Calvin Cheong | Sunway University (original) (raw)

Papers by Calvin Cheong

Asia-pacific Journal of Business Administration, May 20, 2022

This paper has the objective of studying the Islamic bond market in the London Stock Exchange (LS... more This paper has the objective of studying the Islamic bond market in the London Stock Exchange (LSE) which surprisingly is a latecomer, 21 years after the first Islamic bond that was listed in 1990. London took time to assess the market debut although it is the Bank of England that paved the way for the level-playing-field regulations to create Islamic banking. The Shariah-compliant Islamic bonds known as sukuk are traded in 23 plus markets and there are 2,340 such faith-based issues as at 2021. The total funds raised to-date in such exchange-traded Islamic bond exchanges over 31 years is worth US$526 billion with an average issue size of US$220 million each globally. London has raised US$50 billion with some 125 issues during its ten-year history. With perhaps the fastest growth rate among all exchanges, LSE chalked a growth rate of 56% per year, an extraordinary achievement with an average issue size 2 times bigger than the world average. In contrast, the global sukuk market growth...

This paper reports an assessment of supply-demand side economics of hotel and property sectors, w... more This paper reports an assessment of supply-demand side economics of hotel and property sectors, while it also examines the pricing behavior of the real estate sector in Malaysia. First economic fact about the hotel sector is that it has been carefully developed over several decades, and forms an important destination point for international travelers attracting about 26 million visitors with demands ranging from simple hotel services to the most exotic private chalets. This sector has gone through a decline since 2017 and has been made worse by the Covid Pandemic. Analyses of the property sector provide interesting, unexpected finding that price increases in residential units have kept pace with inflation in the country, and that further localizing production of input materials, supply of more land regulatory consolidation would help the industry. Nonetheless, the supply of built units in recent years falls short of national policy aim to provide affordable housing because supply is...

SSRN Electronic Journal, 2020

Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased vol... more Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased volatilities in various financial markets. Not many however have sought to investigate why. With anecdotal evidence pointing to investors earning abnormal returns despite the pandemic, this paper sought to determine whether markets – for whatever reason – were overreacting to the pandemic. Using a sample of the largest 3,000 companies across 15 countries, we found evidence that markets were overreacting to various COVID-19 events. Specifically, we found that markets showed strong signs of reversal in response to negative events (e.g. lockdowns, confirmed cases, deaths). Positive events (e.g. vaccine development, recoveries) did not elicit a similar response. Our results suggest that the volatilities and negative returns during the sample period may be driven by non-COVID factors. This will have profound implications for future COVID-financial markets research and government policy as it redirects attention to individual countries rather than adopting a “global” approach to research or policy-setting.

Research in International Business and Finance, 2020

Abstract Despite the popularity of Islamic Finance, the effects of Shariah-compliance on non-fina... more Abstract Despite the popularity of Islamic Finance, the effects of Shariah-compliance on non-financial firm operations have never been studied. Shariah-compliance requirements presents unique conditions to examine how firms perform under restricted conditions. This paper seeks to examine the effects of Shariah-compliance on the risk and resilience of non-financial firms. Using a dynamic panel system GMM and a host of firm-specific attributes, and a global sample of 2,160 firms across six geographic regions, the results suggest that Shariah-compliant firms have lower firm risk as measured by total and idiosyncratic risk, and greater firm resilience as measured by the percent deviation from the maximum values of sales, cost of goods sold, operating expenses, and share price. These effects are more profound in the years following the U.S. subprime crisis. Results also show socio-cultural norms to have a moderating effect. Further testing shows firms face stiff penalties for losing their Shariah-compliance status. This paper is the first to study the effects of Shariah-compliance on non-financial firm operations on a global scale. This paper also contributes to the capital structure and corporate governance literature as it provides evidence that suggest resource restraints may be beneficial for a firm. The findings of this paper also provide significant value to firms looking to capitalize on the 1.8 billion-strong Muslim market with further insight on the intricacies of Shariah-compliance.

International Journal of Managerial Finance, 2020

PurposeThis study investigates the effects of credit access and tax structures on the performance... more PurposeThis study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia.Design/methodology/approachThis study uses the dynamic panel system generalized method of moments, controlling for firm-specific as well as macroeconomic effectsFindingsThe paper finds that (1) debt funding is not conducive to SME performance; (2) access to non-bank credit sources and tax incentives support SME performance by lowering opportunity costs of riskier projects; (3) existing tax structures in Malaysia inhibit SME growth and encourage manipulation of accounts; and (4) investors in Malaysia prefer SMEs that are more conservative in their accounting and taxation practices.Research limitations/implicationsAccess to Malaysian SME data is restricted. Although robust methods are used, there is a chance that different conclusions may arise with a much larger sample.Practical implicationsThe findings provide clear direction in the discussion and enact...

