Business Administration

This study explores the interactions between selected macroeconomic variables and stock prices for the case of Malaysia in a VAR framework. Some conventional econometric techniques are applied along with a battery of complementary tests to trace out both short and long run dynamics. Upon testing a vector error correction model, we show that changes in Malaysian stock market index do perform a cointegrating relationship with changes in money supply, interest rate, exchange rate, reserves and industrial production index. Our lag exclusion test shows that all six variables contribute significantly to the co-integrating relationship. This shows that the Malaysian stock market is sensitive to changes in the macroeconomic variables. Furthermore, based on the variance decomposition analysis, this paper highlights that Malaysian stock market has stronger dynamic interaction with reserves and industrial production index as compared to money supply, interest rate, and exchange rate.

This study addresses the linkages between lending structure and market risk exposure. The influence of lending structure is analysed by four measures: the real estate lending, the specialisation index, the short-term lending stability, and the medium-term lending stability. Our findings show that lending structure to some extent affects the market risk exposure to some extend. At the same time, listed bank holding companies showed higher levels of market risk during and after the 1997 Asian financial crisis. Meanwhile, the desired effect of bank mergers in terms of reducing market risk exposure did not materialise in this study. Thus, the findings of this study posits at least two implications; (1) policy makers should react accordingly in the decision-making process towards achieving the expected result of the monetary policy transmission mechanism, and (2) banks and investors should account the impact of lending structures in addition to the significance effect of loan expansion and management efficiency when determining market risk exposure of bank holding companies.

This paper analyses the efficiency and financial performance using CAMEL-type variables, three years before and after the consolidation programme for the domestic banking sector initiated by Bank Negara as a result of the 1997 financial crisis. The results suggest ...

This study examines the stock market as a predictor of the economic activity in Malaysia and its sensitivity to different stock market conditions. In doing so, we employ the Johansen cointegration, variance decomposition and the Autoregressive Distributed Lags bound ...

This paper examines the spill-over effect of US sub-prime crisis on ASEAN-5 stock market returns. Given the stationarity of the variables at level, we estimate the impact of stock returns in response to the US financial conditions using pooled, fixed effect, random effect and ...

The student-centered learning (SCL) approach is an approach to education that focuses on learners and their needs, rather than relying upon the input of the teacher's. The present paper examines how the SCL approach is integrated as a learner-centered paradigm into finance courses offered at a business school in a research university in Malaysia. Specifically, this paper identifies how a learner-centered environment is integrated into teaching methods, learning activities and evaluation tools. Since the adoption of the SCL approach is partly to cater for the needs of the research university, the analysis of the courses is supported with responses from the respective lecturers. This study finds that the lecturers of the five courses examined have used active/interactive learning and group project approaches as standard teaching methods under the SCL approach which includes projects, class discussion and presentation. Alongside these standard methods, some of the courses use additional methods under the SCL approach, including real life experiential learning and case studies. For example, students of the Investment and Portfolio Analysis course are exposed to the real world investment decision making by investing funds in selected stocks listed on Bursa Malaysia. In terms of course evaluations, the courses place greater weight on continuous assessment based on group projects and presentations, while reduce the emphasis on examinations. Overall, implementing the SCL approach requires a careful design of the learning process, which includes the classroom setting; flexibility of the curriculum; teaching methods; evaluation policies; and course content. In general, the study demonstrates that SCL has great potential to function as an effective learning tool in an environment where the labor market demands generically skilled job candidates and in which universities are demanding further resources to be devoted to efforts relating to research and publications.

This study examines the impact of financing structure on Islamic banks' credit risk exposure via four measures: 1) real estate financing; 2) financing specialization; 3) short-term financing structure stability; and 4) medium-term financing structure stability. While controlling the bank-specific variables, our findings indicate that real estate financing and financing structure stability to some extent influence credit risk exposure. However, the significant effects disappear when we incorporated the macroeconomic variables in the framework. This implies that the impact of financing structure on credit risk exposure may be misleading when one ignores the role of macroeconomic fundamentals. Hence, it is hoped that our findings will help the policy makers as well as practitioners do make accurate judgements in the decision making process.

