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International Journal of Banking and Finance (IJBF) Vol. 13, Number 2, 2017

 
Mutual Fund Performance and the Impact of Superannuation and Financial Regulation
James M. Cooper
Diligentia Venture Partners Ltd
 
Russell Gregory-Allen
Massey University
 

Abstract Ɩ Full Text

Financial innovation such as a new superannuation scheme can allow for broader participation in retirement savings by individuals, but might also impact existing investments. On the other hand, mutual fund regulation involves a balancing act between protecting investors, and allowing fund managers to exercise their skills. Some recent changes in the fund environment of New Zealand allows an examination of the impact on performance from those changes in a small, open economy. Using a sample of New Zealand mutual funds, we compared performance before and after the introduction of two significant changes in the financial environment of New Zealand. In 2007, a state-sponsored investment scheme called KiwiSaver was introduced, providing significant incentives for more and more New Zealanders to save. Participation was substantial, and by 2015 KiwiSaver funds under management had exceeded traditional open-end funds. At the time of KiwiSaver’s introduction, mutual fund regulations was quite lax, particularly in the area of financial disclosure. However, in 2013 a new law was introduced, substantially increasing the disclosure requirements for those funds participating in the KiwiSaver scheme. First we examined, the impact on the New Zealand mutual fund industry upon the introduction of KiwiSaver, and then on the introduction of the increased KiwiSaver regulations, in order to determine if these harmed the overall New Zealand mutual fund industry. We found that the New Zealand mutual funds which focused on New Zealand or Australian equities experienced some negative performance after the introduction of KiwiSaver, but the impact on the overall industry was not significant. We also found that the increased regulations had some positive impact on performance, particularly for those funds emphasising global equities.
 
Keywords: Mutual fund performance, Mutual fund regulations, Regulation changes.
JEL Classification: G11, G15, G23, G28
 

An Empirical Investigation on Credit Card Repayment Pattern of Academicians in Malaysia
Kuah Yoke Chin, Wei Chooi Yi, Chin Lai Kwan & Chia Mei Si
Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Malaysia
 

Abstract Ɩ Full Text

The credit card market has witnessed tremendous growth resulting from a paradigm shift in technology. The genuine usage of credit cards as a form of convenience has diverged to overspending, irresponsibility, revolving liability and bankruptcy. This implies that possession of credit cards has brought about a change in users’ repayment behavior. Thus, this study aims to determine academicians’ credit card repayment pattern in a private tertiary institution in Malaysia. The dependent variable is the repayment pattern and the independent variables that serve as the attributes include personal attitude and spending pattern, while, gender and parenthood serve as the moderating variables. Findings revealed that personal attitude and spending pattern were important attributes in determining the repayment pattern among the academicians. Gender and parenthood were found to play a moderating role in the repayment pattern. Findings from this study is expected to facilitate the government and credit card companies to work towards nurturing a financially healthier and informed society, and also to  each out positively to the younger generations through the influence of the academicians.

Keywords: Personal attitude, Spending pattern, Repayment pattern; Gender, parenthood
JEL Classification: D14


Qualitative Study of Profit Margin Determinants and Pricing Practices: An Islamic Banking Perspective
Fauzias Mat Nor, Amir Shaharuddin, Norhaziah Nawai & Ainulashikin Marzuki
Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Malaysia
 
W Zainuddin Wan Abdullah
School of Maritime Business and Management, Universiti Malaysia Terengganu, Malaysia
 
Abstract Ɩ Full Text

The purpose of this study is to investigate and validate the determinants of profit margins and pricing practices of Islamic banking institutions in Malaysia. The key determinants and pricing approaches were extracted using a verbal protocol followed by probing of respondents. Focus group interviews were conducted with Islamic banking experts from Bank Muamalat Malaysia Berhad, CIMB Islamic Bank Berhad, Bank Islam Malaysia Berhad and  Maybank Islamic Berhad. Preliminary analysis suggested some distinct outcomes in the identification of determinants and practices in pricing and bank margins for future research. This study has provided important insights for Islamic banks to improve their bank margins and profit by considering significant variables affecting profitability. Generally, the themes which emerged from the interviews concurred with findings from literature. However, the determinants that have yet to be captured in the literature are marketing strategies which include product risk, financing terms and conditions; and discretionary power. Awareness of Islamic banking products and cost of fund strategies are other important determinants of bank margins and profitability. This paper also has the potential to enhance bank margin determinants, concept, theory and practice.

Keywords: Islamic banks, Bank margin, Price setting, Pricing practice, Balance sheet.
JEL Classification:B22, E44, G21
 

Standardization of Trading Board Lot: Effect on Price and Liquidity
Nor Elliany Hawa Ibrahim & Kamarun Nisham Taufil Mohd
Universiti Utara Malaysia, Malaysia
 
Karren Lee-Hwei Khaw
University of Malaya, Malaysia
 
Abstract Ɩ Full Text

In this study we examined the announcement and implementation effect of the standardization of trading board lot event at the Kuala Lumpur Stock Exchange, which saw a reduction of the minimum trading unit from 1000 or 200 units to 100 units. The event was implemented in three stages, which affected all listed firms. Our findings showed that there were positive cumulative abnormal returns surrounding implementation days, indicating positive market reception of the new policy. The Securities Commission of Malaysia stated that the trading activities had increased significantly after implementation of the standard trading board lot. Regardless, this claim has never been verified from an academic perspective, which spurred us to compare its effects on liquidity in the pre- and post-standardization period. Our univariate tests showed that as a whole, the lot size reduction improved bid-ask spread and trading activities of stocks in Malaysia.

Keywords: Minimum trading unit, Market microstructure, Event study, Liquidity, Regulation
JEL ClassificationG10, G12, G14, G18
 

Foreign Ownership, Return Volatility, Trading Volume, and Risk of Stocks in Indonesia
Ahmad Maulin Naufa & I Wayan Nuka Lantara
Faculty of Economics and Business, Universitas Gadjah Mada, Indonesia
 
Abstract Ɩ Full Text

This study examines the relationship between foreign ownership and return volatility, trading volume, and risk of stocks at the Indonesia Stock Exchange (IDX). Panel data of selected companies listed on the LQ45 index of the IDX was employed for the period between 2011 and 2017. Foreign ownership was found to positively affect stock return volatility, trading volume, and risk. Hence, more substantial foreign ownership of stocks meant more drawbacks to Indonesian stocks. Therefore, there is a need for the Indonesian government to limit and regulate foreign shareholders in Indonesia.

Keywords: Indonesia, Foreign ownership, Return volatility, Volume, Risk.
JEL ClassificationG120, G150
 

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