The Announcement Effects of Insider Trading

This paper examines the insider trading activity in Malaysia. It tries to examine the existence of the abnormal profit from this activity. While developed countries like United States and United Kingdom recently reported that the activity can no longer gives abnormal profit for long period due to laws imposed in those countries, attention now turns to emerging market like Malaysia. By using event study analysis, 200 cases of insider trading activity reported between January 2008 and March 2009 were closely examine and the result shows that while abnormal return do exist, it is mostly not significant. This paper also looks at the individuals and institutional insider and their performances respectively

Corporate governance and insider trading: evidence from Malaysia

The collapse of prominent companies coupled with the increasing number of lawsuits against the directors of the companies for wrongdoing has raised concerns with insider trading activities. Insider trading does cause significant market reaction, whereby the insiders are able to earn significant cumulative abnormal returns for both purchases and sales. However, studies on the factors influencing insider trading are relatively scarce. This study aims to examine the factors that influence insider trading activities. Specifically, this study examines the relationship between four corporate governance factors, namely, board independence, board size, executive compensation and ownership concentration and insider trading activities in public listed companies in Malaysia. This study evinces that board size and executive compensation significantly influence insider purchases. On the other hand, significant market reaction caused by insider sales may be explained by other factors. Therefore, future studies could be carried out on other factors that may influence opportunistic insider sales. This study also found evidence against the semistrong form Efficient Market Hypothesis theory that suggests insiders cannot earn abnormal returns in a semi-strong efficient market using public informatio

Herding behavior and the information effect of firm’s ownership

Available empirical evidences reveal that macroeconomic information influences investor’s herding decision, but very limited studies focus on the influence of firm’s ownership types on investor’s herding decision. This study challenges the importance of information dissemination at firm’s level on investor’s herding decision. By categorizing firms according to family and non-family ownership, this study investigates the existence of herding in 22 different countries. Applying the cross sectional absolute deviation (CSAD), we find existence of herding activity only in Greece, New Zealand and China. Our findings suggest that investors place less importance on firm’s information dissemination management

Investigation of industrial herding in Malaysia

This paper examines herding behavior in Malaysia using their industrial daily price data for the period of 2005-2018. The study report insignificant results when test for the whole period using the Cross Sectional Absolute Deviation (CSAD). However, the study document significant herding activity in the second test across the year particularly in the earlier years between 2005 and 2011. Similar test on the succeeding years however did not report for any herding activity except for 2015. Beside the heighten apprehension during crisis time, this could also due to the rapidly advancing technology enabling investors to obtain information and make decision heterogeneously. Meanwhile, study on herding across industrial in Malaysian market shows that only technological and property sectors give significant herding activity pointing to an improve efficient market in the countr

Empirical study of herding behavior impacts on South Asia Nation

This paper investigates the dynamic relationship between Sri Lanka and Pakistan’s stock markets and its interdependent with India and China given the later hefty involvement in the former economic activity. The study investigate the potential macro herding across the four countries and also try to examine the spillover effect especially from superior market towards its developing counterpart. The Cross Sectional Absolute Deviation (CSAD) is utilized to test for herding and it suggested that while herding exist in China, Sri Lanka and Pakistan pre-crisis period, only Pakistan have herding after the subprime crisis. Testing industrial herding across the countries revealed that investors do not emphasize sectoral influence over herding decision. However, as we consider the spillover effects between countries and test for herding in selected industry with higher percentage of trade among them, it reveals herding existence in several diferent industry pre and post crisis. The findings confirms the existence of herding in individuals market except for India and also across market in selected industry due to spillover effects

Examining herding in the BSE100 pre and during pandemic era: does governance matter?

