Bond Market Manipulation: Evidence from the Iranian Bond Funds

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Khademsohi, Mohammad Ali | 2022

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 56274 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Ebrahimnejad, Ali
Abstract:
Fixed-income funds' success in attracting money to the market is a significant contributing factor to the expansion of the Iranian bond market. Bonds, on average, constitute more than 40 percent of fixed-income funds' portfolios. These funds guarantee a monthly minimum profit of between 1.5-2 percent. On the other hand, stocks, on average, constitute more than 10 percent of fixed-income funds' portfolios. Because of extreme fluctuations in recent years in the stock market, there was significant volatility in those portfolios. The fluctuations in portfolios and guaranteed minimum profit make us think that funds may manipulate other assets, specifically the bonds, to smooth monthly returns. In this research, we show some strong evidence that accepts this hypothesis. Also, there is evidence that the manipulated return, caused by bond manipulation determines the investor decisions, compared to nominal return, which reports
Keywords:
Fixed Income ; Stock Market ; Price Manipulation ; Secrities ; Stock Market Fluctuation ; Bond Market ; Listed Companies

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