Journal Press India^®

Editorial

                This issue of MUDRA: Journal of Finance and Accounting, continues in its efforts to brings together articles discussing pertinent and interesting areas of accounting and finance ranging from investors’ behavior, stock markets, microfinance institutions to mutual fund industry and strategic planning in financial sectors.

In keeping with the rising importance of the domain of behavioural finance, two papers in this issue deal with different aspects of investor behavior. The paper by Ms. Ritu Gautam and Prof. Umesh Holani explores critical factors that affect an investor’s investment decisions by using principal component factor analysis technique. Using primary data analysis, the authors identify these critical factors as awareness and knowledge of the financial market, risk perception, diversification, time horizon and income and priorities. The other study by Mr. Shiv Kant Tiwari, Dr. Prateek Kumar Bansal and Dr. Amitabha Maheshwari identifies the determinants of investors’ behaviour in stock market. Factor Analysis is applied to identify the underlying factor of variables used in study. The MANOVA result confirms that age has significant impact on reporting on external and internal environment and financial statements and time factor and income group has significant impact on expected events.

                Prof. Debabrata Mukhopadhyay in his paper on ‘Indian Stock Market and Macroeconomic Variables’ examines the predictive ability of macroeconomic variables and financial ratios for Indian stock returns based on BSE SENSEX at the level of monthly data. Using both in-sample and out-of-sample tests of predictive ability, the results show that inflation rate and change in the nominal exchange rate and the contemporaneous values of NASDAQ composite return and price-earnings ratio have significant effects for returns on BSE SENSEX.

                Mr. Mohammed Mostafa Mohammed Qaied and Dr. Kundan Basavaraj study the performance of microfinance institutions in Yemen in light of the ongoing crisis there. For a poor country like Yemen where a large part of population depends on agriculture activities, the social, economic and financial challenges make microfinance all the more important. The analysis by the authors in their paper reveals a weakness of performance of MFIs in Yemen and their ability to meet the needs of their customers.

                Mr. Peter Gwesso Matare and Prof. T.N. Sreedhara, in their paper on ‘Strategic Planning in Financial Sectors of Tanzania’ evaluate the strategic planning practices by financial sectors and how owners and managers of these financial sectors play their roles in it. The authors find that the scope of strategic planning includes environmental scanning, mission and vision, implementation incentives, time horizon of strategic planning, evaluation and control, employee involvement in strategic planning, the structure of strategic planning as well as source of information concerning the environment.

                The intense competition among Indian mutual fund industry has been captured in a paper by Dr. S. Sivaprakkash, who has analysed the level of competition among 51 equity mutual fund schemes using concentration ratio. Using asset under management values to gauge the competition level, the findings reveal a high level of competition prevailing in the Indian mutual fund industry.

                The paper on ‘The impact of institutional factors on commercial banks’ risk’ by Dr. Amit Jain and Ms. Asha Yadav, constructs a theoretical model of institutional factors on the chance of economic banks, and discusses the impact of the institutional setting on the bank risk. The analysis indicates that corruption management and political stability improves the level of the allocation of risk assets and the development of the institutional setting features a positive impact on the soundness of the banking industry.

                We hope our readers find this issue of MUDRA insightful and we thank all readers and authors for their continued patronage of MUDRA.

Wishing all our patrons a Happy New Year!

Prof. Muralidhar A. Lokhande

Dr. Jitendra Janardan Ahirrao

Dr. Pavnesh Kumar

         Editors