Does price react to fixed price tender offer share buyback announcement?

This paper investigates stock market reactions to share buyback announcements, specifically with the fixed price tender offer mechanism. An event study methodology was used to examine stock price reaction of 30 observations involving 21 listed companies surrounding the announcement dates. Two models, namely market adjusted return (MAR) and the single index market models (SIMM) were utilised to compute abnormal returns.Eventhough most literature in the western market found positive abnormal returns, this study reveals that investors gain zero abnormal returns out of these announcements. The post announcement result shows a zero abnormal return which implies that the Malaysian stock market is semi-strongly efficient due to this announcement. Finally, evidence also shows that none of the implications forwarded in the theories could be supported in this study

Does Price React to Fixed Price Tender Offer Share Buyback Announcement?

This paper investigates stock market reactions to share buyback announcements, specifically with the fixed price tender offer mechanism. An event study methodology was used to examine stock price reaction of 30 observations involving 21 listed companies surrounding the announcement dates. Two models, namely market adjusted return (MAR) and the single index market models (SIMM) were utilised to compute abnormal returns. Eventhough most literature in the western market found positive abnormal returns, this study reveals that investors gain zero abnormal returns out of these announcements. The post announcement result shows a zero abnormal return which implies that the Malaysian stock market is semi-strongly efficient due to this announcement. Finally, evidence also shows that none of the implications forwarded in the theories could be supported in this study.

The relationship between ownership structure, firm specific characteristics and capital structure: evidence from Malaysian middle-capital public listed firms

This study investigates the relationship between ownership structure and firm specific characteristics with capital structure of Malaysian middle-capital pubic listed firms. Although there are many studies conducted on capital structure, very few examine the connection between ownership concentration and ownership dispersion with capital structure particularly in the Malaysian market. By employing a total of 38 middle-capital firms covering period from 2008 to 2012, the results show that debt level in firms with high ownership concentration is significantly different from firms with low concentration level. It is also found that ownership concentration possess a negative relationship with leverage ratio, the measurement for capital structure. This suggests that debt is less likely to be used as monitoring mechanism in highly concentrated firm. This practice could reduce debt related financial distress cost, which in turn lower agency cost although it promotes agency cost related to managerial opportunistic behavior. The findings might help investors to understand more about capital structure and help them to judge corporate governance practice of firms based on the level of ownership concentration and choice of capital structure

Factors influencing young adults’ debt in Malaysia

This study explores factors affecting debt level among young adults in Malaysia. Previous studies have linked material values, money management skills, and economic factors to credit card debt and student debt, but this study extends the previous research by investigating various forms of consumers’ debt in an emerging market where vulnerable youths are frequently bombarded with materialistic media messages that trigger their spending behaviour. In particular, variables such as pursuits of materialistic attitudes, money management attributes, and income level are examined in this study to see whether they are predictors of youth debt in Malaysia. A self-administered survey on 629 respondents centered around northern part of Malaysia was conducted based on convenience and judgmental sampling techniques. The findings suggest that money management skills and income level significantly influence the debt level of Malaysian young adults. Interestingly, materialism variable is insignificant, implying that young Malaysians represented in this sample do not possess materialistic attitude that lead to indebtness. The findings provide insights to the policy maker and the government to inculcate awareness of basic money management skills to ensure that the younger generation does not fall into the state of excessive debt which could lead to financial insolvency

Cyclical industries’ stock performance reaction during COVID-19: A systematic literature review

This study explores the impact of COVID-19 on stock market reactions of cyclical and non-cyclical industries during the pandemic. This paper aims to provide a systematic literature review (SLR) of studies done on the effect of COVID-19 on stock price. The PRISMA Statement (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) guided this study through an SLR within the month of October 2020. Under the PRISMA, the study was scrutinized through three processes: 1) defining clear research questions that permit systematic research, 2) identifying the inclusion and exclusion criteria, and 3) examining large databases of scientific literature in a defined time. A total of 18 out of 56 papers were identified and analysed to give better understanding of the pandemic’s effect on industry companies and the methodologies adopted in past studies. This paper analyses the major theme, namely cyclical industries impacted by COVID-19. The industries experiencing such value destructions include tourism, airlines, restaurants and transportation. The findings of this review are expected to have implications on investors, academicians and the public at large, particularly with regards to how unprecedented events such as COVID-19 can inflict economic damage

