Open AccessThe risk level of Vietnam non-banking investment and financial services industry under financial leverage during and after the global crisis 2007-2011
Author(s) -
Dinh Tran Ngoc Huy
Publication year - 2013
Publication title -
risk governance and control: financial markets and institutions
Language(s) - English
Resource type - Journals
eISSN - 2077-4303
pISSN - 2077-429X
DOI - 10.22495/rgcv3i3art5
Subject(s) - leverage (statistics) , financial crisis , business , financial system , equity (law) , operating leverage , financial services , finance , economics , machine learning , computer science , political science , law , macroeconomics , profitability index
This paper estimates the impacts of external financing on market risk for the listed firms in the Viet nam non-banking financial services industry, esp. after the financial crisis 2007-2009. First, by using quantitative and analytical methods to estimate asset and equity beta of total 10 listed companies in Vietnam non-banking financial services industry with a proper traditional model, we found out that the beta values, in general, for many institutions are acceptable. Second, under 3 different scenarios of changing leverage (in 2011 financial reports, 30% up and 20% down), we recognized that the risk level, measured by equity and asset beta mean, decreases when leverage increases to 30% and vice versa. Third, by changing leverage in 3 scenarios, we recognized the dispersion of risk level increases (measured by equity beta var) if the leverage decreases down to 20%. Finally, this paper provides some outcomes that could provide companies and government more evidence in establishing their policies in governance.