The Journal of Risk Finance, 2019

Purpose This study aims to examine the properties of four major cryptocurrencies and how they can... more Purpose This study aims to examine the properties of four major cryptocurrencies and how they can be used as a simpler alternative mode of hedging foreign exchange (FX) risks as compared to existing mainstream financial risk management techniques. Design/methodology/approach This study uses a combination of visual data representations and the classic Fama and Macbeth (1973) two-pass procedure regressions. Findings The findings show that cryptocurrencies can be a more effective hedge against FX risks as compared to other common hedging instruments and/or techniques such as gold or a diversified currency portfolio. Research limitations/implications The conclusions were arrived at based only on a small group of cryptocurrency, i.e. Bitcoin, Ethereum, Litecoin and Ripple. Other cryptocurrencies such as Dogecoin or ZCash might exhibit different properties. Practical implications Cryptocurrencies can be cost-effective and cost-efficient instruments that provide a solid hedge for investors...

Managerial Finance, 2018

Purpose The purpose of this paper is to investigate the ability of the Islamic gold dinar to hedg... more Purpose The purpose of this paper is to investigate the ability of the Islamic gold dinar to hedge against two well-established foreign exchange (FX) risk factors namely, the dollar risk factor and global FX volatility innovations. Design/methodology/approach The paper uses a combination of the Markowitz (1952) portfolio optimization, visual data representations and the classic Fama-Macbeth (1973) two-pass procedure regressions. Findings The findings show that the Islamic gold dinar can serve as a hedge against market volatility, outperforms a diversified currency portfolio, and through its inclusions into the diversified currency portfolio, improve said portfolio’s ability to hedge against market volatility. Research limitations/implications Due to the spread of the sample, country-specific factors could not be taken into account. Practical implications The Islamic gold dinar is a cost-efficient, cost-effective, and Shariah-compliant instrument that provides a solid hedge for inves...

Asian Journal of Finance & Accounting, 2019

Bank failures are costly to customers and the wider market. Prevention is always better than cure... more Bank failures are costly to customers and the wider market. Prevention is always better than cure but in light of recent economic downturns, it has become increasingly difficult for regulators to allocate more resources towards in-depth monitoring of banking practices. In this paper, we construct a tool that is able to predict bank failures ahead of time with reasonable accuracy. Through a logistic regression on a matched sample of 536 failed and non-failed US banks, we determine the financial indicators that most accurately predicts bank failure. From the regression, we construct a Bank Health Index that assesses a bank’s propensity to failure. In-sample and out-of-sample tests show that our model is about 90% accurate two years prior to failure, and 95% accurate the year before failure. The accuracy and efficiency of the model and index provides a more efficient and effective tool for assessing a bank’s propensity to failure besides requiring far less resources. With these methods...

Research in International Business and Finance, 2017

Investors and financial markets have been a neglected stakeholder group in studies on a firm's mo... more Investors and financial markets have been a neglected stakeholder group in studies on a firm's motivations to be socially and environmentally responsible. Despite being a strong driving force behind firm value, no study has investigated the influence of market and investor sentiments on CSR behaviour. Using a global sample, we investigate the effects of market and investor sentiments on firm CSR performance. We find negative market and investor sentiments in the prior year motivate firms to improve their CSR performance in the next year. We also find the magnitude of improvement in CSR performance differs not only by country, but by CSR sub-category as well. These findings imply that a firm's motivation to improve its CSR performance is reactionary, rather than being driven by altruism. Regulators and proponents of CSR should thus seek to persuade investors and financial markets to put pressure on firms to further advance the CSR agenda.

Research in International Business and Finance, 2017

The Chinese Yuan or Renminbi has not been given due attention in the literature despite its impor... more The Chinese Yuan or Renminbi has not been given due attention in the literature despite its importance in providing stability in global FX markets and attaining IMF reserve currency status. Unlike other currencies, the Yuan is subject to strict monetary controls by the People's Bank of China. We explore factors that explain Yuan carry trade returns during the dollar-peg and managed float regimes by observing its response to the dollar risk factor, global FX volatility innovations and, liquidity. Using the traditional Fama and Macbeth (1973) two-pass ordinary least squares regression, we find that the effects of the dollar risk factor, global FX volatility innovations and liquidity on Yuan carry trade returns: (1) are unlike those on other currencies; (2) vary monotonically as the maturity of the carry trade position increases; and (3) are affected by the exchange rate regime in force. Our results suggest that short-term Yuan carry trade portfolios may serve as a hedge against market volatility. 1-year positions are far more resilient and deliver substantial returns especially during periods of low market volatility. Our results also exhibit the Yuan's dependence on the dollar in its valuation besides the transfer of wealth between U.S. equity markets and dollar-denominated assets to the Yuan and Yuan-denominated assets.

