysis of approaches towards modeling of the investor’s preferences is of great practical and theoretical interest. Theoretical models for analyzing the investor’s preferences, namely the utility function, comprise the subject of this research. It is established that in the context of economic practice, from the investors’ perspective, application of the utility function tools is complicated and requires improvement, because is extremely difficult to interpret the interrelation of any securities with others, due to the reason that investment appeal of the assets is affected by an entire set of factors, and the question of their determination or comparison is yet insufficiently studied. Based on examination and critical approach to scientific works of the founders and successors of the portfolio theory, as well as their perception of the elements of the utility function, the author suggests ways for improving the considered approach.

DOI: 10.25136/2409-7802.2019.4.30826

Abstract: The subject of this research is the approaches towards management of market capitalization of stock companies. The market capitalization is defined as company’s outstanding shares multiplied by the current market price of one share. The object of this research is the management of market capitalization of stock companies. The author meticulously examines such aspects of the topic as the management of market capitalization on the basis of controlling the price of a share and quantity of outstanding shares. Special attention is given to the theoretical approaches towards management developed by the foreign and Russian economists. The article also underlines methods of assessing capitalization management, based on market data and internal company data. A conclusion is made that there are three forms of capitalization management: within the framework of cost control on the company level; on the basis of share value control; on the basis of adjusting the quantity of outstanding shares, which in some research is attributed to cost control. Leaning on the analysis of the concepts of capitalization management, external and internal methods of capitalization management can be outlined. The author’s contribution consists in determination and synthesis of the key approaches towards management of market capitalization of stock companies.

DOI: 10.25136/2409-7802.2023.1.39829

Abstract: Bank lending to small and medium-sized enterprises is an established and integral element of Russia's market economy. Over the past three years there has been a positive trend in the development of bank corporate lending, including the introduction into national practice of a new form of asset-based lending (ABL). Scientific works of Russian and foreign economists and lawyers were used as materials for the study. The study was based on the statistical database of the Central Bank of the Russian Federation and the statistics of the national project «Small and Medium Entrepreneurship and Support of Individual Entrepreneurial Initiative». We used general methods of scientific knowledge: methods of empirical (comparison, observation) and theoretical (analysis, synthesis) research to study the main indicators of the lending (financing) market for small and medium enterprises (the dynamics of the volume of loans, the dynamics of the number of loans, the dynamics of the number of SMEs receiving credit, the dynamics of debt on loans granted to SMEs, including overdue). The applied research methods allowed us to analyze the SME lending market and identify the main factors affecting the SME lending market in Russia - high interest rates, as well as the growth of overdue loans. Share of overdue loans has averaged 10-15% in different reporting months over the past two years (the analyzed period from April 2019 to April 2021). This study examines current trends in lending to SMEs in Russia, especially the emergence of ABL, which have been underrepresented in recent literature. Recommendations are developed to increase the share of asset-based lending, as well as to increase its volume. The materials of the study can be useful to scholars dealing with this issue, government regulators, as well as commercial banks (including banks with state participation) and factoring finance companies.

DOI: 10.25136/2409-7802.2020.4.34638

Abstract: The financial system of the Russian Federation is currently facing deterioration of the conditions of external business environment. The spread of the coronavirus infection COVID-19 turned 2020 into the most difficult year for development of banking system of the Russian Federation. This article is dedicated to the research analysis of practical role of securitization as a mechanism and method used in management of the internal liquidity of a commercial bank. The relevance of this study is substantiated by the need to improve the mechanisms of financial risk management, which emerge in activity of credit institutions that experience a shortfall of internal liquidity of the assets. Methodological framework is comprised of the general scientific methods of cognition of economic phenomena, which allowed viewing the relevant tools of managing the liquidity of commercial banks and indicating most topical issues and barriers. The research is based on the combination of normative and positive analysis, principles of uniformity of historical and logical, as well as analytical approach towards studying the economic phenomena that reflect the contradictory nature of social processes. The article examines the relevant problems of formation of the internal liquidity of banking sector of the Russian Federation; as well as theoretical aspects of the concept of “liquidity” of a commercial bank. Description Is given to the mechanism of managing the liquidity of a commercial bank. The author considers the fundamentals and characteristic of securitization as a method of managing liquidity of a bank, and lists the advantages of using securitization in ensuring internal liquidity of banking activity. The benefits of securitization as a method of managing the liquidity of commercial banks in the Russian Federation are analyzed.