This study examines the impact of oil price volatility on firm performance in the context of an emerging market, Malaysia. The effect of crude oil price on the performance is examined for the period of January 1986 to December 2011 using GARCH and EGARCH models reflecting the evaluation on volatility and asymmetric effects. Results indicate the significant effect of oil price volatility on stock market volatility and also the asymmetric effects. For policy makers, the findings help to clarify the dilemma of whether the government should subsidize or totally depend on global oil prices in ensuring the sustainability and competitiveness of Malaysian companies. In addition, the results may assist businessmen in managing cost structures in the event of rising oil prices in relation to both short term and long term planning and provide investors with a better picture of the exposure to oil price risks when investing in Malaysian companies.

yang bersifat jangka panjang (setahun). Analisis ini meliputi dua fasa pengujian: 1) skor kecekapan kos dianggarkan menggunakan Analisis Sempadan Stokastik (Stochastic Frontier Analysis-SFA). 2) Hubungan antara kecekapan kos tersebut dan risiko kecairan diuji menggunakan kaedah regresi panel statik. Keputusan kajian menunjukkan bahawa kecekapan kos kedua-dua sistem perbankan tidak mempunyai hubungan signifikan dengan LCR, manakala berhubungan signifikan yang negatif dengan NSFR bagi perbankan Islam dan konvensional. Ini bermaksud semakin tinggi ketidakcekapan kos semakin rendah kecairan, lalu semakin tinggi risiko kecairan dalam jangka panjang. Oleh itu, pengurangan kos dapat mengurangkan risiko kecairan bank bagi jangka panjang. Implikasinya, kecekapan kos bank perlu diambil kira oleh penggubal dasar Negara dan pihak pengurusan bank dalam merangka pengurusan risiko kecairan bagi memastikan kelestarian sistem perbankan di Malaysia.

Evidence thus far suggests fair value accounting poses risk and affects firms' returns in some ways. This research, on a sample of Asian banks, improves the understanding of the information risk effect of fair value accounting by examining the moderating role of risk disclosure in the relationship between fair value accounting and the cost of equity capital. The results from a generalised method of moments on dynamic panel data analysis, show that risk disclosure mitigates the asymmetric information problem. Thus the findings contribute towards the standard setters' effort in improving the practice of fair value accounting, and suggest that there are benefits in mandating disclosure especially for banks.

This study examines the relationship between financing structure and bank liquidity risk. We compare the findings between Islamic and conventional banks for the case of Malaysia. We adopt four measures to represent financing structure; namely 1) real estate financing, 2) financing concentration, 3) stability of short-term financing structure and 4) stability of medium-term financing structure. Two BASEL III liquidity risk measures are tested; namely, liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) to measure short- and long-term liquidity risk, respectively. Based on panel data regression comprising 27 conventional and 17 Islamic banks from 1994 to 2014, our findings show that real estate financing and stability of short-term financing structure for Islamic banks are positively related to both liquidity risk measures. This implies that an increasing number of real estate financing and a stable short-term financing structure may increase Islamic banks’ short- a...

Money laundering is a global threat to financial institutions especially the banking industry since it may weaken and expose the institutions to serious risks such as operational, legal and reputational risks. Against this background, the objectives of the study are to analyse the current practice on the prevention of money laundering in selected banks in Malaysia, to investigate the barriers to the implementation of effective Anti-Money Laundering (AML) regulations and to identify the ways to improve the implementation of AML in Malaysia. The study was conducted using qualitative method via interviews with 6 respondents from 6 Islamic & Conventional banks in Malaysia. The preliminary findings showed that the banking institutions' current practice is fully complying with AML regulations under the AMLA 2001. The findings also demonstrated that the barriers to effective implementation of AML regulations are in line with those of previous study, which are lack of expert staff as the top factor together with an additional factor, which is lack of customers' education and awareness on money laundering. Hence, to improve the implementation of AML in Malaysia, this study suggested to firstly strengthen the collaboration with government and relevant authorities to ensure strong enforcement action is taken against the criminals. Secondly, collaboration of BNM with banks and local media to increase public awareness and education on financial crime. Thirdly, to invest on employee training, upgrading system management as well as sufficient resources in compliance unit and finally to intensify the "Three Lines of Defence" in Bank Risk Management.

The study of human resource has become a crucial topic in understanding the determinants of operational risk. Given the various sources of operational risk, losses resulting from staff performance seemed to be the major cause as employees are the key players who manage the processes and systems of undesired events. This study explored the influence of staff performance attributes toward operational risk management, with a focus on 'people risk.' The study was conducted using qualitative approach via face-to-face and telephone interviews with 14 respondents from 7 Islamic banks in Malaysia. Our preliminary finding showed that training, education, experience and compensation lead toward better management of 'people risk'. Hence, a clear understanding of the factors affecting 'people risk' would help ensuring an effective and successful strategy in managing human resources especially in developing the operational risk management framework for the Islamic banking institutions.

