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The Relevance of Short Sales to the Maltese Stock Market

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  • Azzopardi, Paul
  • Silvio John, Camilleri

Abstract

This paper outlines the main concepts behind short selling activities and explores their relevance to a smaller stock market in the context of Maltese securities. While short sales have desirable properties, especially with respect to pricing efficiency, formal and informal restrictions may hinder this function. Short sale activity may be particularly risky in the context of the Maltese market, due to its low liquidity level. Short sales on their own may not be sufficient to enhance liquidity levels on this market.

Suggested Citation

  • Azzopardi, Paul & Silvio John, Camilleri, 2003. "The Relevance of Short Sales to the Maltese Stock Market," MPRA Paper 84566, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:84566
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    File URL: https://mpra.ub.uni-muenchen.de/84566/1/MPRA_paper_84566.pdf
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    References listed on IDEAS

    as
    1. Bhattacharya, Anand K & Gallinger, George W, 1991. "Causality Tests of Short Sales on the New York Stock Exchange," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(3), pages 277-286, Fall.
    2. Kyriacos Kyriacou & Bryan Mase, 2000. "Rolling settlement and market liquidity," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 1029-1036.
    3. Diamond, Douglas W. & Verrecchia, Robert E., 1987. "Constraints on short-selling and asset price adjustment to private information," Journal of Financial Economics, Elsevier, vol. 18(2), pages 277-311, June.
    4. Figlewski, Stephen & Webb, Gwendolyn P, 1993. "Options, Short Sales, and Market Completeness," Journal of Finance, American Finance Association, vol. 48(2), pages 761-777, June.
    5. Barry, Christopher B. & Brown, Stephen J., 1984. "Differential information and the small firm effect," Journal of Financial Economics, Elsevier, vol. 13(2), pages 283-294, June.
    6. Alexander, Gordon J. & Peterson, Mark A., 1999. "Short Selling on the New York Stock Exchange and the Effects of the Uptick Rule," Journal of Financial Intermediation, Elsevier, vol. 8(1-2), pages 90-116, January.
    7. Said Elfakhani, 2000. "Short positions, size effect, and the liquidity hypothesis: implications for stock performance," Applied Financial Economics, Taylor & Francis Journals, vol. 10(1), pages 105-116.
    8. Figlewski, Stephen, 1981. "The Informational Effects of Restrictions on Short Sales: Some Empirical Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 16(4), pages 463-476, November.
    9. Anand K. Bhattacharya & George W. Gallinger, 1991. "Causality Tests Of Short Sales On The New York Stock Exchange," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(3), pages 277-286, September.
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    Cited by:

    1. Camilleri, Silvio John, 2005. "Can a Stock Index Be Less Efficient Than Underlying Shares? An Analysis Using Malta Stock Exchange Data," MPRA Paper 84574, University Library of Munich, Germany.

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    More about this item

    Keywords

    Short Sales; Malta; Securities Trading; Equity Markets;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G2 - Financial Economics - - Financial Institutions and Services
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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