Cover Image

Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?

The purpose of this study is to investigate exporter’s currencies exposures in Malaysia listed firms. The study also attempt to determine the relationship between the stock returns of Malaysia listed firms and the foreign currencies exposures’ portfolio (USD, SGD, THB, JPY, POUND, and EURO). The sam...

Full description

Saved in:
Bibliographic Details
Main Author: Chang, Hui Siang
Format: Final Year Project Report
Language:English
Published: Universiti Malaysia Sarawak, (UNIMAS) 2011
Subjects:
HF Commerce
HG Finance
Online Access:http://ir.unimas.my/id/eprint/6417/8/FOREIGN%20CURRENCIES%20EXPOSURES%20OF%20MALAYSIA%20FIRMS%20DOES%20HEDGING%20STRATEGY%20EXPLAIN%20STOCK%20RETURNS%28OCR%29.pdf
http://ir.unimas.my/id/eprint/6417/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.unimas.ir.6417
record_format eprints
spelling my.unimas.ir.64172023-02-06T06:52:42Z http://ir.unimas.my/id/eprint/6417/ Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns? Chang, Hui Siang HF Commerce HG Finance The purpose of this study is to investigate exporter’s currencies exposures in Malaysia listed firms. The study also attempt to determine the relationship between the stock returns of Malaysia listed firms and the foreign currencies exposures’ portfolio (USD, SGD, THB, JPY, POUND, and EURO). The sample consists of 241 listed firms from 2008 to 2009. Out of 947 firms, 241 firms have foreign currencies exposures on USD (7.1 billion), SGD (1.2 billion), THB (72 billions), JPY (22 million), POUND (0.1 billion) and EURO (0.3 billion) for two years. This analysis based on account receivables for foreign currencies exposures and significant level of MYR appreciation and depreciation on the stock returns. The results reveal that the USD currency portfolio is the most dominant source of foreign currencies exposures, this followed by SGD, EURO, THB, POUND and JPY. In contrast, the main findings show that the EURO currency portfolio is the most significant source of currency exposure risk that will increase the firms’ returns when MYR/EURO appreciate, which is opposite to our expectations. Despite that, USD currency portfolio is insignificant contribute to the firms’ return. Nevertheless, the study finds that hedging play an important role. A larger firm with hedging on USD is found to increase stock returns when MYR depreciate 1 per cent against USD, which is benefited the exporters. The results were opposite if the exporter firms do not apply hedging contracts on foreign currencies. Overall, hedging strategy is found to be an effecting tool to reduce risk of USD exposures. Universiti Malaysia Sarawak, (UNIMAS) 2011 Final Year Project Report NonPeerReviewed text en http://ir.unimas.my/id/eprint/6417/8/FOREIGN%20CURRENCIES%20EXPOSURES%20OF%20MALAYSIA%20FIRMS%20DOES%20HEDGING%20STRATEGY%20EXPLAIN%20STOCK%20RETURNS%28OCR%29.pdf Chang, Hui Siang (2011) Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns? [Final Year Project Report] (Unpublished)
institution Universiti Malaysia Sarawak
building Centre for Academic Information Services (CAIS)
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sarawak
content_source UNIMAS Institutional Repository
url_provider http://ir.unimas.my/
language English
topic HF Commerce
HG Finance
spellingShingle HF Commerce
HG Finance
Chang, Hui Siang
Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?
description The purpose of this study is to investigate exporter’s currencies exposures in Malaysia listed firms. The study also attempt to determine the relationship between the stock returns of Malaysia listed firms and the foreign currencies exposures’ portfolio (USD, SGD, THB, JPY, POUND, and EURO). The sample consists of 241 listed firms from 2008 to 2009. Out of 947 firms, 241 firms have foreign currencies exposures on USD (7.1 billion), SGD (1.2 billion), THB (72 billions), JPY (22 million), POUND (0.1 billion) and EURO (0.3 billion) for two years. This analysis based on account receivables for foreign currencies exposures and significant level of MYR appreciation and depreciation on the stock returns. The results reveal that the USD currency portfolio is the most dominant source of foreign currencies exposures, this followed by SGD, EURO, THB, POUND and JPY. In contrast, the main findings show that the EURO currency portfolio is the most significant source of currency exposure risk that will increase the firms’ returns when MYR/EURO appreciate, which is opposite to our expectations. Despite that, USD currency portfolio is insignificant contribute to the firms’ return. Nevertheless, the study finds that hedging play an important role. A larger firm with hedging on USD is found to increase stock returns when MYR depreciate 1 per cent against USD, which is benefited the exporters. The results were opposite if the exporter firms do not apply hedging contracts on foreign currencies. Overall, hedging strategy is found to be an effecting tool to reduce risk of USD exposures.
format Final Year Project Report
author Chang, Hui Siang
author_facet Chang, Hui Siang
author_sort Chang, Hui Siang
title Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?
title_short Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?
title_full Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?
title_fullStr Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?
title_full_unstemmed Foreign currencies exposures of Malaysia firms : does hedging strategy explain stock returns?
title_sort foreign currencies exposures of malaysia firms : does hedging strategy explain stock returns?
publisher Universiti Malaysia Sarawak, (UNIMAS)
publishDate 2011
url http://ir.unimas.my/id/eprint/6417/8/FOREIGN%20CURRENCIES%20EXPOSURES%20OF%20MALAYSIA%20FIRMS%20DOES%20HEDGING%20STRATEGY%20EXPLAIN%20STOCK%20RETURNS%28OCR%29.pdf
http://ir.unimas.my/id/eprint/6417/
_version_ 1758582473150693376
score 13.211869

Similar Items