Determinants of indirect financial distress costs: evidence from Malaysia / Norhisam Bulot

The aim of this research is to contribute to the finance theory by providing a quantitative estimate on the size of indirect financial distress costs and its determinants. This thesis is novel and original given the fact that not many studies have been done in the area of indirect financial distress costs and very few similar studies have been done specifically on Malaysia. This study is enriched by providing data analysis using both static and dynamic models of panel data instead of either one as found in many previous studies. In this study, firm level yearly data from the year 2001 to 2011, which includes all firms listed as affected issuers under the requirement of Practice Note 4, Practice Note 17 and Amended Practice Note 17 were used. 199 firms with 955 firm-years observations were examined. Financial distress costs were measured in terms of opportunity costs (OC), changes in operating performance (IAES and IAEA), and changes in capital values (CDS and CDA). Findings from this research suggest that the average FDC found to be 10.53% to 24.62% for OC, -21.44% to -44.29% for IAES, -14.46% to -10.86% for IAEA, -1.45% to 4.63% for CDS and 0.27% to 0.78% for CDA. It is also apparent that the size of FDC varies considerably among sectors and the choice of proxy for indirect financial distress costs. The findings also provide evidence on the existence of both costs and benefits of financial distress. The results of the regressions suggest that lagged dependent variables, investment opportunities, intangible assets, liquid assets and firm size found to have a significant influence on the size of FDC, whereas, there is no statistically significant relationship between time in distress and FDC. Depending on the proxy of indirect costs financial distress, firm size, investment opportunities, lagged dependent variables and intangible assets seem to be the most important variables explaining the FDC. As for leverage, change in investment policy, tangible assets, and expected earnings growth, this research does not provide enough evidence on their significance and concludes that these variables cannot be considered as proper explanatory variables of FDC. The knowledge on the size of indirect financial distress costs and its determinants has important implications for the research on capital structure and bankruptcy prediction among others. First, the finding suggests that OC, CDS and CDA are the best proxies for FDC as they provide the support for the existence of indirect financial distress costs. The use of the other two proxies (IAES and IAEA) will lead to bias as they did not provide the evidence for the existence of financial distress costs. This conclusion is especially important for studies that use indirect financial distress costs as one of their predictors. Therefore, future researchers should exercise care in selecting the proxy for the indirect financial distress costs. Second, it is important to note there is no conclusive evidence on the most optimal number and combination of predictors. The choice of proxy will lead to different conclusion on the types and number of predictors to be included in the model. Therefore, empirical findings for this thesis cannot be generalized to another sample. Third, the finding of this research suggested that the indirect financial distress costs increase and becomes apparent as the firm near financial distress. The information can be used as an early warning indicator that will allow policymakers and regulators (such as Bursa Malaysia) to act and take preventive action in ensuring the quality of listed companies in Malaysia

Dividend behaviour of public listed firm in Malaysia

The Malaysian financial market is governed and regulated by the Bursa Malaysia Berhad, an indicator of Malaysian financial market. Dividend policy in Malaysian companies is often inflexible as most of the firms are unwilling to cut or keep away from omitting dividend even when the company's earnings are falling. This research examined whether there are any correlation between earnings, firm's size and liquidity against dividend. This research used data from companies from seven different selected sectors covering over period of six years from 2007 to 2012. From the results obtained, this research confirms that profitability, sizes and liquidity are the important determinants of dividend payment in Malaysia and the influence of industry on payout decision. The companies studied appear to be reluctant to omit dividend even when they suffers loss

PIM-based Digital Controller for System with Process Delay

Discretization of a controller in a process plant is a norm through a variety of means. A typical approach of industry involves converting an analog time controller to discrete time controller using PID adjustment method. Delayed system however, suffers degradation in its transient performance at certain level and form including but not limited to; higher overshoot and slower settling time. As such, process’ tuning is always mandatory as a means of compensation. Plant Input Mapping (PIM) based method aims to reduce the performance’s degradation with minimal tuning involved. In this project, an epsilon operator is used and preferred compared to z operator. Both the plant and the controller will be discretized using Step Invariant Model (SIM) and Matched Pole Zero (MPZ) technique respectively. Experiment has been done to compare the performance of discrete PID and PIM method. First order dead time (FODT) transfer function of the plant is calculated using statistical modelling method and thus, the values for continuous time (CT) PID is calculated using the open loop tuning method. Simulation of all process are generated through Simulink’s model. It is observed that the performance of PIM could rival the DT PID’s however, there is some limitation in PIM technique that makes the technique undesirable. Further modification of technique is done and proven to be significantly better than DT PID and closely simulates its continuous system counterpart

Optimization of Pole Numbers and Rotor Size for a Single Phase Slot-Less Permanent Magnet Generator.