DOI: 10.25136/2409-7802.2019.2.30133

Abstract: The subject of this research is the category of risk of the investment portfolio. Currently, stock market is one of the key structural elements of financial system of any country’s economy. Investing into the market financial assets can benefit both, legal and private entities. Competent management of the investment portfolio allow obtaining an acceptable level of income; however, suggests a qualitative and quantitative risk analysis accompanying the investment process. The complexity of risk phenomena, represented by multiple ambiguously related factors, peculiarities of manifestation of risk in different spheres of activities of economic entities, substantiate the need for a comprehensive examination of these factors and application of its results in risk management practice of the organization as a whole, as well as within the framework of its investment activity in particular. This article is dedicated to the analysis of classification of risks faced by the investor in terms of formation of securities portfolio. The author proposed the definition of financial risk that allows reflecting the multiplicity of its form at the level of an independent investment or investment portfolio. The scientific novelty lies in formulation of the definition of financial risk of the investment portfolio as the system of qualitatively irreducible factors, each of which characterizes potentially unfavorable set of circumstances accompanying the investment process, as well as overcoming the traditional for investment analysis direct identification of risk with volatility of qualitative factors defining both, an independent investment, as well as investment portfolio.

DOI: 10.25136/2409-7802.2022.3.38305

Abstract: The article examines the genesis and technologies of the cryptocurrencies, presents data from leading cryptocurrencies platforms for the purpose of in-depth analysis of the current market situation. In recent years, there has been a significant growth of the cryptocurrency market, the development of new technologies and products on the market, as well as an increase in its influence on more traditional financial markets. In this regard, the issue of regulating cryptocurrencies at the national and supranational levels is becoming increasingly relevant. The subjects of the research are the international cryptocurrency market, the technology of the distribution register, the experience of various countries in regulating the issuance and circulation of cryptocurrencies. Based on the results of the study, the authors identified current trends in the global cryptocurrency market. According to the authors, it is practically impossible to completely ban the issue and turnover of cryptocurrencies by the state due to their decentralized nature. Regulation of the cryptocurrency market is a new source of funds for the tax budget, and will also contribute to the further development of the field of digital technologies. In the article, the authors investigated the approaches a number of countries in the direction of regulation and legalization of the cryptocurrency market, which can be used as an example in the process of creating a regulatory framework for the Russian cryptocurrency market.

DOI: 10.25136/2409-7802.2022.4.34336

Abstract: The subject of the study is the methods of risk management of participants in the digital financial market. The instrument of the financial market regulator "regulatory sandbox" is currently being actively used or is being prepared for use in developed and developing countries, including the Russian Federation. The digital experimental environment – the author's interpretation of the regulatory sandbox – allows for live, time-limited testing of an innovative financial product or service under constant supervision and in cooperation with the regulator, allowing to reduce the risks not only of the regulator and other participants in the digital financial market, but also of end users of the service, increasing the safety and reliability of the latter. The main conclusions of the study are, firstly, the formation of an improved concept of the regulatory instrument of the financial regulator - a digital experimental environment, which is based on the best practices of the introduction and use of such regulatory instruments by regulators of foreign countries. Within the framework of the concept, the author presents the principles of the organization of the digital experimental environment, goals and objectives, risks, principles of organization, statistics on the timing of the application for participation and the experiment. Secondly, the identification of alternative methods to the regulatory sandbox, including the wait-and-see method and active monitoring. Thirdly, the risks of the regulator arising from the digital transformation of the financial market have been identified.