SSRN Electronic Journal, 2012

This paper aims to identify the key factors that have contributed to the existence and the growth... more This paper aims to identify the key factors that have contributed to the existence and the growth of Arrahnu (Islamic pawn broking scheme) in Malaysia. Based on the previous studies and cost of borrowing analysis, this paper found that the need for interest (riba) free, transparent transaction and low cost shortterm cash borrowing scheme is much preferred by the pawning customers. Besides that the cost of borrowing in this scheme is the lowest compared to the conventional pawn broking scheme. However, the Ar-rahnu scheme needs to address central issues such as the marketing, public awareness and the locations of this scheme.

SSRN Electronic Journal, 2012

This study examines the viability of the Islamic Gold Dinar as a hedging tool against currency ex... more This study examines the viability of the Islamic Gold Dinar as a hedging tool against currency exchange rate risk. Using the Auto Covariance Ratio the paper attempts to identify the percentage of time gold value is stable in the currency exchange market on a daily basis for a period of 12 years against the US Dollar and Malaysian Ringgit. This study also examines the volatility of gold prices relative to a host of other currencies using conventional standard deviation. Our findings show that the value of gold is more stable than the US dollar and Malaysian Ringgit over the sample period. However our findings also reveal that the volatility of gold prices itself has been progressively rising since 2003. Further tests reveal that the volatility of gold prices are highly correlated with the volatility of other national currencies. We conclude that the Islamic Gold Dinar cannot as yet be used as a hedging tool for exchange rate risks.

Journal of Asia-Pacific Business, 2014

The authors investigate the relationship between board ethnic diversity, ethnicity and market, an... more The authors investigate the relationship between board ethnic diversity, ethnicity and market, and book measures of firm financial performance using Malaysian data. This represents a departure from prior studies that focused on White countries whose people remain culturally indistinct. Ethnic diversity is measured by the Herfindahl-Hirschman Index; ethnicity is the largest representation of a single race. Controlling for firm- and board-specific attributes, the authors find a significant positive relationship between ethnic diversity and firm financial performance and that financial performance of companies differ between ethnicities. The results suggest that despite modernization and homogenization, corporate Malaysia is still divided along racial lines.

Asian Journal of Finance & Accounting, 2018

This paper studies the influence of religiosity on corporate risk-taking. The study uses unique m... more This paper studies the influence of religiosity on corporate risk-taking. The study uses unique micro-level data on religious devotion and distinguishes between manager religiosity, firm intrinsic religiosity, firm extrinsic religiosity, and social capital. Analysis shows that manager religiosity is associated with lower risk-taking. Firm intrinsic religiosity however, moderates this association. Further analysis shows that managers of Islamic firms are more likely to make risky decisions as compared to managers of other firms due to socio-religious pressure. Manager religiosity is also associated with lower firm equity risk. The results also suggest that strong external monitoring weakens the negative relationship between religiosity and risk-taking. This study shows how religious managers may be a double-edged sword. Religious managers are not risk-takers but are susceptible to social pressure. They are however, also more well-adjusted to a changing environment which inspires conf...

Social Science Research Network, 2021

Internationalization contributes to economic growth and as a result, many nations seek to encoura... more Internationalization contributes to economic growth and as a result, many nations seek to encourage it by liberalizing domestic business environments and standardizing trade policies with other nations. However, in their attempt to standardize policy, some nations – through regulatory authority – (un)willingly adopt a heavy-handed approach, creating institutional pressures that stifle firm-level decisions, to align firm interests with those of the state. Inconsistencies in the framing and enforcement of laws and standards meanwhile, create institutional complexities. Both institutional pressures and complexities force firms to devise strategic responses that ultimately result in either an (un)intentional decoupling, or (in)voluntary de-internationalization. In this chapter, we discuss these concepts in the context of Sino-American trade relations and the intellectual property rights (IPRs) issues, before providing a conceptual framework that will help form the basis of further analy...

