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Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia

This paper examines the market reaction to hybrid security announcements in an emerging country, specifically Malaysia, from January 1996 to December 2009. The results indicated that announcements of the intention to issue convertible bonds in Malaysia are significantly associated with negative abno...

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Main Authors: Abdul Rahim, Norhuda, Abdul Rahman, Fauziah
Format: Article
Language:English
Published: Universiti Putra Malaysia Press 2015
Online Access:http://psasir.upm.edu.my/id/eprint/46891/1/18%20JSSH-1207-2014.pdf
http://psasir.upm.edu.my/id/eprint/46891/
http://www.pertanika.upm.edu.my/pjssh/browse/special-issue?decade=2020&year=2015&journal=JSSH-23-S-9
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spelling my.upm.eprints.468912022-05-25T03:47:02Z http://psasir.upm.edu.my/id/eprint/46891/ Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia Abdul Rahim, Norhuda Abdul Rahman, Fauziah This paper examines the market reaction to hybrid security announcements in an emerging country, specifically Malaysia, from January 1996 to December 2009. The results indicated that announcements of the intention to issue convertible bonds in Malaysia are significantly associated with negative abnormal returns of 1.10% (significant at the 10% level) on the event window of (-1, 1). On the other hand, announcements of the intention to issue warrant-bonds document significantly positive abnormal returns of 2.25% (significant at the 5% level) on the same event window. The ‘univariate’ test confirmed that the wealth effect associated with the announcement of the intention to issue warrant-bonds is larger (i.e., more positive) than convertible bonds, in line with a few studies conducted in different markets. The findings of this study highlight that listed firms with high risk uncertainty in Malaysia contribute to more negative abnormal returns in comparison to lower risk uncertainty firms. Universiti Putra Malaysia Press 2015-09 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/46891/1/18%20JSSH-1207-2014.pdf Abdul Rahim, Norhuda and Abdul Rahman, Fauziah (2015) Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia. Pertanika Jornal of Social Sciences and Humanities, 23 (spec.). pp. 187-204. ISSN 0128-7702; ESSN: 2231-8534 http://www.pertanika.upm.edu.my/pjssh/browse/special-issue?decade=2020&year=2015&journal=JSSH-23-S-9
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 This paper examines the market reaction to hybrid security announcements in an emerging country, specifically Malaysia, from January 1996 to December 2009. The results indicated that announcements of the intention to issue convertible bonds in Malaysia are significantly associated with negative abnormal returns of 1.10% (significant at the 10% level) on the event window of (-1, 1). On the other hand, announcements of the intention to issue warrant-bonds document significantly positive abnormal returns of 2.25% (significant at the 5% level) on the same event window. The ‘univariate’ test confirmed that the wealth effect associated with the announcement of the intention to issue warrant-bonds is larger (i.e., more positive) than convertible bonds, in line with a few studies conducted in different markets. The findings of this study highlight that listed firms with high risk uncertainty in Malaysia contribute to more negative abnormal returns in comparison to lower risk uncertainty firms.
format Article
author Abdul Rahim, Norhuda
Abdul Rahman, Fauziah
spellingShingle Abdul Rahim, Norhuda
Abdul Rahman, Fauziah
Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia
author_facet Abdul Rahim, Norhuda
Abdul Rahman, Fauziah
author_sort Abdul Rahim, Norhuda
title Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia
title_short Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia
title_full Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia
title_fullStr Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia
title_full_unstemmed Wealth effects associated with announcements of hybrid securities in an emerging country: evidence from Malaysia
title_sort wealth effects associated with announcements of hybrid securities in an emerging country: evidence from malaysia
publisher Universiti Putra Malaysia Press
publishDate 2015
url http://psasir.upm.edu.my/id/eprint/46891/1/18%20JSSH-1207-2014.pdf
http://psasir.upm.edu.my/id/eprint/46891/
http://www.pertanika.upm.edu.my/pjssh/browse/special-issue?decade=2020&year=2015&journal=JSSH-23-S-9
_version_ 1734301570712993792
score 13.211869

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