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
Assoc. Prof. Dr. Lim Kian Ping
Department of Economics
Faculty of Economics and Administration
University of Malaya
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/
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.
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.