Impact of the Monetary Policy Instruments on Islamic Stock Market Index Return

Previous studies found that Islamic stock market index in Malaysia (KLSI), does not react, or react negatively to interest rate, although one of the main criteria of Islamic finance is to avoid business and activities that yield interest because of its prohibition in Islamic laws. On the other hand, studies of Islamic stock market index in the US (DJIMI) found that there is no impact of interest rate on DJIMI. These two stock market indices have different screening criteria and different composite of securities. This study aims at investigating the monetary policy variables impact, the effect of interest rate, and the use of stock market indices as a hedge against inflation. It also examines the volatilities of monetary variables, interest rates, and inflation rate on two Islamic stock market indices. Using time series analysis such as GARCH the results are as follows. It is found that in the variance univariate models of the conventional indices that M1, M3, inflation rate, and real growth in GDP are significant in influencing KLCI volatility, while M2, M3, inflation rate and interest rate affected DJINA volatility. On the other hand, in the Islamic indices, KLSI and DJIMI variance is influenced by M2, M3, and inflation rate. In addition, in the multivariate model, DJIMI is influenced by the interest rate and the inflation rate in the mean and variance equations. In contrast, KLSI is influenced commonly in the mean and variance equations by M3, and the inflation rate

Impact of Open-Market Share Repurchases on Long-Term Stock Returns: Evidence From the Malaysian Market

After the Asian financial crisis in 1997, firms listed on Bursa Malaysia were allowed to repurchase their shares on the open market. The number of companies engaged in share buyback is increasing and has become a tool to stabilize price by signaling undervaluation of the share. However, studies on share buyback in Malaysia are limited to the price performance surrounding the buyback events. This study aims to fill this gap by examining long-run price performance after the actual share buyback event over a sampling period of 2 years from 2009 to 2010 for Malaysian firms listed on FTSE Bursa Malaysia. There is no evidence to conclude that there exist long-term abnormal returns using the calendar-time portfolio approach that support the inefficient market hypothesis. On the contrary, buy-and-hold method was found to be significant supporting that the Malaysian stock market is semi-strong efficient

Dynamic capital structure in China: Determinants and adjustment speed

This paper examines the determinants and adjustment speed of capital structure by using a dynamic panel data, two-step system GMM estimator with the latest data covering the years 2008-2013 in China. The results present a significant difference in the determinants and adjustment speed of capital structure compared to past studies. The authors find that firms adjust debt ratio towards leverage targets at speeds of 37% per annum, yielding a half-life of 1.52 years. Next, it is found that the profitability is no longer a core determinant of capital structure in Chinese listed firms. In addition, the results point out that the capital structure decision is not only affected by financial variables, but is also significantly influenced by human resource factors

Determinants of capital structure: A comparison between industrial and consumer sectors in China

Manuscript type: Research paper Research aims: This paper examines the effects of firm’s financial, macroeconomic, and human resource variables in determining the capital structure decisions of firms in the industrial and consumer sectors of China. It also examines the differences between the total debt and long term debt of these two sectors. Design/ Methodology/ Approach: This study analyses data from Chinese A-share firms of the consumer and industrial sectors listed in the Shanghai and Shenzen stock market exchange from the year 2008 to 2013. Dynamic panel data and the system Generalized Method of the Moments (system GMM) were employed to examine the speed of adjustment and the relationship between firm’s financial, macroeconomic, and human resource variables with two proxies of capital structure namely: total debt and long term debt. Research findings: The results indicate that the adjustment speed of capital structure decision, for both the total debt and long term debt are faster in consumer firms than they are in industrial firms. The long term debt of industrial firms is insignificantly influenced by the firm’s financial variables except for firm’s size. In consumer firms, it is noted that firm’s financial variables play an important role in explaining the leverage variations. The results also indicate that macroeconomic factors are not significant determinants of capital structure decisions, especially for industrial firms. In addition, employment size and employment in industry have significant positive impact on total debt in consumer firms while employment size and employment productivity have a negative influence on the long term debt in industrial firms. Lastly, there is a significant difference between consumer firms and industrial firms, in term of the type of debt they carry. Theoretical contributions/ Originality: This study expands on previous work done on indirect effects of sectorial and industry level factors on the relationship between leverage and firm’s specific determinants of capital structure, in developing economies. It extends the applicability of capital structure theories that are highly dependent on the types of leverage despite sector behavioural issues. Practitioner/ Policy implications: This paper provides insights on the variables which explain the level and types of leverage of Chinese firms in both the consumer and industrial sectors. Research limitations/ Implications: Future studies should consider other proxies for capital structures such as market value of total, long and short term debts. Future studies should also investigate firms in other sectors

Chaotic Behaviour, Sensitivity Assessment, and New Analytical Investigation to Find Novel Optical Soliton Solutions of M-Fractional Kuralay-II Equation

The implementation of chaotic behavior and a sensitivity assessment of the newly developed M-fractional Kuralay-II equation are the foremost objectives of the present study. This equation has significant possibilities in control systems, electrical circuits, seismic wave propagation, economic dynamics, groundwater flow, image and signal denoising, complex biological systems, optical fibers, plasma physics, population dynamics, and modern technology. These applications demonstrate the versatility and advantageousness of the stated model for complex systems in various scientific and engineering disciplines. One more essential objective of the present research is to find closed-form wave solutions of the assumed equation based on the (G′G′+G+A)-expansion approach. The results achieved are in exponential, rational, and trigonometric function forms. Our findings are more novel and also have an exclusive feature in comparison with the existing results. These discoveries substantially expand our understanding of nonlinear wave dynamics in various physical contexts in industry. By simply selecting suitable values of the parameters, three-dimensional (3D), contour, and two-dimensional (2D) illustrations are produced displaying the diagrammatic propagation of the constructed wave solutions that yield the singular periodic, anti-kink, kink, and singular kink-shape solitons. Future improvements to the model may also benefit from what has been obtained as well. The various assortments of solutions are provided by the described procedure. Finally, the framework proposed in this investigation addresses additional fractional nonlinear partial differential equations in mathematical physics and engineering with excellent reliability, quality of effectiveness, and ease of application