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Shareholder Base and Stock Liquidity:  A Tale of Two Countries

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Salam Sejahtera

 

With great pleasure, the Department of Economics, Faculty of Economics and Administration, cordially invites you to the following event:

 

WEBINAR SERIES IN ECONOMICS

Shareholder Base and Stock Liquidity: 

A Tale of Two Countries

 

9th December 2020 (Wednesday) at 10.00am - 11.30am

 

 

Speaker: 

Assoc. Prof. Dr. Lim Kian Ping

Department of Economics

Faculty of Economics and Administration

University of Malaya

Moderator:

 

Dr. Khaw Lee Hwei

Department of Finance and Banking

Faculty of Business and Accountancy

University of Malaya

 

 

Register here to get the link: http://forms.gle/hpVLDJLnDPtQzmFA7 

 

 

 

ABSTRACT

 

Liquidity is crucial to the efficient functioning of secondary stock markets. Unfortunately, lower level of stock liquidity has been a common problem faced by most emerging market firms. Drawing from stocks listed on Bursa Malaysia and Shenzhen SME Board, we provide empirical evidence to show that expanding shareholder base is an effective liquidity-enhancing strategy in both the stock markets. This key driver of liquidity has been largely ignored in previous literature mainly due to the lack of quality data. To justify the inclusion of shareholder base in a liquidity model, we first assemble the theoretical channels. Our baseline and extensive robustness checks confirm that more shareholders are associated with higher liquidity, but the negative effect of wider spreads kicks in when shareholder base exceeds a threshold level, due to higher volatility induced by noise trading. The Shenzhen SME Board adds value to our research on two grounds. First, with a composition of more than 90% of the account holders are retail investors, the market provides a clean test of the noise trading channel. Second, the well-structured investor education and protection programmes by Shenzhen Stock Exchange are crucial to the expansion of shareholder base. 

SHORT BIOGRAPHY

Kian-Ping Lim is an Associate Professor at the Faculty of Economics and Administration, University of Malaya. He holds a B.B.A. (Hons.) from Universiti Kebangsaan Malaysia, a MSc. (Financial Economics) from Universiti Putra Malaysia and a PhD (Financial Economics) from Monash University. His research and scholarship are greatly influenced by the doctoral training at Monash and he intends to further build on his discipline-specific expertise through publications in leading financial economics journals. He reckons that the 4-year PhD journey is the most productive phase of his academic career, with 18 published papers written during his candidature. The first decade of his career was dedicated to research on stock price efficiency, advocating measurements of relative and evolving efficiency that are consistent with the adaptive market hypothesis. After securing a FRGS grant in 2014, Kian-Ping ventures into the area of stock liquidity. His Bursa liquidity project advocates a new liquidity measurement for Malaysian public listed stocks which sheds new insights into aggregate- and firm-level liquidity of the local bourse. The grant produces 2 PhD students and 6 published journal articles (1 indexed by Scopus and 5 indexed by SSCI- 2Q1 & 3Q2), with 2 more articles currently under review. With the recent registration of 4 new PhD students from China under his supervision, the third phase of his career will focus on the equity markets of this second largest world economy. The research profile of Kian-Ping is available at: www.kianpinglim.com

 

Flyer for Dr. Lim Kian Ping webinar (3) V2.jpg
Flyer for Dr. Lim Kian Ping webinar (3) V2 2.jpg
For inquiries, please email to elyanabila@um.edu.my
We look forward to welcoming you to this webinar and thank you for your kind attention.

Dec 04, 2020 10.00 AM - 10.30 AM Department of Economics, Faculty of Economics and Administration -