Hybrid securities and commodity swaps; tools to hedge risk in emerging stock markets: Theoretical approach

This study presents hybrid securities and commodity swaps as a diversification channel in emerging stock markets, in particular, Gulf Cooperation Council (GCC). It is evident that derivative markets play a crucial part in the global financial system. The use of hybrid securities as a tool to hedge r...

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Bibliographic Details
Published in:Journal of derivatives & hedge funds 2007-05, Vol.13 (1), p.26-32
Main Author: Abumustafa, Naser I
Format: Article
Language:English
Subjects:
Administrative expenses
Commodities
Commodities trading
Derivatives
Emerging markets
Equity
Financial instruments
Futures
Hedging
Interest rate swaps
Investments
Investors
Preferred stock
Prices
Risk management
Securities markets
Stock exchanges
Studies
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Summary:This study presents hybrid securities and commodity swaps as a diversification channel in emerging stock markets, in particular, Gulf Cooperation Council (GCC). It is evident that derivative markets play a crucial part in the global financial system. The use of hybrid securities as a tool to hedge risk in emerging stock markets has, however, not been closely examined. Hybrid securities can play a vital role in the future of emerging stock markets. It may be considered a key capital management tool. The paper attempts to apply the appropriate mechanism of hybrid securities in emerging stock markets. Credit derivatives have many uses and provide flexibility to transfer and price credit risk more efficiently. The expected defaults in the GCC markets are expected to continue growing at a high rate. Credit derivatives are likely to be used more extensively in those situations where buying or selling in cash markets is cumbersome and less efficient. [PUBLICATION ABSTRACT]
ISSN:1753-9641
1753-965X
DOI:10.1057/palgrave.jdhf.1850060