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Vol. 14, 2018 - 2019

A Review of IPO Under-pricing Phenomenon in Asia
Ali Albada & Othman Yong*
Graduate School of Business, Universiti Kebangsaan Malaysia, Malaysia

Abstract Ɩ Full Text

This paper reviews the current status of IPO research in Asia, especially when it comes to the issue of the under-pricing phenomenon. This interest stems from the increasing attention that some of the Asia Pacific region countries have, due to their higher average initial returns in comparison to other developed and developing countries. In this review, we identify the determinants for the high levels of under-pricing as reported in the literature. We find that the regulatory environment of these Asian countries is the most reasonable source for such under-pricing, as it sets it apart from other developed and developing countries.
Keywords: IPOs, Initial public offerings, Asian IPOs, IPO under-pricing, Regulatory environment.
JEL Classification: G11, G12, G14, G24, G32

Decision to pay dividends and ownership structures in Nigeria
Adamu Idris Adamu*
Department of Accounting, Federal University Dutsin-Ma, Nigeria
TISSA, Universiti Utara Malaysia, Malaysia
Rokiah Ishak & Nor Laili Hassan
TISSA, Universiti Utara Malaysia, Malaysia

Abstract Ɩ Full Text

Empirical evidence on how ownership structures influence decision to pay dividends remain unclear in the dividend policy literature. This paper is set to investigate the association between ownership structures and decision to pay dividends. The sample firms of this study consist of non-financial firms listed on the Nigerian Stock Exchange for the period 2011 to 2015 with 270 firm-year observations and logit regression models used to examine the relationship. The study revealed strong evidence that institutional investors were positively related to the decision to pay dividends. However, managerial shareholding was found to have an inverse effect on firms’ probability to pay dividends. Additional analysis was carried out only on dividend payers and the results were also consistent with the hypothesis. Despite this, the managerial investors were somehow weak when the sample was reduced to dividend payers. Cumulatively, the results are robust and show support of the agency theory and hence, imply that institutional investors in Nigeria have preference for dividend payers.

Keywords: Decision to pay dividends, Ownership structures, Emerging market.
JEL Classification: AG32, G350, G390

Determinants of Capital Structure for Malaysian Shariah-Compliant Firms: The Impact of Revised Screening Methodology
Norfhadzilahwati Rahim*, Fauzias Mat Nor, Nurainna Ramli & Ainulashikin Marzuki
Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Malaysia
Abstract Ɩ Full Text

This study investigates two main objectives. Firstly, the determinants of capital structure were examined for each sector among Malaysian Shariah-compliant firms, and whether the inclusion of Islamic debt (leverage 1 and leverage 2) has led to different results due to changes in the screening methodology. Secondly, this paper analyzes the target Capital Structure and Speed of Adjustment for both before and after the Revised Screening Methodology. This study employs panel data analysis by using generalized method of moment (GMM). The sample consists of 192 Shariah-compliant companies in Malaysia during the period of 1999 to 2017. The results demonstrated that the firm has target capital structure and identified specific determinants that have affected the capital structure of Shariah-compliant firms in Malaysia. Moreover, the findings have also revealed certain implications toward large firms. Large firms tend to generate more income and profit, however at the same time, these firms require more debt to support investment activities. Hence, with regards to profitability, this study identified a negative relationship between profitability and leverage for Shariah-compliant firms for all sectors. Shariah-compliant firms with high profitability will use a lower leverage in their financial activities. Thus, the results strongly support the pecking order theory. Other than that, this study found that the lagged dependent variable (lagged leverage 1 and leverage 2) presented a positive significance, and concluded that the speed of adjustment takes approximately 2 years. This suggests that the Shariah-compliant firms close approximately by 30% to 70% of the gap between current and target capital structure within one and two years. Furthermore, the findings on the target leverage level imply that after the revised screening methodology was introduced in November 2013, the speed of adjustment became faster than before the implementation of the new screening methodology. Thus, it is important for management to maintain the target leverage during financial decision making, which in turn strengthens the firm’s Shariah-compliant financial stability and sustainability, and continue to remain listed as Shariah-compliant securities. This paper provides an overview of capital structure behaviour in Malaysia.

Keywords: Capital Structure, Malaysian Public-listed Shariah-compliant firms, Panel Data Analysis.
JEL Classification:G32

Momentum Effect all over the World
Zulfiqar Ali Imran*
PhD Scholar, University of Utara Malaysia, University of Lahore, Pakistan
Woei-Chyuan Wong & Rusmawati Ismail
School of Economics, Finance & Banking, Universiti Utara Malaysia, Malaysia
Abstract Ɩ Full Text

This study is intended to reaffirm the existence and profitability of momentum investment strategies in 40 countries around the world during the period 1996–2018. The contradictory findings of previous research on the existence and profitability of momentum strategies have raised a pertinent question on the validity of efficient market hypothesis. We documented the momentum effect in 90% of our sample countries of which 52.5% exhibited positive momentum effect while 37.5% exhibited negative momentum effect. The findings were robust to two distinct sub-period analyses. The clear rejection of efficient market hypotheses is valuable to momentum traders and stock market regulators.

Keywords: Momentum effect, Reversals, Momentum investment strategies, Existence and profitability of momentum effect, Efficient market hypothesis.
JEL ClassificationG11, G12

The Roles of Health Awareness and Knowledge in Medical Takaful Purchase Intention
Muhammad Zarunnaim Haji Wahab* & Asma Mohd Tajuddin
Islamic Business School, Universiti Utara Malaysia, Malaysia
Abstract Ɩ Full Text

The present study aims to examine the factors of health awareness and knowledge that influence customers’ intention to use medical takaful coverage among the public sector officers in northern Malaysia. A quantitative research methodology was adopted to answer the objectives progressively. In the current research, data from 313 respondents were collected via questionnaires from three different organisations, namely the police department, the fire and rescue firefighter department, and the education department. Moreover, the data analysis was performed using SPSS version 22. The analysis revealed a significant and positive relationship between health awareness and knowledge and the customers’ intention to purchase medical takaful. Apart from that, the results also indicated that only health awareness has a significant influence on the intention with the strongest impact. On the other hand, the knowledge variable had no significant influence on customers’ intention to use medical takaful coverage among the respondents. A number of important limitations need to be considered in the present study which will be further explained in the conclusion section. Furthermore, the current research provides some major implications. First, on behalf of the takaful industry, the findings of the present study encourage the takaful operators, marketing teams, staffs, and agents to improve their performance by increasing their efficiency, creativity, innovation, and knowledge of product features in developing a good impression among potential customers. Second, on behalf of the public sector officers, the results of the study show the important need to enhance the customers’ intention to use medical takaful coverage. Third, the suitability of factors such as health awareness, knowledge and customers’ intention in the previous theory and literature on takaful industry has been proven in the current research. This study helps the marketing team of the takaful operators to formulate marketing strategies that can attract potential customers to participate in the medical takaful coverage, especially among the public sector officers.

Keywords: Medical Takaful, customer’s intention, health awareness, knowledge, public sector officers
JEL ClassificationM3, M1, I1

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