Staff View: Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares

Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares

Purpose – This paper aims to investigate the value of information content and informativeness of the analyst report for Sharīʿah-compliant shares in Malaysia. Design/methodology/approach – The authors use a sample of 657 daily published analyst reports on Sharīʿah-compliant shares from 2010 to 20...

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Main Authors:	Thas Thaker, Hassanudin Mohd, Mohamad, Azhar, Mustaffa Kamil, Nazrol Kamil, Duasa, Jarita
Format:	Article
Language:	English English
Published:	Emerald Publishing Limited 2020
Subjects:	HG3368 Islamic Banking and Finance HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation
Online Access:	http://irep.iium.edu.my/80046/7/80046%20Information%20content.pdf http://irep.iium.edu.my/80046/8/80046%20Information%20content%20SCOPUS.pdf http://irep.iium.edu.my/80046/ https://www.emerald.com/insight/content/doi/10.1108/JIABR-05-2017-0065/full/html
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spelling	my.iium.irep.800462020-11-19T02:42:34Z http://irep.iium.edu.my/80046/ Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares Thas Thaker, Hassanudin Mohd Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita HG3368 Islamic Banking and Finance HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation Purpose – This paper aims to investigate the value of information content and informativeness of the analyst report for Sharīʿah-compliant shares in Malaysia. Design/methodology/approach – The authors use a sample of 657 daily published analyst reports on Sharīʿah-compliant shares from 2010 to 2015, which were downloaded from Bursa Malaysia’s repository system. The method was quantitative in nature and panel regression analysis was used. Diagnostics tests including the variance inflation factor, correlation analysis, heteroskedasticity test, serial auto-correlation and the Hausman test were performed to ensure validity and reliability of data. The significance of the variables indicated whether the analyst reports contained valuable information on Shariah compliancy. Findings – Results obtained from the FEM-Robust model revealed that the R2 value was equivalent to 0.79 per cent, suggesting that the power of return explained by the information content and informativeness was less for Sharīʿah-compliant shares. The F-statistics were statistically significant for all models, postulating that the data used were reliable and fit for the purpose of analysis. The findings showed that the information content of target price and earnings forecasts significantly influenced the returns of Sharīʿah-compliant shares. In terms of informativeness, return on equity, sales to price ratio and cash flow to price were associated with the returns of the shares. Practical implications – The outcome from this finding confirmed that the analyst report retained its position as a good source of reference when making investment decisions. However, the disclosure of information in the form of qualitative information together with fundamental information should be enhanced for Sharīʿah-compliant share so that investors would have adequate information when making an investment decision. Originality/value – This study will supply more insights into the matter of information content and informativeness of the analyst report in Malaysia by focussing on Sharīʿah-compliant shares, which is practically an underexplored research area in Malaysia. Emerald Publishing Limited 2020-01-02 Article PeerReviewed application/pdf en http://irep.iium.edu.my/80046/7/80046%20Information%20content.pdf application/pdf en http://irep.iium.edu.my/80046/8/80046%20Information%20content%20SCOPUS.pdf Thas Thaker, Hassanudin Mohd and Mohamad, Azhar and Mustaffa Kamil, Nazrol Kamil and Duasa, Jarita (2020) Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares. Journal of Islamic Accounting and Business Research, 11 (4). pp. 869-888. ISSN 1985-2517 E-ISSN 1759-0825 https://www.emerald.com/insight/content/doi/10.1108/JIABR-05-2017-0065/full/html 10.1108/JIABR-05-2017-0065
institution	Universiti Islam Antarabangsa Malaysia
building	IIUM Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	International Islamic University Malaysia
content_source	IIUM Repository (IREP)
url_provider	http://irep.iium.edu.my/
language	English English
topic	HG3368 Islamic Banking and Finance HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation
spellingShingle	HG3368 Islamic Banking and Finance HG4001 Financial management. Business finance. Corporation finance. HG4501 Stocks, investment, speculation Thas Thaker, Hassanudin Mohd Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
description	Purpose – This paper aims to investigate the value of information content and informativeness of the analyst report for Sharīʿah-compliant shares in Malaysia. Design/methodology/approach – The authors use a sample of 657 daily published analyst reports on Sharīʿah-compliant shares from 2010 to 2015, which were downloaded from Bursa Malaysia’s repository system. The method was quantitative in nature and panel regression analysis was used. Diagnostics tests including the variance inflation factor, correlation analysis, heteroskedasticity test, serial auto-correlation and the Hausman test were performed to ensure validity and reliability of data. The significance of the variables indicated whether the analyst reports contained valuable information on Shariah compliancy. Findings – Results obtained from the FEM-Robust model revealed that the R2 value was equivalent to 0.79 per cent, suggesting that the power of return explained by the information content and informativeness was less for Sharīʿah-compliant shares. The F-statistics were statistically significant for all models, postulating that the data used were reliable and fit for the purpose of analysis. The findings showed that the information content of target price and earnings forecasts significantly influenced the returns of Sharīʿah-compliant shares. In terms of informativeness, return on equity, sales to price ratio and cash flow to price were associated with the returns of the shares. Practical implications – The outcome from this finding confirmed that the analyst report retained its position as a good source of reference when making investment decisions. However, the disclosure of information in the form of qualitative information together with fundamental information should be enhanced for Sharīʿah-compliant share so that investors would have adequate information when making an investment decision. Originality/value – This study will supply more insights into the matter of information content and informativeness of the analyst report in Malaysia by focussing on Sharīʿah-compliant shares, which is practically an underexplored research area in Malaysia.
format	Article
author	Thas Thaker, Hassanudin Mohd Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita
author_facet	Thas Thaker, Hassanudin Mohd Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita
author_sort	Thas Thaker, Hassanudin Mohd
title	Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
title_short	Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
title_full	Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
title_fullStr	Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
title_full_unstemmed	Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
title_sort	information content and informativeness of the analyst report in malaysia: evidence from sharīʿah-compliant shares
publisher	Emerald Publishing Limited
publishDate	2020
url	http://irep.iium.edu.my/80046/7/80046%20Information%20content.pdf http://irep.iium.edu.my/80046/8/80046%20Information%20content%20SCOPUS.pdf http://irep.iium.edu.my/80046/ https://www.emerald.com/insight/content/doi/10.1108/JIABR-05-2017-0065/full/html
_version_	1684653056263716864
score	13.211869

Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares

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