The appraisal of ordinary shares by Saudi investors

This paper reports on a questionnaire survey about share valuation practices among investors and their intermediaries in Saudi Arabia. The findings suggest that fundamental analysis is used most by investor respondents where a P/E multiple is applied to an earnings forecast to generate a prediction of future price. However, technical analysis is also used to a much greater extent than in developed markets. Finally, the results indicate that quarterly and annual reports as well as newspapers are widely consulted by investors when forming their expectations about share valuations.     

Do Tests of Capital Structure Theory Mean What They Say?

In the presence of frictions, firms adjust their capital structure infrequently. As a consequence, in a dynamic economy the leverage of most firms is likely to differ from the “optimum” leverage at the time of readjustment. This paper explores the empirical implications of this observation. I use a calibrated dynamic trade‐off model to simulate firms' capital structure paths. The results of standard cross‐sectional tests on these data are consistent with those reported in the empirical literature. In particular, the standard interpretation of some test results leads to the rejection of the underlying model. Taken together, the results suggest a rethinking of the way capital structure tests are conducted.     

An analysis of option pricing under systematic consumption risk using GARCH

An issue in the pricing of contingent claims is whether to account for consumption risk. This is relevant for contingent claims on stock indices, such as the FTSE 100 share price index, as investor’s desire for smooth consumption is often used to explain risk premiums on stock market portfolios, but is not used to explain risk premiums on contingent claims themselves. This paper addresses this fundamental question by allowing for consumption in an economy to be correlated with returns. Daily data on the FTSE 100 share price index are used to compare three option pricing models: the Black–Scholes option pricing model, a GARCH (1, 1) model priced under a risk-neutral framework, and a GARCH (1, 1) model priced under systematic consumption risk. The findings are that accounting for systematic consumption risk only provides improved accuracy for in-the-money call options. When the correlation between consumption and returns increases, the model that accounts for consumption risk will produce lower call option prices than observed prices for in-the-money call options. These results combined imply that the potential consumption-related premium in the market for contingent claims is constant in the case of FTSE 100 index options.     

Dynamics of photosynthetic pigments in an Andean lake in Colombia

Guatavita Lake is a small, sheltered tropical high mountain lake located in the Colombian Andes, with a closed watershed and a maximum depth of 25 m. It is the freshwater source for human consumption in nearby small towns, as well as being a site of cultural value for the country, as it was a sacred place to indigenous peoples until about five centuries ago. As the structure and function of this aquatic ecosystem is poorly understood, this study provides initial knowledge on its phytoplankton biomass dynamics, which should be useful in designing efficient management plans with environmental baseline information for similar lakes elsewhere. Physical and chemical data, and photosynthetic pigment concentrations, were measured for the period November 1999–November 2000 at the central vertical axis of Guatavita Lake. The vertical profile of the chlorophyll‐a concentration was closely related to the dissolved inorganic nitrogen concentrations and the thermal stratification characteristics. The maximum chlorophyll‐a concentration in the metalimnion was recorded for the thermal stratification period (November 1999–June 2000). Deepening of the maximum chlorophyll‐a concentration began in February, continuing to June, when it reached its lowest value at the 15 m depth. The phytoplankton biomass values showed an increment within the entire water column at the beginning of the mixing period (July). The relation between the metalimnetic peak of chlorophyll‐a and the dissolved inorganic nitrogen concentration suggests the growth of the phytoplankton community is limited mainly by the availability of nitrogen.     

RESISTANCE TO CHANGE: A PSYCHOANALYTIC CRITIQUE OF ARGYRIS AND SCHON'S CONTRIBUTIONS TO ORGANIZATION THEORY AND INTERVENTION

The purpose of this essay is to examine psychoanalytically Argyris and Schon's contributions to organization theory and intervention. The author focuses his attention on the problem of individual and organizational resistance to change in the light of Argyris and Schon's cognitive psychological assumptions about learning, reasoning, and effectiveness.     

Comparison of nutrient cycling in a surface-flow constructed wetland and in a facultative pond treating secondary effluent.

There is a growing interest in the possibilities offered by combinations of waste stabilisation ponds (WSP) and constructed wetlands (CW). The purpose of our study was to compare treatment performances and nutrient cycling in a surface-flow wetland (SFW) and in a WSP treating secondary effluent. In the period between 2000 and 2003, a pilot SFW and a pilot WSP were constructed at the outlet of the wastewater treatment plant and their performance monitored while both were active under the same conditions. The SFW was planted with Phragmites australis and Eichhornia crassipes, while in the WSP development of algae was spontaneous. Performance efficiency was monitored by means of evaluation of physical and chemical parameters in water, by measurement of plant productivity and by analysis of N and P contents in biomass. The SFW with macrophytes proved more efficient in decreasing the suspended solids (64.6%), settleable solids (91.8%), organic N (59.3%), total N (38%), COD (67.2%) and BOD5 (72.1%) than the WSP. The WSP with algae was more efficient in treatment of ammonia nitrogen (48.9%) and ortho-phosphate (43.9%). The results of this study provide data that are of help in optimising combinations of SFW and WSP.