This paper discussed on the optimization of a permanent magnet generator (PMG). Generally, the PMG is a slot-less type topology, operated in a single-phase, and it was developed to energize the linear motor in pruner application. Due to this application, a compact generator that can produce up to 100W output power is required since the overall size of the PMG is important. Permeance Analysis Method (PAM) is used to analyzed the PMG performance characteristic. Finite Element Method (FEM) and measurement of the PMG prototype were used to verify the PAM result. Various numbers of poles and rotor size were considered during this analysis. The results show that the slot-less PMG with stator size of 104 mm will produce maximum power of 110 W when it has 6-poles with rotor radius is 37 mm. Based on the results, the calculation method using PAM shows good agreement with measurement and FEM simulation

DDPWM-based power conversion system using three to four phase matrix converter for stand-alone power system

This paper presents a novel stand-alone power system using a three to four phase matrix converter (MC) for use with renewable energy sources such as a micro hydro turbine or a tiny wind turbine with a permanent magnet synchronous generator (PMSG). MCs are able to convert AC power to AC power directly without using DC link capacitors, and AC to DC conversion is also possible because DC is considered to be a type of AC power. Here, two single phase AC outputs with constant frequency and two DC outputs for a battery storage system are described for a fluctuating voltage source. Direct duty ratio pulse width modulation (DDPWM) is used to achieve the desired output because it is easy to expand an ordinary three to three phase MC to produce a three to four phase MC. In addition, fictitious reference iterative tuning (FRIT) is used to design the controller gains. The validity of the proposed method is demonstrated using MATLAB/Simulink simulations

Linear oscillatory actuator integrated with magnetic gear for E-cutter development

This paper proposes a linear oscillatory actuator integrated with a magnetic gear for E-cutter development to harvest oil palm fresh fruit bunch (FFB). The machine comprises of a linear magnetic gear which is artfully integrated with a slotless linear motor. The idea is proposed to improve the performance of existing linear actuators. The design is targeted for a optimum motor thrust, light weight, low cycle time, and reliable displacement. Most importantly, the direction of motion for both the linear motor and linear magnetic gear is opposite to each other, and this could reduce the vibration disturbance from the machine. The performance of the proposed machine is analyzed by finite element method (FEM) and the simulation results verify the machine design

Effect of Inductive Coil Shape on Sensing Performance of Linear Displacement Sensor Using Thin Inductive Coil and Pattern Guide

This paper discusses the effect of inductive coil shape on the sensing performance of a linear displacement sensor. The linear displacement sensor consists of a thin type inductive coil with a thin pattern guide, thus being suitable for tiny space applications. The position can be detected by measuring the inductance of the inductive coil. At each position due to the change in inductive coil area facing the pattern guide the value of inductance is different. Therefore, the objective of this research is to study various inductive coil pattern shapes and to propose the pattern that can achieve good sensing performance. Various shapes of meander, triangular type meander, square and circle shape with different turn number of inductive coils are examined in this study. The inductance is measured with the sensor sensitivity and linearity as a performance evaluation parameter of the sensor. In conclusion, each inductive coil shape has its own advantages and disadvantages. For instance, the circle shape inductive coil produces high sensitivity with a low linearity response. Meanwhile, the square shape inductive coil has a medium sensitivity with higher linearity

Investigations On A Novel Inductive Concept Frequency Technique For The Grading Of Oil Palm Fresh Fruit Bunches.

From the Malaysian harvester’s perspective, the determination of the ripeness of the oil palm (FFB) is a critical factor to maximize palm oil production. A preliminary study of a novel oil palm fruit sensor to detect the maturity of oil palm fruit bunches is presented. To optimize the functionality of the sensor, the frequency characteristics of air coils of various diameters are investigated to determine their inductance and resonant characteristics. Sixteen samples from two categories, namely ripe oil palm fruitlets and unripe oil palm fruitlets, are tested from 100 Hz up to 100 MHz frequency. The results showed the inductance and resonant characteristics of the air coil sensors display significant changes among the samples of each category. The investigations on the frequency characteristics of the sensor air coils are studied to observe the effect of variations in the coil diameter. The effect of coil diameter yields a significant 0.02643 MHz difference between unripe samples to air and 0.01084 MHz for ripe samples to air. The designed sensor exhibits significant potential in determining the maturity of oil palm fruits

Double side interior permanent magnet linear synchronous motor and drive system

Linear motor has been applied in various fields such as factory and office automation. A linear motor differs from a rotational motor, in which it has a simpler structure. Linear Synchronous Motor is one of the types of linear motor and its application is very wide which is from the small application (i.e. industrials automation) to large application (i.e. maglev transportation) [1]. The thrust which is generated by linear motor is high, even with the size of the motor is small [2]. This is the feature of the linear motor compared to rotational motor where a gear is needed to change the rotational movement to the linear movement. Therefore the linear motor can reduce the mechanical losses. This paper discuss on the proposal of Double Side Interior Permanent Magnet of Linear Synchronous Motor (DIPM-LSM). The structure and three dimensions of magnetic circuit of DIPM-LSM are discussed. This type of DIPM-LSM can be driven by sinusoidal and pulse voltage input. The three phase two coils excitation-driving mode of open loop drive systems are also been discussed