Cover Image

Islamic bonds and the wealth effects: Evidence from Malaysia

The fast growing numbers of Islamic bonds issuance in Malaysia and worldwide, coupled with the lack of corporate finance literature that integrates the development of Islamic capital market motivate the study on the wealth effects of Islamic debt offerings and their determinants.It is found that the...

Full description

Saved in:
Bibliographic Details
Main Authors: Ibrahim, Yusnidah, Minai, Mohd Sobri
Format: Article
Language:English
Published: LLC “СPС “Business Perspectives” 2009
Subjects:
HF5601 Accounting
Online Access:http://repo.uum.edu.my/15735/1/imfi.pdf
http://repo.uum.edu.my/15735/
http://businessperspectives.org/component/option,com_journals/task,issue/id,103/jid,4/Itemid,74/
Tags: Add Tag
No Tags, Be the first to tag this record!
id my.uum.repo.15735
record_format eprints
spelling my.uum.repo.157352016-04-25T07:06:56Z http://repo.uum.edu.my/15735/ Islamic bonds and the wealth effects: Evidence from Malaysia Ibrahim, Yusnidah Minai, Mohd Sobri HF5601 Accounting The fast growing numbers of Islamic bonds issuance in Malaysia and worldwide, coupled with the lack of corporate finance literature that integrates the development of Islamic capital market motivate the study on the wealth effects of Islamic debt offerings and their determinants.It is found that the market reaction is significantly positive during event windows -3, 0 and -3, 3 surrounding the announcements of Islamic debt issuance.Five variables suggested by the capital structure literature, namely firms size (SIZE), issue size (AMT), leverage (LEV), free cash flows (FCF) and investment opportunity (TQ) together with two new variables, the syariah compliant status (SYAR) and the Security Commission’s (SC) approval (APPROVAL) were modeled as potential explanatory variables of the wealth effects.The study concludes that the wealth effect of Islamic bond issuance announcements is positively influenced by the issuer’s investment opportunity and negatively influenced by the issue size, firm size and whether the announcement is accompanied by the SC approval.The finding implies that the positive reaction is not due to investors’ preference for Islamic compliant activities but it is due to similar factors found in studies on conventional bonds.The negative influence of SC approval on the wealth effect indicates that many listed companies issuing Islamic debt are not complying with the information disclosure requirement. LLC “СPС “Business Perspectives” 2009 Article PeerReviewed application/pdf en http://repo.uum.edu.my/15735/1/imfi.pdf Ibrahim, Yusnidah and Minai, Mohd Sobri (2009) Islamic bonds and the wealth effects: Evidence from Malaysia. Investment Management and Financial Innovations, 6 (1). pp. 184-191. ISSN 1810-4967 http://businessperspectives.org/component/option,com_journals/task,issue/id,103/jid,4/Itemid,74/
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HF5601 Accounting
spellingShingle HF5601 Accounting
Ibrahim, Yusnidah
Minai, Mohd Sobri
Islamic bonds and the wealth effects: Evidence from Malaysia
description The fast growing numbers of Islamic bonds issuance in Malaysia and worldwide, coupled with the lack of corporate finance literature that integrates the development of Islamic capital market motivate the study on the wealth effects of Islamic debt offerings and their determinants.It is found that the market reaction is significantly positive during event windows -3, 0 and -3, 3 surrounding the announcements of Islamic debt issuance.Five variables suggested by the capital structure literature, namely firms size (SIZE), issue size (AMT), leverage (LEV), free cash flows (FCF) and investment opportunity (TQ) together with two new variables, the syariah compliant status (SYAR) and the Security Commission’s (SC) approval (APPROVAL) were modeled as potential explanatory variables of the wealth effects.The study concludes that the wealth effect of Islamic bond issuance announcements is positively influenced by the issuer’s investment opportunity and negatively influenced by the issue size, firm size and whether the announcement is accompanied by the SC approval.The finding implies that the positive reaction is not due to investors’ preference for Islamic compliant activities but it is due to similar factors found in studies on conventional bonds.The negative influence of SC approval on the wealth effect indicates that many listed companies issuing Islamic debt are not complying with the information disclosure requirement.
format Article
author Ibrahim, Yusnidah
Minai, Mohd Sobri
author_facet Ibrahim, Yusnidah
Minai, Mohd Sobri
author_sort Ibrahim, Yusnidah
title Islamic bonds and the wealth effects: Evidence from Malaysia
title_short Islamic bonds and the wealth effects: Evidence from Malaysia
title_full Islamic bonds and the wealth effects: Evidence from Malaysia
title_fullStr Islamic bonds and the wealth effects: Evidence from Malaysia
title_full_unstemmed Islamic bonds and the wealth effects: Evidence from Malaysia
title_sort islamic bonds and the wealth effects: evidence from malaysia
publisher LLC “СPС “Business Perspectives”
publishDate 2009
url http://repo.uum.edu.my/15735/1/imfi.pdf
http://repo.uum.edu.my/15735/
http://businessperspectives.org/component/option,com_journals/task,issue/id,103/jid,4/Itemid,74/
_version_ 1644281789706928128
score 13.211869

Similar Items