DOI: 10.25136/2409-7802.2018.2.25876

Abstract: Within the framework of the present research, Tishko examines the market mechanism of the relationship between the company value and approaches to managing the market capital structure in Russia. The researcher defines and explains the grounds for essential trends in the business value as a result of approaches that are used to manage the market capital on the stock market. The author gives recommendations and particular strategies that can be used to increase the transparency of the market pricing of emitter's equities through increasing and maintaining a stable high level of the share of freely negotiable equities as well as recommendations regarding securities portfolio building. Within the framework of this research, the author has carried out the qualitative and quantitative analysis (the latter being carried out using the MS Excel application) that demonstrate the dynamics of the aforesaid indicators for the period since 2008 till 2017. The results of this calculation completed with the further empirical analysis of the results conclusively prove that the methods of managing the market capital structure offered by the author of the article are quite applicable to predict both the investment profitability from the side of potential investors and current stockholders, and benefits an emitter may receive from equity financing in the long-term perspective.

DOI: 10.25136/2409-7802.2023.2.40510

Abstract: The subject of the research of this article is to identify the relationship between financial multipliers and the expected volatility (implied volatility) of shares of companies in the software sector of the United States. The purpose of the work is to investigate and characterize the effects of expected volatility on the undervaluation or overvaluation of company shares. The object of this study are 38 largest companies in the software sector with a capitalization of more than $ 5 billion. Special attention is paid to the nonparametric Tail model, which allows us to identify and confirm the existence of a relationship between the level of expected volatility and the logarithm of the growth rate of the financial multiplier. The very novelty of the proposed article lies, firstly, in the fact that the analysis was carried out in the coronavirus era, which is timely and interesting, since the Covid-19 pandemic had a serious impact not only on the lives and health of citizens, but also on financial markets. Secondly, interest in this topic cannot weaken due to the constant development and modification of financial markets, which forces investors to develop new and new approaches to evaluating companies for profit. Identifying undervalued companies in the financial market is one of the key goals of analysts and investors, since timely finding companies whose fair value is currently undervalued can bring significantly more income than investing in companies whose stock value is fairly valued. The results achieved within the framework of the conducted research are of practical significance, since they allow us to rank the identified companies with the same level of undervaluation by the value of expected volatility and, thereby, choose the most attractive for investments.

DOI: 10.25136/2409-7802.2022.3.38766

Abstract: Currently, the popularity of cryptocurrencies as an investment asset is growing, bitcoin is the most attractive among them, since it is the oldest instrument in this market. In this paper, the authors examined the advantages and disadvantages of the cryptocurrency in question, the history of its creation. The analysis of the effectiveness of the inclusion of the digital asset in question into the structure of an investment portfolio consisting of assets of various classes was carried out using the Harry Markowitz portfolio theory. The relevance of the chosen topic is confirmed due to the popularity of digital assets in modern conditions. The existing gaps in the legal regulation of their turnover are gradually being filled, and institutional investors are increasingly investing in the purchase of cryptocurrencies. The results of the study indicate a significant increase in the profitability of the investment portfolio after the addition of bitcoin, which can in some proportion become an effective substitute for investments in the stock market of American companies. The analysis revealed a high degree of mutual correlation between the dynamics of the bitcoin price and the S&P 500 index. The construction of the regression equation and the calculation of the determination coefficient give reason to believe that the dynamics of the S&P 500 index by 92.25% correlate with fluctuations of the price of bitcoin, which is due, apparently, to the attractiveness of the new and tempting investors with the profitability of the cryptocurrency market. The results obtained, on the one hand, indicate the possibility of using technical and fundamental analysis tools to work with crypto assets, on the other hand, the convergence of the behavior of this type of asset with changes in traditional market benchmarks.

DOI: 10.25136/2409-7802.2019.3.30632

Abstract: This article is dedicates to peculiarities of the periods of relative stability of the Russian ruble. The subject of this research is the period of instability on the financial market that has begun in November 2014. The author examines and analyzes the role of the exchange rate mechanism in establishment of financial stability and sustainable economic growth. The article suggests as overviews of some possible commercial strategies related to the rate of the ruble during transitional period. The author provides an econometric forecast structured on the basis of the RUB/USD exchange rate, as well as compares the actual and projected values. The study leans on the general scientific methods (analysis, synthesis and comparison), table and graphic interpretation of statistical information, time series, econometric modeling with the use of EViews software designed for researching and forecasting economic processes. The author draws the conclusion that the sequence of large gains of spring strategy on the ruble’s exchange rate in 2015 and 2016 continued in a fairly small gain in 2017, while the spring of 2018 was a loss, and actual stabilization of ruble for the spring 2019 period consisted of 5.11%. The author confirms the thesis on stabilization of the Russian economy; however, in the conditions of stabilization of the economy, the strategy structures on the historical data on the periodic sequence of appreciation and depreciation of the ruble becomes more and more risky. The novelty of this article lies in econometric study of the repetitive periods of relative stability of the ruble exchange rate during Russia’s contemporary history structured on the basis of forecast model.

