Capital flight arguments do not make sense to Carl Weinberg, chief economist at the consulting firm High Frequency Economics, based in New York, who cannot understand why foreign investors would flee China, given still-steady renminbi appreciation and risks elsewhere.
Table 6 Characteristics of the firms Particulars Frequency Mean/Percentage Std.
For instance, we can say with a high degree of confidence that a particular market order was placed by a high-frequency firm, but do not point to whether the high-frequency trader in question was, for example, employed by Getco or Virtu.
Their results suggest that firms with higher reporting frequency (e.g., firms reporting quarterly as opposed to annually) have lower information asymmetry and a lower cost of equity capital.
This robbed markets of a big slug of liquidity, almost certainly exacerbating the price falls.Another factor was the sudden retreat by the "high frequency" firms whose algorithmic trading has come to dominate equity markets.
Yet several details emerged about the firm's high-frequency trading business, including that the unit accounted for about $300 million in revenue last year, less than 1 percent of Goldman's total revenue of $45 billion.
Only 2.8% of its clients restated, compared with 5.6% for Deloitte & Touche.For all five firms covered, the frequency of restatements rose steadily between the first year of the study and the last.
Table 1 Business activities of the firms Business activity Frequency Percentage Automotive 19 8.6 Banking and finance 21 9.5 Computer and software 7 3.1 Construction 18 8.1 Drugs 9 4.1 Food 17 7.7 Logistics and transportation 11 5.0 Oil and petrochemicals 13 5.9 Retail 29 13.1 Telecommunications 3 1.4 Textile and apparels 34 15.4 Tourism 8 3.6 Other 32 14.5 Total 221 100.0.
Though the tax won't affect small investment firms, heavyweight firms that practice high frequency trading, such as Goldman Sachs, would be hit the hardest.
US businessmen claimed, for example, that after they rejected Gulnara's offer to take a share in their Skytel mobile phone firm, "the company's frequency has been jammed by an Uzbek government agency".
