Markowitz portfolio theory and capital asset pricing model for Kuala Lumpur stock exchange: a case revisited

Capital Asset Pricing Model is widely used by investors to estimate the return or the moving behavior of the stock and Markowitz Model is employed to achieve portfolio diversification. This study examine whether CAPM is valid to forecast the behaviour of the each individual stock and its return as well as its validity in the portfolio with stocks listed in Malaysia. Second, it evaluates the suitability of Markowitz Model to evaluate the performance of the Malaysia investment portfolio. This is done within the framework of 2010 to 2014 using weekly data of 60 companies. OLS unbiased estimator, autocorrelation and heterodasticity problems are to be conducted to test the validity of the model. It is concluded that CAPM is reasonable to be the indicator of stock prices in Malaysia as well as in portfolio basket. It proves that there is linearity in CAPM but unique risk and systematic do not need to be captured. Managers can use CAPM as a proxy to estimate their stock return and diversify the portfolio to reduce the unsystematic risk to enable them to execute the right policy in their management in order to maximise profit at the same time increase shareholder wealth maximisation. Furthermore, it is suggested to apply Markowitz portfolio diversification to reduce the unsystematic risk. Overall, portfolio diversification could build up the investors’ confidence towards the investment decision and to develop a sound investment financial market in assisting Malaysia to achieve its mission to be a developed country in 2020

The Future of Malaysia Trade in One Belt One Road

The One Belt and One Road Initiative (OBOR) will open up more trade opportunities for Malaysia due to the two trade routes, namely, the land-based Silk Road Economic Belt and the seagoing 21st Century Maritime Silk Road. This paper empirically examines the short-term and long-term relationship between Malaysias trade balance, real exchange rates (RER), industry production index (IPI), Malaysias consumer price index (MCPI) and Chinas consumer price index (CCPI) for the period January 2000 to September 2017. The Malaysias trade balance is regarded as an explained variable while the MYR-RMB, IPI, MCPI and CCPI will be regarded as explanatory variables. The Autoregressive Distributed Lag (ARDL) cointegration test is employed to estimate the long-run relationship between China and Malaysia. Then the Error-Correction model and the error correction term would explain the speed of adjustment in restoring equilibrium in the dynamic model referred to in this paper. The finding shows that the exports in Malaysia would benefit from the real appreciation of MYR and Chinas inflation. The OBOR will open up more opportunities for Malaysia to generate trade mainly because it involves the belt and the maritime but diplomatic relationship and export constructive policy also important to improve Malaysia trade balance with Chin

Influence of macroeconomics factors and legal stability to the insurance growth in the ASEAN-5 countries

This paper examines the influence of legal stability and macroeconomics factor to the non-life insurance development. In light of the growing significance of foreign direct investment (FDI) and trade that stimulate insurance sector, and the stress placed on legal stability of the countries, investigating the role of legal stability is crucial to sustain a country’s financial development. This study employs a panel data analysis spanning 20 years in the selected developing countries. The findings suggest that higher trade, higher income, higher stock market trading activities and higher availability of finance credit will enhance the non-life insurance development. Legal stability such as enhancement on the property right and government integrity will improve the non-life insurance development. When the legal environments in emerging countries are more stable, the FDI and stocks market will become more encouraging and stimulate non-life insurance development. The policy makers should improve the legal stability in emerging countries to improve the financial development for minimizing the gap with developed countries. This study includes the institutional factors components in addition to the macroeconomics factors could provide a complete picture towards the improvement of non-life insurance development in emerging and transition countries

Markowitz Portfolio Theory and Capital Asset Pricing Model for Kuala Lumpur Stock Exchange: A Case Revisited

Capital Asset Pricing Model is widely used by investors to estimate the return or the moving behavior of the stock and Markowitz Model is employed to achieve portfolio diversification. This study examine whether CAPM is valid to forecast the behaviour of the each individual stock and its return as well as its validity in the portfolio with stocks listed in Malaysia. Second, it evaluates the suitability of Markowitz Model to evaluate the performance of the Malaysia investment portfolio. This is done within the framework of 2010 to 2014 using weekly data of 60 companies. OLS unbiased estimator, autocorrelation and heterodasticity problems are to be conducted to test the validity of the model. It is concluded that CAPM is reasonable to be the indicator of stock prices in Malaysia as well as in portfolio basket. It proves that there is linearity in CAPM but unique risk and systematic do not need to be captured. Managers can use CAPM as a proxy to estimate their stock return and diversify the portfolio to reduce the unsystematic risk to enable them to execute the right policy in their management in order to maximise profit at the same time increase shareholder wealth maximisation. Furthermore, it is suggested to apply Markowitz portfolio diversification to reduce the unsystematic risk. Overall, portfolio diversification could build up the investors' confidence towards the investment decision and to develop a sound investment financial market in assisting Malaysia to achieve its mission to be a developed country in 2020. Keywords: Capital Asset Pricing Model, Risk and Return, Markowitz Portfolio Diversification JEL Classifications: G11, G1

A Case Study on Ranhill Water Services and Syarikat Air Negeri Sembilan in Combating the Non-Revenue Water Problem in Johor and Negeri Sembilan