Does investors react in long-term? The case of Malaysian acquisition

This study examines long-run stock performance for acquirers from years 2000 to 2013. Since acquisitions create agency problem and companies in Malaysia exhibit concentrated ownership structures, this study aims to investigate four major objectives which consist of the effects of family control, blockholder activism, board structures and deal characteristics on stock performance of acquirers. In addressing these objectives, the abnormal returns over 36 months are adopted as the proxy for the long-run stock performance, respectively. Moreover, ordinary least squares regression methods are used to examine the effects of the 16 factors on abnormal returns. The results show that Malaysian market can be considered as efficient, as most of the analyses show that the performance of acquirers does not differ from those of the matching firms. The findings imply that managers of family-controlled firms do not have to worry about investors penalizing them, as long as they engage in value-creating acquisitions. Moreover, institutional blockholders should play an active role if they want to protect their investments. Finally, investors have to realize that over the long run, there is no trading strategy that could be adopted to earn abnormal profit

Long run stock performance of Malaysian acquirers

Mergers and acquisitions (M&A) is one of the largest forms of corporate investment (Masulis, Wang & Xei, 2007). Acquisitions, especially the large ones, have long term consequences on the well-being of shareholder and other stakeholders as they are risky in nature. Existing studies provide substantial evidence on poor performance following completion of merger deals (see for example Aggrawal and Jaffe, 2000 for an extensive literature review). Most of the evidence on mergers in the context of developed countries document that for long-run stock performance, the average abnormal returns for bidding firms are at best zero return (Martynova & Renneboog, 2008). This result shows that M&As do not add value to the bidding firms. In this study, we focus on Malaysia, a developing economy where many firms are controlled by families. The sample is composed of acquisitions during the period 2000-2013. We find that on average acquiring firms neither create nor destroy long term values after controlling for the performance of a control group. This result shows that investors reacted rationally in valuing the bidding firms after the announcements of the completions of the acquisitions. Thus, at least in the long run performance of acquisitions, the capital market in Malaysia is informationally efficient

Graduate qualities and selection criteria in Malaysian financial institutions

The issue of unemployed graduates in Malaysia has triggered a widely concern not only to the government but also to the higher education institutions and employers.In response to this issue, this research attempts to investigate what are the criteria that financial institutions in Malaysia actually seek from graduates to fill job vacancies in their organisation, and what are the shortcomings that they usually find in local university graduates particularly Universiti Utara Malaysia (UUM) graduates.A total of 167 questionnaires have been sent to the human resource manager of each financial institution.The results show that the foremost criterion that financial institutions seek from graduates is pleasant appearance, followed by good CGPA and lastly relevant experience.This research also attempts to identify major skills needed from graduate to be the respondents’ employee.The findings highlight that good communication skills in English, interpersonal skills, teamwork skills, critical thinking skills, and English writing skills are indeed the essential skills needed from graduates.This research finding also discovered that the main weaknesses of UUM graduates are poor in English communication skills and English writing skills

Determinants of capital structure: evidence from Malaysian firms

The paper examines the impact of oil and gas price shocks on bank performance in the major oil and gas exporting GCC countries, using data for the period 2000-2017. Results indicate that oil and gas price rises have a direct bearing on bank performance through the channel of priceinduced bank deposits and related lending to business activities. The negative impact on bank performance due to a drop in oil and gas prices is greater than the positive effect of a rise in prices. Findings suggest that oil and gas price volatility has an asymmetric effect on conventional and Islamic banks. Conventional banks reap more benefit from the increased cash flow created by oil and gas prices, compared to Islamic banks. While Islamic banks are generally vulnerable to adverse oil and gas price shocks, conventional banks tend to benefit more from positive oil and gas price shocks. The association between oil and gas price shocks and bank performance in GCC has been distorted by the global financial crisis, the Arab Spring, and the ongoing Yemen War, which have lowered performance. The findings of the study have significant policy implications for the central banks as well as the governments in the oil and gas-exporting countries

Market Reaction on Fixed Price Tender Offer Shares Buyback Announcement : An Analysis of the MAR and SIMM Approach

This dissertation attempts to investigate stock market reactions on shares buyback announcement, specifically with fixed price tender offer mechanism. A standard event study methodology is used to examine price reaction of 30 observations, involving 21 listed companies from 60 days surrounding the announcement dates. Two approaches in this study namely MAR and SIMM are adopted and compared in the analysis. Even though most literatures in the western market found positive abnormal returns from this announcement, this study, however, reveal that investors gain zero abnormal returns out of this announcement. Result of post-announcement shows that Malaysian stock market is semi-strongly efficient. In addition, evidence shows that none of the theories implication forwarded in this study could be supported by the result