Rubi Ahmad

Correction: Market Structure, Financial Dependence and Industrial Growth: Evidence from the Banking Industry in Emerging Asian Economies.

[This corrects the article DOI: 10.1371/journal.pone.0160452.].

Blockholders, Corporate Governance and the Value of the Firm: A Panel Data Analysis of Malaysian Non-Financial Companies

In South-East Asian corporations where ownership is typically highly concentrated, ownership structure plays an important role to align the interests between managers and shareholders. Consequently, blockholders may have personal incentives other than maximizing shareholders’ wealth by exercising their corporate control. With the existence of poor corporate governance structure and lower level of investor protection in Malaysia, this study examines the relationship between blockholder ownership and firm performance. One way fixed effect univariate analysis supports the entrenchment hypothesis, with very low effects, that blockholders expropriate corporate wealth. On the other hand, multivariate analysis reveals the blockholders with higher firm value especially while considering accounting based measure of performance and industry effects. It is also found that Oil and Gas industry exhibit better product market competitions among all industries of Malaysian economy.

Stock Market Deregulation, Macroeconomic Variables and Stock Market Performances

The purpose of this paper is to explore the effects of subsequent stock market deregulations on stock market performances in ASEAN-3: Malaysia, Thailand and Indonesia. The study focuses on the impact of subsequent stock market deregulations instead of the first stock market deregulation. Subsequent stock market deregulation is defined as the percentage change in foreign ownership of local equities from 1997. The effects of subsequent stock market deregulation are analyzed with and without the inclusion of macroeconomic variables. Thus, this study also explores the effects of macroeconomic factors: exchange rates, interest rates, oil prices and market liquidity, on stock market performances. Univariate and multivariate regression analyses on weekly basis, with 53-trading week event window, are the applied methodology. The empirical findings support two conclusions: firstly, subsequent stock market deregulation policies implemented in and after 1997 are not significantly effective in improving stock market performances of liberalizing countries; and secondly, macroeconomic variables have significant impact on the performances of liberalizing countries’ stock markets in some of these events. The results would assist government authorities in making their decisions related to stock market deregulation.

Dynamics between currency and equity in Chinese markets

Purpose – This study aims to examine the dynamics between exchange rate and equities contextualizing the current liberal currency regime in China. This investigation also extends the analysis to explore the potential important factors influencing the interactions between these two markets. After exchange rate reforms, currency issue has emerged as a new dimension in portfolio decisions and diversification strategies in Chinese equity markets. Design/methodology/approach – This research uses the dynamic conditional correlation generalized autoregressive conditional heteroskedasticity model proposed by Engle (2002) to explore the dynamic interactions between the currency and stock markets. Further, the paper uses regression analysis to explore the explanatory channels of the correlation. The sample comprises 1,265 listed companies over the period 2005-2012 with daily, weekly and monthly observations. To make analysis robust, the study also considers different exchange rates and equities belonging to differe...

How does total quality management influence the loan quality of the bank

This paper aims to investigate whether, and to what extent, total quality management (TQM) influences bank loan quality. We propose an approach to measure TQM for evaluating this relationship. The proposed measure is the residual from the Fama–MacBeth regression based on bank efficiency proxied by the income-to-cost ratio. Our proposed TQM measure is statistically significant. We obtain data of 581 US commercial banks from the SNL Financial database for the period 1991–2013 with a total of 13,303 bank-year observations. The result shows that TQM is positively related to bank loan quality. This suggests that the implementation of better TQM can help management to monitor borrowers, improve competition and efficiency, manage good-quality loan portfolios, minimise expenses, and generate more revenues. This research has several implications for regulation, TQM implementation, and policy for the banking industry. In sum, an association between TQM and loan quality allows us to expand our knowledge of the specific role of TQM in bank performance, management decision, and managing loan portfolios.

Exchange-rate variability and industry trade flows between Malaysia and Japan

This research investigates the exchange-rate risk sensitivity of Malaysian bilateral trade flows with its important trading partner, Japan. To this end, bounds testing approach to co-integration is applied using industry level data over the monthly period 2000–2013. Findings suggest that above the one-third of the total co-integrated export (43.86%) and import (34.54%), industries experiences the ringgit/yen variability effect in the short run. However, this effect sustains in relatively less number of export (14.03%) and import (32.73%) industries in the long run. It is interesting to note that exchange-rate risk boosts trade flows in the majority of these affected industries.

Determinants of bank profitability: a comparative study of East Asia and Latin America

This paper identifies the determinants of profitability using an unbalanced panel of 78 East Asian and 89 Latin American banks for the period 2003-2014. We regress profitability against bank-specific variables (capital adequacy, cost-income ratio, liquidity ratio, loan loss reserve ratio, and bank size) and macroeconomic variables (gross domestic product, inflation and bank concentration). Our dynamic panel regression model suggests that bank profitability in East Asia is determined by more bank-specific variables than macroeconomic variables; the reverse, however, applies to Latin America. We contribute to current literature by: 1) using a more robust profitability measure (risk-adjusted returns); 2) employing both bank-specific and macroeconomic variables; 3) studying two large and fast-developing regions of East Asia and Latin America. Our findings enhance our theoretical and practical knowledge of bank-specific profitability determinants. It also enables policy makers to deliberate on the pertinent macroeconomic determinants such as inflation and concentration ratio.

Exchange Rates Responses to Macroeconomic Surprises: Evidence from the Asia-Pacific Markets

This paper reports new findings from Asia-Pacific economies on exchange rate revisions following macroeconomic shocks. Regional macroeconomic shocks are as important as the U.S. macroeconomic shocks in affecting exchange rate returns. All Asia-Pacific currencies with the exception of Thai baht react significantly to local macroeconomic shocks. Australian dollar is identified as the most elastic currency responding to macroeconomic shocks, and is more responsive than the Japanese yen. Interest-rate related shocks are generally the most influential events. We provide a ranking list on the relative impact sensitivity of macroeconomic shocks. The announcement effect of the U.S. open market actions via Fed Rate revisions is recognised as the most significant event among the 107 macroeconomic announcements examined.

An Overview of Islamic Capital Market (ICM) and Sukuk Industry

This chapter provides an overview about the Islamic capital market (ICM), which is regarded as a vibrant market segment in Islamic finance. The ICM is a marketplace that is free from non-Shariah compliant activities. There are many important activities and instruments offered in the ICM such as Sukuk, shares, RETS, ETF, and others. The ICM plays an important role in the development of finance and the economy as it opens up opportunities for investment and fund raising. This chapter offers a general introduction to the ICM and covers some of its very important aspects. It provides a general overview of the Sukuk market in Islamic finance, examines the growth of the Sukuk industry and its challenges in the current global financial market, presents an analysis of Sukuk in the ICM, and discusses key milestones in the Sukuk Market.

Introduction to Sukuk

This chapter provides an introduction to Sukuk in the Islamic capital market (ICM). Sukuk is defined as certificates of equal value representing ownership over an underlying asset. Sukuk represents common shares and rights over the underlying assets or over usufruct (benefits derived from an underlying asset) and services. It is regarded as one of the most important financial instruments in Islamic finance and is a leading product in the ICM. It has its own features and specifications that distinguish it from other financial instruments in conventional finance such as bonds.