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CIFR Research Project 2014-2015

Centre for International Finance and Regulation

Informed vs. Noise Trading: Foreign and Domestic Retail and Institutional Liquidity Demanders and Providers

Assoc Prof Joakim Westerholm; Dr Joel Fabre; Dr Andrew Grant; Dr Hamish Malloch


Project Summary

Is the investment performance of individual household investors impacted by behavioural biases to the extent that they need to be protected by regulation? This project aims to provide scientific evidence to help regulators, stock exchange officials and service providers introduce effective measures for financial consumer/investor protection.

Our research aims to provide a clear picture of the demographics and preferences of Australian household investors and the role they play as counterparties to foreign and domestic institutional investors. We will introduce cutting edge techniques that recently have cast serious doubts over the previous literature, in which all individuals are simply categorised as uninformed and all institutions as informed. We will investigate the investment preferences and share trading behaviour of Australian household investors using highly detailed transaction records identified at the order level in combination with aggregated share holdings data from the share depository.

Further details are available on the CIFR site.