ABSTRAK Kebelakangan ini, Lembaga Tabung Haji (TH) telah terpalit dengan pelbagai tohmahan yang telah menyebabkan reputasi TH dipertikaikan. Hal ini telah mendapat reaksi daripada pendeposit sehingga menyebabkan kepercayaan dan kesetiaan pendeposit tergugat dan mereka mula mengeluarkan simpanan. Kajian ini bertujuan melihat faktor penentu kepercayaan dan kesetiaan dan melihat sama ada faktor kepercayaan dan kesetiaan bertindak sebagai faktor penengah (mediating factor) kepada risiko kecairan TH. Kajian ini menggunakan kaedah pensampelan tujuan (purposive sampling) dan sebanyak 200 orang responden menjawab soal selidik secara atas talian dan secara langsung. Analisis menggunakan teknik PLS-SEM mendapati kepercayaan bertindak sebagai faktor penengah hubungan antara maklumat kewangan, jaminan deposit, kualiti perkhidmatan dan imej dengan risiko kecairan. Selain itu, kesetiaan bertindak sebagai faktor penengah hubungan antara kualiti perkhidmatan, kepuasan pelanggan, dan imej dengan risiko kecairan. Oleh itu, ketelusan tadbir urus korporat perlu dititikberatkan untuk memperbaiki segala aspek yang sepatutnya dan dalam masa yang sama mengembalikan semula kepercayaan dan kesetiaan para pendeposit. Hasil kajian ini diharapkan dapat membantu pengurusan TH terutamanya dan kerajaan umumnya untuk mengambil tindakan yang sewajarnya dalam mengurus risiko kecairan bagi mengekalkan kedudukan TH sebagai institusi kewangan Islam yang kukuh pada masa hadapan Kata kunci: Kepercayaan; kesetiaan; risiko kecairan; Tabung Haji ABSTRACT Recently Lembaga Tabung Haji (TH) has been negatively accused from various aspects which may tarnish its reputation. This scenario receives bad reaction from depositors, reducing their trust and loyalty, which leads to withdrawal of deposits. This study aims to identify factors that influence the trust and loyalty of TH besides capturing the trust and loyalty traits of depositors as mediating factors of liquidity risk. This study adopts purposive sampling method and a total of 200 respondents respond to the questionnaires via online and enumerator service. Analysis using PLS-SEM technique revealed that trust mediates the relationship between financial information, security deposit, service quality and image with liquidity risk. Besides that, loyalty mediates the relationship between service quality, customer satisfaction and image with liquidity risk. Therefore, good corporate governance has to be enhanced to gain back the depositors' trust. Results from this study are expected to assist the management of TH as well as the government to properly manage liquidity risk in ensuring the sustainability of TH in future.

Since the global financial crisis, banking supervisors have realised that bank market risk is crucial to banking stability. Guided by the Financial Sector Master Plan, Bank Negara Malaysia has implemented risk-focused and pre-emptive regulation and supervision to control the market risk exposure. This paper examines the market risk and effects of cost and profit efficiencies on market risk using all listed banks in Malaysia for the 2000-2015 period. Using the Expected Shortfall and Stochastic Frontier Analysis, this paper estimates the cost and profit efficiencies and analyses the effects on market risk. The results show that the bank market risk exposure decreases and both cost and profit efficiencies affect market risk. Bank managers and supervisors could apply the results as a basis for formulating business strategy and developing banking policy.

