Liquidity may be evident at first glance, as it is widely debated in the literature, but regarding the question on the threshold at which a stock market is liquid, the answers are far from being evident and unanimous. This paper studies the determinants of liquidity in the West African Regional Stock Exchange through the level of float and investors behavior based on a conceptual model. The model takes into account the specificities of a market governed by players’ orders and behaviors. We analysed the scarcity of stocks and the behaviors of players based on a case study and simulation methodology. We found that investors are passive in the market, which results in under-liquidity. It can be deduced that the market is savings driven. In addition, the average time that a stock market order finds a counterpart is three to seven days. This situation is due to the scarcity of securities and / or the inability of investors to intervene in the market in a timely manner. As a result, new entrants to the market will have difficulty in offering securities, due to a lack of sufficient liquidity. In conclusion, the market liquidity depends mainly on a minimum of auctioned securities rather than investor’s participation.
| Published in | International Journal of Business and Economics Research (Volume 8, Issue 6) |
| DOI | 10.11648/j.ijber.20190806.19 |
| Page(s) | 389-398 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2019. Published by Science Publishing Group |
Liquidity, Behavior, Depth of the Market, Scarcity of Securities, Regional Stock Exchange
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APA Style
Pourakin Djarius Dieudonné Bama, Balibié Serge Auguste Bayala. (2019). Liquidity of a Stock Exchange, Between Investor Behavior and Scarcity of Securities: The Case Study of the West African Regional Stock Exchange. International Journal of Business and Economics Research, 8(6), 389-398. https://doi.org/10.11648/j.ijber.20190806.19
ACS Style
Pourakin Djarius Dieudonné Bama; Balibié Serge Auguste Bayala. Liquidity of a Stock Exchange, Between Investor Behavior and Scarcity of Securities: The Case Study of the West African Regional Stock Exchange. Int. J. Bus. Econ. Res. 2019, 8(6), 389-398. doi: 10.11648/j.ijber.20190806.19
AMA Style
Pourakin Djarius Dieudonné Bama, Balibié Serge Auguste Bayala. Liquidity of a Stock Exchange, Between Investor Behavior and Scarcity of Securities: The Case Study of the West African Regional Stock Exchange. Int J Bus Econ Res. 2019;8(6):389-398. doi: 10.11648/j.ijber.20190806.19
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Download@article{10.11648/j.ijber.20190806.19,
author = {Pourakin Djarius Dieudonné Bama and Balibié Serge Auguste Bayala},
title = {Liquidity of a Stock Exchange, Between Investor Behavior and Scarcity of Securities: The Case Study of the West African Regional Stock Exchange},
journal = {International Journal of Business and Economics Research},
volume = {8},
number = {6},
pages = {389-398},
doi = {10.11648/j.ijber.20190806.19},
url = {https://doi.org/10.11648/j.ijber.20190806.19},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190806.19},
abstract = {Liquidity may be evident at first glance, as it is widely debated in the literature, but regarding the question on the threshold at which a stock market is liquid, the answers are far from being evident and unanimous. This paper studies the determinants of liquidity in the West African Regional Stock Exchange through the level of float and investors behavior based on a conceptual model. The model takes into account the specificities of a market governed by players’ orders and behaviors. We analysed the scarcity of stocks and the behaviors of players based on a case study and simulation methodology. We found that investors are passive in the market, which results in under-liquidity. It can be deduced that the market is savings driven. In addition, the average time that a stock market order finds a counterpart is three to seven days. This situation is due to the scarcity of securities and / or the inability of investors to intervene in the market in a timely manner. As a result, new entrants to the market will have difficulty in offering securities, due to a lack of sufficient liquidity. In conclusion, the market liquidity depends mainly on a minimum of auctioned securities rather than investor’s participation.},
year = {2019}
}
TY - JOUR T1 - Liquidity of a Stock Exchange, Between Investor Behavior and Scarcity of Securities: The Case Study of the West African Regional Stock Exchange AU - Pourakin Djarius Dieudonné Bama AU - Balibié Serge Auguste Bayala Y1 - 2019/11/21 PY - 2019 N1 - https://doi.org/10.11648/j.ijber.20190806.19 DO - 10.11648/j.ijber.20190806.19 T2 - International Journal of Business and Economics Research JF - International Journal of Business and Economics Research JO - International Journal of Business and Economics Research SP - 389 EP - 398 PB - Science Publishing Group SN - 2328-756X UR - https://doi.org/10.11648/j.ijber.20190806.19 AB - Liquidity may be evident at first glance, as it is widely debated in the literature, but regarding the question on the threshold at which a stock market is liquid, the answers are far from being evident and unanimous. This paper studies the determinants of liquidity in the West African Regional Stock Exchange through the level of float and investors behavior based on a conceptual model. The model takes into account the specificities of a market governed by players’ orders and behaviors. We analysed the scarcity of stocks and the behaviors of players based on a case study and simulation methodology. We found that investors are passive in the market, which results in under-liquidity. It can be deduced that the market is savings driven. In addition, the average time that a stock market order finds a counterpart is three to seven days. This situation is due to the scarcity of securities and / or the inability of investors to intervene in the market in a timely manner. As a result, new entrants to the market will have difficulty in offering securities, due to a lack of sufficient liquidity. In conclusion, the market liquidity depends mainly on a minimum of auctioned securities rather than investor’s participation. VL - 8 IS - 6 ER -
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