Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Making information available to shareholders and investors

24.06.2008
In view of the recent collapse of firms through derivative use, shareholders and potential investors need to know what to look for in the annual reports of firms in which they have an interest.

The annual report is the only document that has been put in the public domain from which members of the public can know whether their firms have indeed been using derivatives to manage risk or to speculate.

However, many firms are not disclosing the information required by shareholders in order to be able to observe the hedging process i.e. what managers do with derivatives.

Knowing what to look for in companies’ annual reports will help shareholders to be able to make rational economic decisions of which companies’ shares they should invest in.

This project is investigating the impact of recent changes in international reporting standards that demand some disclosure in the accounts of a firm's use of derivative products.

Liafisu Sina Yekini, a PhD student working on the Leicester research project, explained: “Large firms in the UK use complex financial instruments called derivatives to manage/hedge financial risks they face.

“Shareholders invest in firms because they expect some benefits in shareholding in the firms. These benefits are either in form of increased market value of the shares of these companies or in form of income derivable from profit made by them.

“In a nut shell, shareholders expect their firms to be a ‘growth’ as well as ‘income’ generating firms.

“Recent happenings in organisations have made the above the ideal or the theoretical expectations of shareholders who have invested their savings in the purchase of the shares in these firms.

“Shareholders must therefore know that by investing in the shares of these companies they are linking their financial wealth or indeed financial bankruptcy/liquidation with that of these firms.

“Managers undertake various decisions on behalf of the shareholders in firms in their attempt to achieve the firms’ objective explained above. One of such decisions is how to manage the risk that firms face."

A fellow of the Institute of Chartered Accountants, Sina Yekini qualified with Arthur Andersen and Co after which he joined the banking industry for a period of more than 10 years, mostly at management level.

Following his exposure both in practice and in the banking industry, Sina decided to explore issues that are controversial between theory and practice of accounting and finance, hence his enrolment with the University of Leicester for MSc in finance and now Ph D in accounting and finance (on going). He had earlier graduated with B. Sc in Accounting in 1988.

His research interest can be broadly grouped around risk management, foreign currency derivatives, the hedging process, information asymmetry and the accounting regulation.

The research is being presented to the public at the University of Leicester on Thursday 26th June. The Festival of Postgraduate Research introduces employers and the public to the next generation of innovators and cutting-edge researchers, and gives postgraduate researchers the opportunity to explain the real world implications of their research to a wide ranging audience.

More information about the Festival of Postgraduate Research is available at: www.le.ac.uk/gradschool/festival

Ather Mirza | alfa
Further information:
http://www.le.ac.uk/gradschool/festival

More articles from Business and Finance:

nachricht RWI/ISL Container Throughput Index: Moderate growth of world trade continues
21.05.2015 | Rheinisch-Westfälisches Institut für Wirtschaftsforschung e.V.

nachricht How long do firms live? Research finds patterns of company mortality in market data
02.04.2015 | Santa Fe Institute

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Basel Physicists Develop Efficient Method of Signal Transmission from Nanocomponents

Physicists have developed an innovative method that could enable the efficient use of nanocomponents in electronic circuits. To achieve this, they have developed a layout in which a nanocomponent is connected to two electrical conductors, which uncouple the electrical signal in a highly efficient manner. The scientists at the Department of Physics and the Swiss Nanoscience Institute at the University of Basel have published their results in the scientific journal “Nature Communications” together with their colleagues from ETH Zurich.

Electronic components are becoming smaller and smaller. Components measuring just a few nanometers – the size of around ten atoms – are already being produced...

Im Focus: IoT-based Advanced Automobile Parking Navigation System

Development and implementation of an advanced automobile parking navigation platform for parking services

To fulfill the requirements of the industry, PolyU researchers developed the Advanced Automobile Parking Navigation Platform, which includes smart devices,...

Im Focus: First electrical car ferry in the world in operation in Norway now

  • Siemens delivers electric propulsion system and charging stations with lithium-ion batteries charged from hydro power
  • Ferry only uses 150 kilowatt hours (kWh) per route and reduces cost of fuel by 60 percent
  • Milestone on the road to operating emission-free ferries

The world's first electrical car and passenger ferry powered by batteries has entered service in Norway. The ferry only uses 150 kWh per route, which...

Im Focus: Into the ice – RV Polarstern opens the arctic season by setting course for Spitsbergen

On Tuesday, 19 May 2015 the research icebreaker Polarstern will leave its home port in Bremerhaven, setting a course for the Arctic. Led by Dr Ilka Peeken from the Alfred Wegener Institute, Helmholtz Centre for Polar and Marine Research (AWI) a team of 53 researchers from 11 countries will investigate the effects of climate change in the Arctic, from the surface ice floes down to the seafloor.

RV Polarstern will enter the sea-ice zone north of Spitsbergen. Covering two shallow regions on their way to deeper waters, the scientists on board will focus...

Im Focus: Gel filled with nanosponges cleans up MRSA infections

Nanoengineers at the University of California, San Diego developed a gel filled with toxin-absorbing nanosponges that could lead to an effective treatment for skin and wound infections caused by MRSA (methicillin-resistant Staphylococcus aureus), an antibiotic-resistant bacteria. This "nanosponge-hydrogel" minimized the growth of skin lesions on mice infected with MRSA - without the use of antibiotics. The researchers recently published their findings online in Advanced Materials.

To make the nanosponge-hydrogel, the team mixed nanosponges, which are nanoparticles that absorb dangerous toxins produced by MRSA, E. coli and other...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

International symposium: trends in spatial analysis and modelling for a more sustainable land use

20.05.2015 | Event News

15th conference of the International Association of Colloid and Interface Scientists

18.05.2015 | Event News

EHFG 2015: Securing health in Europe. Balancing priorities, sharing responsibilities

12.05.2015 | Event News

 
Latest News

Mesoporous Particles for the Development of Drug Delivery System Safe to Human Bodies

22.05.2015 | Materials Sciences

Computing at the Speed of Light

22.05.2015 | Information Technology

Development of Gold Nanoparticles That Control Osteogenic Differentiation of Stem Cells

22.05.2015 | Materials Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>