Up to date, Non-Revenue Water (NRW) is still a problem in many states. This study is focused on the states of Negeri Sembilan and Johor. A team of Malaysian lecturers from Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman (UTAR), under the Malaysian governmental grant (TRGS 2016-1) are researching how to combat the NRW problem in the states of Negeri Sembilan and Johor. Data were collected through field research and focus group interviews from both Ranhill Water Services Sdn Bhd (Ranhill) and Syarikat Air Negeri Sembilan Sdn Bhd (SAINS). This study also looked into the laws and several legal cases involving non-revenue in Malaysia. Our research questions are what is non-revenue water, what are the institutions governing non-revenue water in Malaysia, what are the legislations and cases of non-revenue water in Malaysia and how do we overcome non-revenue water in Malaysia based on findings from Johor and Negeri Sembilan. From the research have found that the main contributors to NRW in Johor are a leakage in their pipe system and also reservoir overflow. They are now utilizing loggers to detect leakage. It was highlighted that amongst the challenges to combat NRW are the acknowledgement and awareness on the client-side and educating the client on the true situation of the pipe conditions and how to manage the NRW problem. As for SAINS, awareness is the same issue faced by SAINS just like Ranhill in which 80.0% are still more focused towards water supply rather than NRW

Influence of macroeconomics factors and legal stability to the insurance growth in the ASEAN-5 countries

This paper examines the influence of legal stability and macroeconomics factor to the non-life insurance development. In light of the growing significance of foreign direct investment (FDI) and trade that stimulate insurance sector, and the stress placed on legal stability of the countries, investigating the role of legal stability is crucial to sustain a country’s financial development. This study employs a panel data analysis spanning 20 years in the selected developing countries. The findings suggest that higher trade, higher income, higher stock market trading activities and higher availability of finance credit will enhance the non-life insurance development. Legal stability such as enhancement on the property right and government integrity will improve the non-life insurance development. When the legal environments in emerging countries are more stable, the FDI and stocks market will become more encouraging and stimulate non-life insurance development. The policy makers should improve the legal stability in emerging countries to improve the financial development for minimizing the gap with developed countries. This study includes the institutional factors components in addition to the macroeconomics factors could provide a complete picture towards the improvement of non-life insurance development in emerging and transition countries

Influence of macroeconomics factors and legal stability to the insurance growth in the ASEAN-5 countries

This paper examines the influence of legal stability and macroeconomics factor to the non-life insurance development. In light of the growing significance of foreign direct investment (FDI) and trade that stimulate insurance sector, and the stress placed on legal stability of the countries, investigating the role of legal stability is crucial to sustain a country’s financial development. This study employs a panel data analysis spanning 20 years in the selected developing countries. The findings suggest that higher trade, higher income, higher stock market trading activities and higher availability of finance credit will enhance the non-life insurance development. Legal stability such as enhancement on the property right and government integrity will improve the non-life insurance development. When the legal environments in emerging countries are more stable, the FDI and stocks market will become more encouraging and stimulate non-life insurance development. The policy makers should improve the legal stability in emerging countries to improve the financial development for minimizing the gap with developed countries. This study includes the institutional factors components in addition to the macroeconomics factors could provide a complete picture towards the improvement of non-life insurance development in emerging and transition countries

Does difference in secondary and tertiary literacy influence life insurance consumption in the selected ASEAN countries?

Life insurance as financial tool has played essential roles to both individual and economy with the functions of promoting long term saving, reinvestment of funds, risk management, development of capital markets support on economic growth.The determinants of life insurance consumption in the perspective of economics and demographic are to be examined in the ASEAN context.The study on the difference of secondary and tertiary education towards demand for life insurance is investigated to highlight the importance of introducing insurance knowledge in the education syllabus to improve future economics with better income and social return with the support of life insurance in the market.This will ensure a well risk management among individuals, firms and countries as a whole and it align with the AEC blueprint with the purpose to rise up the living of the community

Bequest motives among older Malays in Selangor

A bequest motive seeks to provide an economic justification for the phenomenon of intergenerational transfers of wealth. In other words, it is to explain why people leave wealth behind when they die. The objective of this study is to identify what motivates the bequest transfers among older Malays in Selangor – the largest ethnic group in Malaysia for which a bequest is culturally and religiously constructed within the society. This primary data were collected through face-to-face interviews using a structured questionnaire in the second quarter of 2011 with a total sample size of 280 older Malays aged 50 years or above in the state of Selangor. From the findings, it was discovered that older Malays in Selangor, conformed more to the altruism model than other bequest models

Navigating new product development: Uncovering factors and overcoming challenges for success

New product development (NPD) frequently encounters failures, whether during the development phase or in the subsequent commercialization stage. These failures can often be attributed to root causes originating in the early stages of NPD, known as the front end. This study aims to investigate the factors that contribute to NPD success and the challenges faced by firms throughout the development process. To achieve this objective, an in-depth qualitative approach utilizing interviews was employed to explore the internal and external factors influencing NPD success. Additionally, the study aims to identify specific challenges encountered by firms during the NPD process. The identification of these factors and challenges are crucial for companies as it can lead to long-term cost savings.The findings of this study have broad implications for firms regardless of their product plans. By adopting the derived approach, companies can effectively navigate the product development process and gain insights into the potential challenges associated with introducing a new product into an existing market. As customer preferences evolve with technological advancements, the barriers and challenges faced by new products entering established markets also increase. Therefore, firms that incorporate the results of this study into their product development practices across various industries can avoid pitfalls and achieve greater efficiency in terms of time and costs. This research sheds light on critical areas that contribute to successful product development and provides valuable guidance for firms striving to excel in their NPD endeavors