Azwadi Ali

Gold and Islamic stocks: A hedge and safe haven comparison in time frequency domain for BRICS markets

ABSTRACT:This paper investigates the role of safe haven assets i.e. gold and Islamic stocks in time-frequency domain for two different crises periods. Wavelet coherency squared coherence approach has been utilized on daily data of gold, DJIEM and stock returns of the BRICS markets for the period from January 1st 1996 to December 31st 2014. The results indicate that gold maintain its role as hedge for stock markets over short-run. In both crises periods, gold exhibits low correlation with stock markets. Over all, our results suggest that the hedge and safe haven ability of gold is market specific. Therefore, in Asian financial crises, gold proves as a strong safe haven for BRICS and Islamic index. However, in late 2005, gold prices start moving with BRICS equitey markets and show positive correlation for 32-128 days scale. This relationship effects gold’s ability to act as a financial protector against extreme negative shocks in global financial crises of 2007-09. In contrast, gold leads world Islamic emerging markets and displays negative relation across a range of frequencies and indicates safe haven effects for the returns of Islamic stock markets. This low correlation between gold and Islamic stock markets indicates that gold can provide diversification to the portfolios of Islamic stock markets. Panel cointegration analysis depicts that the Islamic emerging and BRICS equity markets are cointegrated and global investor should have to carefully monitor the risk associated with them. Based on these results we infer that gold investment has potential to safe guard the stock portfolios in short-run against extreme negative market shocks. However, in long-run, gold does not seem to be a strong safe haven. Further, Dow Jones world Islamic emerging market index shows low correlation with only conventional stock market of China. This suggests significant diversification benefits of Islamic stocks for Chinese investors.

Trust and Tax Compliance Among Malaysian Working Youth

A high level of tax morale is necessary in promoting tax compliance among the public, including youth who tend to have a low sense of responsibility. The current tax system and working youth segment of Malaysia are first explained. Based on the relevant literature on taxation, important factors that influence trust and the resulting tax compliance are conceptualized in a research model. An online survey was administered on youth throughout Malaysia that resulted in 2,030 usable responses, of which 500 were used in testing the model. The empirical results from using partial least squares analysis show that one of the two trust variables and tax knowledge are significant determinants of tax compliance. In addition, youth in the registered taxpayers group exhibited a greater level of compliance intention than non-registered youth.

Board of directors' quality and firms' debt financing: the moderating effect of insider ownership - evidence from Omani firms

ABSTRACT This study aims to examine the direct effects of board of directors’ quality and insider ownership on firms’ capital structure and the moderating effect of insider ownership on the relationship between board of directors’ quality and firms’ capital structure. The sample of this study consists of the time period 2005–2011. The final sample consists of 535 firm-year observations of public nonfinancial firms listed on the Muscat Securities Market (MSM). The hypotheses are tested using a random effects model. The results reveal that the coefficient sign on the board of directors’ quality is as predicted, but the coefficient sign is insignificant. Further, the results show that insider ownership is positively associated with leverage at the significant level of 10%, suggesting that the inside substantial shareholders employ higher leverage. With regard to the moderating effect of insider ownership, the findings show that the effect of the board of directors’ quality-leverage relationship becomes negative and stronger with increasing insider ownership.