In terms of drivers, the issuance size plays a crucial role in both categories, with market liquidity
more abundant for bonds that have a benchmark status and are issued in larger volumes in the sovereign segment with outstanding amounts being the main bond-level drivers in the corporate segment.
It will have repercussions on the retail participants and market liquidity
Al Khaled said, "Kuwait's classification as a secondary emerging market puts the Boursa Kuwait and the locally listed companies on the map for institutional investors, which will naturally increase market liquidity
given the allocation that passive funds are likely to be deploying towards.
If a hint of inflation appears, higher interest rates will result in weaker balance sheet growth, less market liquidity
, greater volatility, and plummeting asset prices.
Examples of authors who used trading volume or turnover (volume in terms of the amount of securities issued) as a proxy for market liquidity
in their articles are: Demsetz (1968), Datar, Naik, and Radcliffe (1998), Chordia, Roll, and Subrahmanyan (2011), and, in Brazil, Correia and Amaral (2012).
In recent years, financial market participants have become increasingly worried about the significant decline in the level and resilience of financial market liquidity
, raising concerns over the efficiency of markets and the increased risks associated with a liquidity shock.
About the activity of the Central Bank, the Board noted the contents of work of the Monetary Policy Committee which met March 28, 2016 and reviewed proposals put forward to strengthen the policy instruments of the central bank to regulate the money market liquidity
There is some argument that the regulatory onslaught since the financial crisis has negatively affected market liquidity
, causing higher liquidity costs and more illiquidity events.
represents the ability of rapidly trading the high volumes of shares without the current price and low cost transaction being affected (Pastor and Stambaugh, 2003).At times of reduced market liquidity
, companies have different degrees of efficiency and this efficiency considering the degree of risk aversion and market volatility is moderated between investors and market makers (Acharya and Pedersen, 2005; Brunnermeier and Pedersen, 2009; Chordia et al., 2000; Pastor and Stambaugh, 2003).
The bank said overall market liquidity
was comfortable, but indicated a willingness to take further measures.
The lack of market liquidity
, foreign ownership concerns, and local currency stability issues limit its ability to be considered a frontier market, S&P said.
The SCA's adoption of international standards has positive results on market liquidity
, transparency and in-depth.