Competitiveness in the Ukrainian stock market and local crisis of 2013–2015

The purpose of this paper is to investigate whether a change in stock price synchronicity after IFRS adoption differs by industry characteristics. IFRS adoption was expected to improve earnings quality and comparability. Industry concentration and homogeneity are utilized as industry characteristics, which are known as determinants to earnings quality and comparability to examine IFRS adoption effect on the synchronicity.
Using Korean firms listed from 2006 to 2015, the author found that stock price synchronicity decreases after IFRS adoption. The reduction in synchronicity is larger for firms in a concentrated industry. However, the researcher didn’t find that incremental effect of homogeneity on synchronicity changes around IFRS adoption. These results remain unchanged after several robustness tests. The results imply that earnings quality after IFRS adoption improves, while comparability effect is not evident in the Korean market.
The paper has implications that co-movement of stock price decreases after IFRS adoption in that delivering firm-specific information to investors; in addition, the magnitude of impacts of IFRS adoption differs by the industry characteristics. The author extends prior studies about IFRS adoption effect on the capital market by providing that the effects need to be examined after considering the industry characteristics.

Ukrainian banking institutions conduct their activity under the influence of various risks, which create critical situations for them. In this context, banks should pay more attention to their own security. The article analyzes the theoretical approaches to the concept of “banking security”, examines the level of banking security as a component of the financial and economic security of the state, and determines the ways to improve it. Banking security was analyzed based on the data of the National Bank of Ukraine and other banks that are part of the banking system of the country.
The current state of the banking system shows a decrease in the security since 2014 to the “danger zone”. This is facilitated by a great number of problem loans and foreign capital in the authorized capital of banks; the predominance of short-term lending over long-term one; continued unprofitableness and low liquidity of bank assets. Banking security was the guarantor of achieving financial security of the state. Therefore, the article outlines directions for improving the operation of banking institutions and the banking system as a whole, which will allow to improve banking security in the short term. This is, first of all, the legislative consolidation of the creditor rights protection, the expansion of the lending process, including in foreign currency, with the predomi-nance of long-term loans, the banks’ work in the direction of increasing their assets profitability, optimizing administrative costs, developing and using the latest informa¬tion technology to ensure the effective operation and information security of banks.

This paper examines reactions in the Ukrainian stock market to force majeure events, which are divided into four groups: economic force majeure, social force majeure, terrorist acts, natural and technological disasters. More specifically, using daily data for the main Ukrainian stock market index (namely PFTS) over the period from January 1, to December 31, 2018 this study investigates whether or not force majeure events create (temporary) inefficiencies and there exist profitable trading strategies based on exploiting them. For this purpose, cumulative abnormal returns and trading simulation approaches are used in addition to Student’s t-tests. The results suggest that the Ukrainian stock market absorbs new information rather fast. Negative returns in most cases are observed only on the day of the event. The only exception is technological disasters, the market needing up to ten days to react fully in this case. Despite the presence of a detectable pattern in price behavior after force majeure events (namely, a price decrease on the day of the event) no profitable trading strategies based on it are found as their outcomes do not differ from those generated by random trading.