Why is Liquidity important? Some Research Snippets
Date : 20/04/2014
Author: M.R Raghu
Liquidity is at the backbone of any market development and GCC stock markets are no exception. Strong oil price backed wealth effect coupled with retail nature of the market triggering speculative activity contributed to very robust liquidity levels in the past, especially before the financial crisis. Liquidity is generally measured as total value traded and is expressed as a % of total market capitalization to arrive at the velocity. A high velocity may indicate that liquidity is running ahead of the market and vice versa.
Tags: GCC Markets, Oil, Stock Market
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