DOI: 10.25136/2409-7802.2017.2.23111

Abstract: The object of the present research is the Islamic Finance that is, in fact, an alternative to the classifical financial system based on the Islamic law (Sharia). Over the past years the world market of the Islamic Finance has been growing rapidly, however, it has faced the problem of inconformity of the financial tools structure to the Sharia as a result of the absence of efficient regulation mechanisms. Some Sharia researchers have critisized existing Islamic financial tools for their similarit to traditional (classical) tools. The subject of the present research is the Sukuk (Islamic securities) as the instruments of the Islamic Finance. The author examines various kinds of these instruments and their conformity to the Sharia. The research method chosen by the author is the comparative analysis. In his research Sardarov has compared two approaches to developing Islamic financial instruments. The first approach views these instruments from the practical point of view and the second approach views them from the religious point of view. The novelty of the present research is caused by the fact that the Islamic Finance instruments are a relatively new trend both in Russia and the other world. The aim of the present research is to analyze the main Islaimic Finance instruments. The purpose of the article is to understand how these instruments should be structured so that they would conform to Islamic standards, on the one hand, and be actual and efficient, on the other hand. According to the author, this would allow the financial market to develop further.

DOI: 10.25136/2409-7802.2019.1.28923

Abstract: The goal of this work is the examination of practical experience of insurance use form protecting national and foreign healthcare providers from professional liability risks. The subject of this research is the types, methods and terms of professional liability insurance of healthcare providers in Russia and abroad. Despite the heightened risk of liability in the conditions of insufficient funding, the national clinics are reluctant to use insurance products for protecting their interests. At the same time, in the economically developed countries, purchasing insurance is one of the intrinsic attributes of healthcare activity; a direct role in this regard is played mutual insurance companies and specialized healthcare associations. In the course of this research, the author analyzes the main types of professional liability insurance – tort liability insurance and no-fault liability insurance. The article reviews the national legislative acts applicable to possibility of healthcare liability insurance, as well as determines a number of regulatory discrepancies and contradictions that impede proliferation of healthcare insurance coverage. The research results define the key merits and demerits of the use of models of commercial and mutual insurance for covering the indicated risks. The author’s special contribution consists in the analysis of foreign experience of healthcare liability insurance, considering statistical indicators, key actors, obstacles and development prospect of the Russian market of healthcare liability insurance.

DOI: 10.7256/2409-7802.2016.2.16962

Abstract: The subject of the present research is the economic relations arising in the process of private banking services provided by commercial banks to wealthy customers. Privileged elite customers of banking establishments provide an opportunity for the growth of quick assets as a significant part of bank's profits. Universally recognized experts in Private Banking are Switzerland, Luxembourg and Monaco. Private Banking has come to Russia just recently. The majority of Russian banks offer privileged services to customers but according to many experts, the appearance of true Private Banking is still awhile away from now in Russia. However, this sphere of banking activity is undoubtedly developing. The methodological basis of the present research includes systems, historical, sociological, comparative methods of research, case study method as well as general research methods such as generalization, induction and deduction. As a result of the research the authors make a conclusion that in order to develop the sphere of Private Banking in Russia it is necessary to extend banking units that render Private Banking services, to assign a professional manager for each customer, to use international experience by Russian banks and government regulation of this sphere.

