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Are Islamic incomes relevance to commercial banks in Malaysia?

A significant price-to-earnings relation is evident in many research findings, which includes study on Malaysia Stock Markets, that the strength, consistency and magnitude of the relation are not as large as those reported in institutionally more developed markets. However, the price adjustment is s...

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Main Authors: Cheng, Fan Fah, Md Nasir, Annuar
Format: Article
Language:English
Published: David Publishing Company 2010
Online Access:http://psasir.upm.edu.my/id/eprint/13264/1/Are%20Islamic%20incomes%20relevance%20to%20commercial%20banks%20in%20Malaysia.pdf
http://psasir.upm.edu.my/id/eprint/13264/
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spelling my.upm.eprints.132642015-11-02T06:26:10Z http://psasir.upm.edu.my/id/eprint/13264/ Are Islamic incomes relevance to commercial banks in Malaysia? Cheng, Fan Fah Md Nasir, Annuar A significant price-to-earnings relation is evident in many research findings, which includes study on Malaysia Stock Markets, that the strength, consistency and magnitude of the relation are not as large as those reported in institutionally more developed markets. However, the price adjustment is stronger if price reaction is measured over a long periods, which is consistent to speculative trading. Firm-specific variables such as revenue, firm size and debt-equity have no incremental information content beyond earnings implies that the market monitoring process in an emerging market focuses on earnings only during financial announcement. Therefore, this paper revisited the study on the relevant of accounting earnings by looking at Islamic Income for commercial banks in Malaysia using the earnings response coefficients, which are the earnings-to-share return coefficients that are estimated for sub earnings components by including Islamic banking incomes in the analysis. This paper discovered that though there is a positive effect, the earnings from Islamic banking operation are small. Thus, the total earnings as well as the sub-categories of earnings of banks appear to enter the pricing considerations of investors. David Publishing Company 2010-02 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/13264/1/Are%20Islamic%20incomes%20relevance%20to%20commercial%20banks%20in%20Malaysia.pdf Cheng, Fan Fah and Md Nasir, Annuar (2010) Are Islamic incomes relevance to commercial banks in Malaysia? Journal of Modern Accounting and Auditing, 6 (2). pp. 26-37. ISSN 1548-6583
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description A significant price-to-earnings relation is evident in many research findings, which includes study on Malaysia Stock Markets, that the strength, consistency and magnitude of the relation are not as large as those reported in institutionally more developed markets. However, the price adjustment is stronger if price reaction is measured over a long periods, which is consistent to speculative trading. Firm-specific variables such as revenue, firm size and debt-equity have no incremental information content beyond earnings implies that the market monitoring process in an emerging market focuses on earnings only during financial announcement. Therefore, this paper revisited the study on the relevant of accounting earnings by looking at Islamic Income for commercial banks in Malaysia using the earnings response coefficients, which are the earnings-to-share return coefficients that are estimated for sub earnings components by including Islamic banking incomes in the analysis. This paper discovered that though there is a positive effect, the earnings from Islamic banking operation are small. Thus, the total earnings as well as the sub-categories of earnings of banks appear to enter the pricing considerations of investors.
format Article
author Cheng, Fan Fah
Md Nasir, Annuar
spellingShingle Cheng, Fan Fah
Md Nasir, Annuar
Are Islamic incomes relevance to commercial banks in Malaysia?
author_facet Cheng, Fan Fah
Md Nasir, Annuar
author_sort Cheng, Fan Fah
title Are Islamic incomes relevance to commercial banks in Malaysia?
title_short Are Islamic incomes relevance to commercial banks in Malaysia?
title_full Are Islamic incomes relevance to commercial banks in Malaysia?
title_fullStr Are Islamic incomes relevance to commercial banks in Malaysia?
title_full_unstemmed Are Islamic incomes relevance to commercial banks in Malaysia?
title_sort are islamic incomes relevance to commercial banks in malaysia?
publisher David Publishing Company
publishDate 2010
url http://psasir.upm.edu.my/id/eprint/13264/1/Are%20Islamic%20incomes%20relevance%20to%20commercial%20banks%20in%20Malaysia.pdf
http://psasir.upm.edu.my/id/eprint/13264/
_version_ 1643825278390108160
score 13.211869

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