This study addresses the linkages between lending structure and bank risk exposures via the Capital Asset Pricing Model (CAPM). Based on the 3-factor CAPM, five risk measures are examined; namely, the market, interest rate, exchange rate, total and unsystematic risk exposure. The influence of lending structure is analysed via four measures, the real estate lending, the specialisation index, the short-term lending stability, and the medium-term lending stability. Our findings show that the lending structure affects the market, interest rate, and unsystematic risk exposures. The stability of lending structure in both the short-term and medium-term period positively influence the market and interest rate risk exposure. On the other hand, the medium-term lending structure stability negatively affects the unsystematic risk exposure. Thus, the policy makers, bankers, and investors should not ignore the significant role of the lending structure when developing a strategic risk management framework. ABSTRAK Kajian ini melihat hubungan antara struktur pinjaman dengan risiko bank menggunakan pendekatan Model Peletakan Harga Aset Modal (CAPM). Berdasarkan 3-faktor CAPM, lima jenis risiko telah dikaji; iaitu, risiko pasaran, risiko kadar faedah, risiko kadar tukaran asing, risiko sistematik dan risiko keseluruhan. Kesan pengaruh struktur pinjaman terhadap risiko dikaji menggunakan empat ukuran, iaitu pinjaman kepada sektor hartanah, indeks konsentrasi, kestabilan struktur pinjaman bagi jangka pendek dan kestabilan struktur pinjaman bagi jangka masa sederhana. Hasil kajian mendapati bahawa struktur pinjaman mempengaruhi risiko pasaran, risiko kadar faedah dan risiko sistematik. Kestabilan struktur pinjaman bagi jangka pendek dan jangka sederhana mempengaruhi risiko pasaran dan risiko kadar faedah secara positif. Manakala, kestabilan struktur pinjaman jangka sederhana mempengaruhi risiko sistematik secara songsang. Oleh itu, para penggubal polisi, pengurus sektor perbankan dan pelabur seharusnya mengambil kira kepentingan peranan struktur pinjaman dalam membangunkan kerangka strategik bagi pengurusan risiko bank.

Early Warning System (EWS) is a system that tries to predict the probability of crises using environmental factors. This study seeks to develop an EWS for the probability of systemic banking crises in East Asian countries by using a logit model taking into account a wide range of political and economic factors. Results reveal that short-term debt and exchange rate depreciation may trigger speculative attacks during political instability, economic slowdown, and inefficient regulatory environments. Policymakers and regulators may be able to prevent crises by stabilizing political and economic conditions. Furthermore, results indicate that government instability, corruption, high short-term debt, unstable monetary and fiscal policies do not only reduce investors' confidence but also prevent effective crisis prevention strategies. Therefore, by adopting the EWS the government would be able to monitor environmental changes causing crises.

Disruptive innovation is related to financial technology and known as FinTech. It includes  design, delivery, and provider of financial investment services such as payments, real estate, investment, insurance/ takaful, deposits, financing, banking, saving and capital market. This study is about Adoption of Financial Technology (FinTech) in mutual fund/ unit trust investment among Malaysians: Unified Theory of Acceptance and Use of Technology (UTAUT). The study aims to identify the level of financial technology consumption in mutual fund/ unit trust among investors in Malaysia. The objectives of this research are: 1) to determine the level of awareness on FinTech application in mutual fund/ unit trust investment; 2) to examine the adoption of FinTech  in mutual fund/ unit trust investment. The objectives will explore on how FinTech changes the customers in terms of to what extent Malaysians have adopted FinTech so far. The research methodology in an adoption of FinTech service in mut...

Waqf is known as an endowment made by Muslims to charitable causes such as for education or religious purposes. Waqf is very important for the development of the Islamic ummah, and it is one of the practices recommended in Islam. However, there is no framework of Waqf management being developed in order to ensure that different types of waqf is managed efficiently. Therefore, this study would like to explore the Waqf management practices in Malaysia and propose a framework for Waqf Management. The study is conducted using qualitative approach which involved semi-structured interviews with the managers and employees of Waqf Johor Unit (UWJ) in Johor and the Waqf Selangor Corporation (PWS) in Selangor, Malaysia. The findings identified three important components that are crucial for efficient Waqf management, research management, investment management and property management. The existence of these components will enable the Waqf institutions to manage waqf effectively so that it will play an effective charitable role in developing the Islamic ummah. These findings will assist the policy makers and the management of waqf institutions to strategize Waqf as a driver for the social and economic development in Malaysia.

The finance-growth nexus is gaining credence among researchers. Growing research interest in developing evidences for different economic sectors has ignited this study to examine the topic in the agricultural sector for Malaysia. The analysis focuses on the palm oil industry using data for the period 1981 to 2017 using the Autoregressive Distributed Lagged (ARDL-bounds) approach. Financial development measures financial depth, accessibility, efficiency, and stability. Other variables include production factors such as land, labor, and capital. Findings/Originality: The findings show that the depth of the financial market has a positive impact on palm oil industry performance both in the short run and long run, though the depth of the financial institutions only takes effect in the long run. Meanwhile the financial accessibility, efficiency, and stability have no significant effect on the productivity of the industry. It implies that the equity market development is more relevant to affect the palm oil industry compared to credit market development.