1,720,992 research outputs found
Ethical screening and financial performance : the case\ud of Islamic equity funds
No full textWhether ethical screening affects portfolio\ud
performance is an important question that is yet to be\ud
settled in the literature. This paper aims to shed further\ud
light on this question by examining the performance of a\ud
large global sample of Islamic equity funds (IEFs) from\ud
1984 to 2010. We find that IEFs underperform conventional\ud
funds by an average of 40 basis points per month,\ud
consistent with the underperformance hypothesis. In line\ud
with popular media claims that Islamic funds are a safer\ud
investment, IEFs outperformed conventional funds during\ud
the recent banking crisis. However, we find no such outperformance\ud
for other crises or high volatility periods.\ud
Based on fund holdings-based data, we provide evidence of\ud
a negative curvilinear relation between fund performance\ud
and ethical screening intensity, consistent with a return\ud
trade-off to being more ethical
Analyst coverage and IPO management forecasts
No full textGiven the all-importance of analyst coverage for IPO firms, we examine the interaction between the initiation of analyst coverage and management forecast disclosure in IPO prospectuses. We find that IPO firms that provide a prospectus forecast are more likely to receive coverage (and earlier), particularly from lower quality analysts. The depth of coverage, measured by the number of analysts issuing a recommendation on the firm, is also greater for forecasters. These results hold after controlling for potential endogeneity due to simultaneity in management decision to provide a forecast and analysts' decision to cover the firm. Further analyses show that reputation concerns matter to analyst coverage decisions — conditional on firms providing a prospectus forecast, the likelihood of receiving coverage decreases with the magnitude of the absolute management forecast error. There is evidence of quid pro quo where the analyst working for the underwriter of the IPO aligns her forecast with the management forecast more than unaffiliated analysts. Insofar as management forecasts are important to coverage decision and analyst coverage is valuable, our research has important implications for strengthening the safe harbour provision for prospectus forecasts in litigious environments such as that in the U.S
Accuracy of analysts' earnings forecasts: evidence from mergers and acquisitions in Australia
No full text
Agency costs and corporate sukuk issuance
No full textOnce a niche financial instrument, sukuk have become a mainstream alternative source of capital for corporations. This paper examines the motivations for firms to finance their investment opportunities using sukuk rather than conventional bonds, and their choice of sukuk structure. We test the agency implications of sukuk design for a sample of 230 corporate bonds issued in Malaysia from 2001 to 2014. Our results are consistent with the agency cost mitigation of free cash flow and underinvestment providing a core rationale for firms’ adoption of such a complex asset-based financing. Our results are robust to sample selection bias, a wide array of controls, and alternative specifications
Corporate ownership, corporate governance reform and timeliness of earnings : Malaysian evidence
No full textThis paper provides the first evidence showing that ownership concentration and the identity of the largest shareholder matter to the timeliness of corporate earnings, measured by a stock price-based timeliness metric and the reporting lag. Using panel data of 1276 Malaysian firms from 1996 to 2009, we find a non-linear relationship between concentrated ownership, measured by the largest shareholding in a firm, and the reporting lag but not the timeliness of price discovery. Although firms with government as the largest shareholder and political connections have a significantly shorter reporting lag, only the former are timelier in price discovery. Firms with family and foreigners as the largest shareholder however are less timely in price discovery. While the reporting lag is shorter in the period after the integration of the Malaysian Code of Corporate Governance (MCCG) into Bursa listing rules, its impact on the timeliness of price discovery is mostly immaterial
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