This study investigates herding towards market consensus in the Indian market by examining the stocks that constituted the Bombay Stock Exchange 100 (BSE100) pre and during pandemic situations using the Cross Section Absolute Deviations of Return (CSAD). We document a stronger herding activity during the pandemic against the period before the COVID-19 discovery. We also examine if governance scores influence herding decisions on the firms and reported no herding activity in the period before the pandemic. The findings on firms with lower governance scores indicate less severe herding activity during the pandemic time. Herding is more perilous among firms with higher governance scores during pandemic time suggesting rational herding practice with investors imitating the market movement only on selected firms with lesser governance risk but refuse to follow the sentiment on a perceived riskier investmen

Herding and financial decision: proposing an Islamic model of tabayyun

This paper proposes an Islamic model of Tabayyun to deal with information especially with regard to financial decisions. It enhances the literature by adding the jurisdictions and perspective of Islamic laws on herding behavior. Relying on the primary sources of the Shariah which are related Quranic verses, hadith, as well as Islamic legal maxims (Qawaid Fiqhiyyah) to explain the proposed model of Tabayyun (decision-making process). The paper proposes a Tabayyun Model which is based on the Quranic verses and Hadith, as well as Islamic legal maxims as guidelines for the decision making process. Overall, it is imperative to discuss herding behaviour from the Islamic perspective as Muslim nowadays are more relying on worldly sources rather than return to the ultimate sources of Islam to make any judgment and decisio

Determinants of herding behaviour on financial decisions: a theory of planned behaviour

This study analyses factors that influence herding behaviour among university lecturers in Malaysia. The quantitative approach is adopted through questionnaires and the theory of Planned Behaviour is chosen to identify the significant factors that influence individuals’ herding behaviour in making a financial decision with the sample of 125 university lecturers. The data were analysed using multiple regression analysis. Overall, attitude and behavioural control are found to have a significant influence towards individuals’ herding behaviour. The findings from this study indicate the unfavourable attitude towards herding behaviour among lecturers which lessens the possibility of engagement of individuals in financially related herding activities. Hence, behavioural control is found significantly influence the individuals’ herding behaviour. The findings elucidate the positive impact of behavioural control towards any individual’s financial decision including herding. It indicates that financial institutions that have strong marketing approaches and skills may influence individuals’ financial decision-making

Mata wang BRICS bukti dunia sedia terima pembaharuan.

Sorotan lensa ekonomi dunia minggu lalu dihangatkan penegasan Presiden Russia, Vladimir Putin bahawa kesatuan BRICS komited terhadap pelan kesatuan untuk mengeluarkan mata wang sendiri yang harganya bakal didukung emas, sekali gus menghentikan dominasi dan kebergantungan kepada dolar Amerika Syarikat (AS). Ketika berucap pada Sidang Kemuncak BRICS Ke-15 di Johannesburg, Putin optimis langkah penggantian mata wang asing (de-dollarization) diusahakan BRICS ialah inisiatif bersifat proaktif sejajar gesaan mewujudkan paradigma baharu untuk kelestarian kewangan global masa depan. Kenyataan beliau senada dengan luahan rakan sejawatnya dari Brazil, Presiden Luiz Inacio Lula da Silva berterusan mempersoalkan kewajaran dunia merelakan ketidaktentuan pasaran ekonomi dunia yang ketika ini dipacu pergerakan dolar. Hakikatnya, gesaan dan dorongan merejuvenasi sistem mata wang antarabangsa bukanlah baharu. Ia pernah berkali-kali digagaskan beberapa negara, terutama yang terbabit dalam konfrontasi dengan AS atau Kesatuan Eropah (EU)

The effect on stock price inclusion or exclusion from the FTSE4good Bursa Malaysia

The fight for sustainability in finance is a conundrum that divides opinions among market participants. Given its potential hefty increase in the cost of operation, there is a perception that a sustainable investment could slow down financial returns. This leads one to wonder how market participants will respond to sustainable-related announcements. To address the issue, this study investigated the sensitivity of investors towards the Environmental, Social, and Governance (ESG) movement in Malaysia by examining the announcement effect of inclusion or exclusion of a firm from the FTSE4Good Bursa Malaysia Index by employing an event study analysis. Our findings indicated that investors are sensitive to both announcements, but stock price adjusts faster towards deletion announcements compared to inclusion announcements from the index. This study enriches the literature on semi-strong market efficiency although slight evidence suggests possible overreaction and momentum trading. The study also showed that Malaysian investors are sensitive to ESG announcements, as the inclusion (exclusion) of stock is met with positive (negative) effects on returns