Norli Ali

Firm's Growth and Sustainability: The Role of Institutional Investors in Mitigating the Default Risks of Sukuk and Conventional Bonds☆

Abstract This study investigates the relationship of conventional bonds and sukuk’ yields spread to institutional investors using multivariate regression model. Secondary data was used for issuance (N= 212 of conventional bonds and 325 of sukuk) cover the 2000-2014 periods which are gathered from Bank Negara Info Bond Hub website. Though, data on issuer performance has been obtained from Bloomberg and Thompson Data Stream. The results revealed that monitoring role and voting rights decisions by owned large ownership of shareholding in the company have a relationship towards sukuk issuances in mitigating the default risks but not for conventional bonds. Overall, there are 6 variables statistically significant relationship with yields spread for conventional bonds compared to only 4 for sukuk. Implying that, sukuk issuance doesn’t have any significant relationship with the elements that involved “riba” for instance, volatility effects and inflation rate proxy by consumer price index (CPI) as recorded by conventional bonds. However, both types of issuances give a good signal for the firms sustainability growth performance at 99 percent significant level to mitigate the default risks with respect to yield spreads of sukuk and conventional bonds.

Dividend policy and share price volatility: Evidence from Malaysia

Numerous studies has been conducted in the area of dividend policy, yet little were made to find association between dividend policy and share price volatility especially in emerging market like Malaysia. Using data from 2002 to 2011, results from a cross sectional multiple regression analysis found a significant negative relationship between dividend yield and share price volatility in Malaysia. On the other hand, in line with previous studies, a significant positive relationship was found between leverage and share price volatility. This study contributes to the dearth of literatures associating dividend policy and share price volatility as well as supporting the dividend relevant theory. Based on past researches on dividend policy conducted in Malaysia, there is no other similar study seek to prove the relationship between dividend policy and share price volatility especially when it incorporates latest data up to 2011.