The Determinants of Bank Capital Ratios in a Developing Economy

This paper reports new findings on the determinants of bank capital ratios. The results are from an unbalanced panel data set spanning eight years around the period of the 1997-1998 Asian financial crisis. Test results suggest a strong positive link between regulatory capital and bank management?s risk-taking behaviour. The risk-based capital standards of the regulators did not have an influence on how regulatory capital is adjusted by low-capitalized banks, perhaps due to the well-documented banking fragility during the test period. Finally, bank capital decisions seem not to be driven by bank profitability, which finding is inconsistent with developed country literature that has for long stressed the importance of banks? earnings as driving capital ratios. Although the study focuses only on one developing economy, these findings may help to identify the correlates of bank capital ratios in both developed and developing economies since this topic has received scant attention of researchers. These findings are somewhat consistent with how banks engaging in risky lending across the world could have brought on the 2007-2008 banking liquidity and capital erosion crisis.

The signalling value of public issue and offer for sale ratios on the performance of initial public offers / Lin Yong Tong and Rubi Ahmad

Investors of initial public offers (IPOs) rely on the prospectus for important information about the company. But the motivation of the issuers (original shareholders) for going public is unknown and hidden from the investing public, making the IPO investment a risky venture. Based on the Signalling Theory, we postulate that the public issues (PI) and offer for sale (OFS) ratios to contain properties to signal the intention of the issuers at time of listing. Our samples are collected from the Bursa Malaysia from 2002 to 2008 and the performances are tracked till 2011. The regression results are consistent with the Signalling Theory which stipulates that when issuers sell down their stakes, it sends a gloomy signal, even though the offer of OFS does not cause any dilution to company’s value. In addition, small companies with high OFS ratio record weaker long-run performance than large companies

Correlation between ratio of Nrf2/Keap1 and catalase gene expression in liver of hyperlipidemic rats after administration of 7-hydroxy-2-(4-hydroxy- 3-methoxyphenyl)-chromen-4-one

Hyperlipidemia results in excessive superoxide anion radicals that are the cause ofoxidative stress. Phytochemical compounds can reduce oxidative stress. The aim of thisstudy was to investigate the correlations between ratio of Nrf2/Keap1 and catalase geneexpression in livers of hyperlipidemic rats after administration of 7-hydroxy-2-(4-hydroxy-3-methoxyphenyl)-chromen-4-one. Twenty-four Rattus norvegicus rats, aged 8 weeks andweighing an average of 200 g were randomly divided into 6 groups i.e. Group 1 wasnormal group (N), Group 2 was hyperlipidemic rats (HL), Group 3 was hyperlipidemicrats with simvastatin (HL+SV), and Groups 4-6 were hyperlipidemic rats with 7-hydroxy-2-(4-hydroxy-3-methoxyphenyl)-chromen-4-one doses 10 mg (HL+10), 30 mg (HL+30) or 90 mg/200 g BW (HL+90), respectively, administered orally by gavages. At the end ofthe study, the rats were euthanized and the livers were used to analyze the ratio of Nrf2/Keap 1 and catalase gene expression. Nrf2/Keap1 ratio and catalase gene expressionbetween groups were analyzed by Kruskal Wallis test. Spearman’s correlation test wasused to analyze the correlations between Nrf2/Keap1 ratio and catalase gene expression.The administration of 3 different doses of 7-hydroxy-2-(4-hydroxy-3-methoxyphenyl)-chromen-4-one on hyperlipidemic rats increased catalase gene expression. There wasno correlation between ratio Nrf2/Keap1 and catalase gene expression. In conclusion,administration of 7-hydroxy-2-(4-hydroxy-3-methoxyphenyl)-chromen-4-one can improvecatalase gene expression in hyperlipidemic rats. However, there is no correlation betweenthe ratio of Nrf2/Keap1 gene expression and the catalase gene expression

Debt financing and importance of fixed assets and goodwill assets as collateral: dynamic panel evidence

This article analyses the effect of fixed assets and goodwill assets on South African firms’ debt ratios. The difference and system generalized method of moment estimation results reveal that fixed assets and goodwill assets have significant and positive relationship with firms’ debt ratios. To secure long-term debt, fixed assets and goodwill assets are required as collateral by creditors. Our results show firms’ adjust to long-run optimal debt level, but at a slow adjustment rate. Our results suggest there are costs preventing South African firms from adjusting faster to their long-run optimal debt level. The practical implication of the paper is that policy makers should promote policies that encourage further development of the capital market. Moreover, firms need both fixed assets and goodwill assets as collateral to raise the desired optimal debt that maximizes firm value

Dynamic Relationship between Debt and Cash flow in Pecking Order Theory: Evidence from Panel GMM

The paper investigates the relationship between cash flow and debt for South African firms. The difference generalized method of moment results show cash flow has significance and negative relationship with debt. Similarly, the system generalized method of moment results show negative relationship between cash with debt. The results affirmed pecking order theory of corporate financing and it reveals the incidence of asymmetric information problem between the firm and its financiers. Besides, the results imply a need to further develop South African capital market in order to reduce information asymmetry costs associated with raising external finance. Moreover, evidence of trade-off theory is also presented in the results which suggest that the dynamic nature of firms’ capital structure decision deserves attention. Keywords: Capital structure; debt ratio; cash flow; pecking order theory; panel GMM; South Africa

From pre-ceramic polymer to high-toughness ceramic: An SLA 3D printing approach

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A New Sentiment Index for the Islamic Stock Market

This study attempts to examine the predictability of Google search volume (GSV) and to construct an appropriate investor sentiment index for Islamic stock markets for seven United States (US) Islamic stock indices. Using principal component analysis, we construct an appropriate investor sentiment index for Islamic stock markets that depicts more persistent and higher R-squared values for all these seven US Islamic stocks indices compared to the original Financial and Economic Attitudes Revealed by Search (FEARS) sentiment index of Da, Engelberg, and Gao (2015). The observed results can be attributed to the construction of our investor sentiment index as we have included keywords active in the Islamic stock markets. The findings of this study provide strong predictability evidence for our new sentiment index in the Islamic stock markets

The ability of analysts’ recommendations to predict optimistic and pessimistic forecasts

Previous researches show that buy (growth) companies conduct income increasing earnings management in order to meet forecasts and generate positive forecast Errors (FEs). This behavior however, is not inherent in sell (non-growth) companies. Using the aforementioned background, this research hypothesizes that since sell companies are pressured to avoid income increasing earnings management, they are capable, and in fact more inclined, to pursue income decreasing Forecast Management (FM) with the purpose of generating positive FEs. Using a sample of 6553 firm-years of companies that are listed in the NYSE between the years 2005–2010, the study determines that sell companies conduct income decreasing FM to generate positive FEs. However, the frequency of positive FEs of sell companies does not exceed that of buy companies. Using the efficiency perspective, the study suggests that even though buy and sell companies have immense motivation in avoiding negative FEs, they exploit different but efficient strategies, respectively, in order to meet forecasts. Furthermore, the findings illuminated the complexities behind informative and opportunistic forecasts that falls under the efficiency versus opportunistic theories in literature