DOI: 10.7256/2409-7802.2016.4.16550

Abstract: Consumer crediting shows a prominent aspect in the decision of social problems. As creditors not only banks and the credit organizations, but also the trading companies, also citizens or the enterprises on whom citizens work in this case can act. During crisis in economy the disturbing phenomena are observed. In given article the situation in the market of crediting in Russia in conditions of crisis is considered, the basic tendencies of the market of consumer crediting are analyze. Objective of the given work is not only the analysis of the market of consumer crediting of the Russian Federation now, but also consideration of expediency of decision-making on a capture of the credit in realities of economic and political conditions on a world scene. Dynamics of interest rates under consumer credits during crisis 2014-2015 is investigate, variation of volume of crediting of physical bodies is considered. As a result of research answers to questions on are given how to act to citizens during economic instability, and whether it is necessary to take the consumer credit at present time. The author reveals dynamics of volumes of crediting of physical bodies in the first quarter 2015. The consumer credit is the convenient economic tool. The market of consumer crediting shows high paces of growth though gradual delay of an increase of the given parameter recently is observe. It is possible to assume, that data about decrease in paces of growth are connected with decrease in growth of GDP, strengthening household debt load, to introduction of additional requirements to capitals of banks, a disparity economic and political situation, uncertainty of the population in tomorrow. The author makes a conclusion that now the population should refuse short-term loans as external events on political and financial arena can assist reduction of wages, and it, in turn, can turn back the extremely negative consequences.

DOI: 10.7256/2409-7802.2016.4.18953

Abstract: The subject of research is the process of microfinance services market development and methods of its control. The relevance of the chosen subject is due to the divergence of goal-setting and tseledostizhencheskoy function in the formation of the legal framework for the effective functioning of the financial services market in the region. Featuring in the last decade an exponential upward trend, however, the market mikrofinsovyh services in its development has generated a lot of problems in lending to the insolvent population. Avalanche-like growth of arrears contributed to the emergence of informal collectors of services beyond the civilized ways of forced debt collection. The reaction of the individual regions on the increase in social conflicts in this regard was to ban the activities of collectors that the media was seen as a manifestation of separatism. At the same time the root cause of conflicts that arise to return the debt many consider unreasonably high interest rates, which make loans to microfinance institutions, offering first streamline their activities. The article focuses on the positive scenario of the development of services in the field of microfinance, taking into account the historical Russian and foreign experience.The methodology is based on the use of the subjective approach based on the analysis of economic phenomena, where the economic entity acting on the world, serves as the starting point, and an object of economic analysis is the behavior of the subject of the economy, in particular the microfinance market institutions. At the same time the need and usefulness of the services provided by the subject is seen as a major category. Also applies a positive and normative analysis, which represented the basis of the first vision of economic processes and phenomena as they are, and at the base of a second - what should be. Because the processes and phenomena develop and improve or go away from the life that is in constant dialectical movement, the inner connection of phenomena that exist in reality and in their development, are studied with the use of the dialectical-materialist approach.According to the study, we can conclude that we should proceed from the interests of the regions, and at the heart of regulatory mechanisms should be territorial and functional differentiation of the activities of various financial market institutions, contributes to a more effective control in regulating the microfinance services market. Only strict restrictive norms will contribute to the effective development of the microfinance services market and curb opportunism of economic entities of the microfinance market, when the alleged statutory objectives are untrue and at odds with the social objectives of welfare improvement. The element of novelty of this study is the change in the methodological approach to defining the field of activity of institutions of microfinance market.

DOI: 10.7256/2409-7802.2016.4.20743

Abstract: In this article the authors examines the nature of mortgage lending. The object of research is the market of mortgage housing crediting in the conditions of crisis. The subject of research is a set of economic relations developing between participants of the market of mortgage lending. In the result of the analysis of mortgage lending the main problems: the difficult economic situation in the country, high interest rates on mortgage loans, insufficient stimulation of demand and supply in the mortgage market, the low level of development of the market of securitization of loans, etc. Main research methods are a systematic approach, analysis and synthesis, document analysis, comparative analysis, statistical data analysis. Conclusions scientific novelty. As a solution to these problems is proposed to develop the interaction between government and participants of the mortgage lending market by improving the legislative framework of the mortgage market, formation of conditions and programs that stimulate supply and demand in this segment of the financial sector, improving infrastructure, bringing additional financial resources of subjects of the Russian economy on the market of residential mortgage loans. The statistical base of the study served as indicators of the market of housing (mortgage housing) lending the Bank of Russia.