Pacific Rim Property Research Journal

Asian Journal of Finance & Accounting

This paper empirically investigates what has been claimed in the literature; that there are no si... more This paper empirically investigates what has been claimed in the literature; that there are no significant differences between the Islamic and Western schools of business ethics. A proxy for the Western school is corporate social responsibility (CSR) while in the Islamic school, a reasonable approximation would be Shariah-compliance (SC). But because financial performance is not the main priority in CSR and SC, this study examines the effects CSR and SC has on firm resilience and firm risk. The regression estimates using an emerging market sample show that both CSR and SC improves firm resilience besides reducing firm risk in the following year. The findings empirically validate the claims made in the literature; that business ethics, Islamic or otherwise, are similar in substance and form. By empirically examining this claim, this study paves the way for a convergence of values and practices besides fostering greater unity between cultures.

Asian Journal of Finance & Accounting

This paper examines the factors that drive the recent exponential growth in Malaysian house price... more This paper examines the factors that drive the recent exponential growth in Malaysian house prices. We first construct a sentiment index for the housing market in Malaysia guided by the methods employed by Baker and Wurgler (2006). Preliminary analyses of our bias-free sentiment index indicate a strong correlation with overall market confidence which attests to the reliability of our index. The results also show contemporaneous sentiment to strongly influence future housing market returns especially in the short-term. Contrary to the literature, our results suggest that it is property developer behaviour that drive sentiments and property prices. The study contributes to the literature by providing an easily generalizable method of constructing a housing market sentiment index in other countries that holistically accounts for essential housing market elements that are otherwise ignored in confidence indices. This study also contributes to practice as it provides evidence to policy-m...

SSRN Electronic Journal, 2020

Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased vol... more Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased volatilities in various financial markets. Not many however have sought to investigate why. With anecdotal evidence pointing to investors earning abnormal returns despite the pandemic, this paper sought to determine whether markets-for whatever reason-were overreacting to the pandemic. Using a sample of the largest 3,000 companies across 15 countries, we found evidence that markets were overreacting to various COVID-19 events. Specifically, we found that markets showed strong signs of reversal in response to negative events (e.g. lockdowns, confirmed cases, deaths). Positive events (e.g. vaccine development, recoveries) did not elicit a similar response. Our results suggest that the volatilities and negative returns during the sample period may be driven by non-COVID factors. This will have profound implications for future COVID-financial markets research and government policy as it redirects attention to individual countries rather than adopting a "global" approach to research or policy-setting.

Asia-pacific Journal of Business Administration, May 20, 2022

This paper has the objective of studying the Islamic bond market in the London Stock Exchange (LS... more This paper has the objective of studying the Islamic bond market in the London Stock Exchange (LSE) which surprisingly is a latecomer, 21 years after the first Islamic bond that was listed in 1990. London took time to assess the market debut although it is the Bank of England that paved the way for the level-playing-field regulations to create Islamic banking. The Shariah-compliant Islamic bonds known as sukuk are traded in 23 plus markets and there are 2,340 such faith-based issues as at 2021. The total funds raised to-date in such exchange-traded Islamic bond exchanges over 31 years is worth US$526 billion with an average issue size of US$220 million each globally. London has raised US$50 billion with some 125 issues during its ten-year history. With perhaps the fastest growth rate among all exchanges, LSE chalked a growth rate of 56% per year, an extraordinary achievement with an average issue size 2 times bigger than the world average. In contrast, the global sukuk market growth...

This paper reports an assessment of supply-demand side economics of hotel and property sectors, w... more This paper reports an assessment of supply-demand side economics of hotel and property sectors, while it also examines the pricing behavior of the real estate sector in Malaysia. First economic fact about the hotel sector is that it has been carefully developed over several decades, and forms an important destination point for international travelers attracting about 26 million visitors with demands ranging from simple hotel services to the most exotic private chalets. This sector has gone through a decline since 2017 and has been made worse by the Covid Pandemic. Analyses of the property sector provide interesting, unexpected finding that price increases in residential units have kept pace with inflation in the country, and that further localizing production of input materials, supply of more land regulatory consolidation would help the industry. Nonetheless, the supply of built units in recent years falls short of national policy aim to provide affordable housing because supply is...

SSRN Electronic Journal, 2020

Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased vol... more Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased volatilities in various financial markets. Not many however have sought to investigate why. With anecdotal evidence pointing to investors earning abnormal returns despite the pandemic, this paper sought to determine whether markets – for whatever reason – were overreacting to the pandemic. Using a sample of the largest 3,000 companies across 15 countries, we found evidence that markets were overreacting to various COVID-19 events. Specifically, we found that markets showed strong signs of reversal in response to negative events (e.g. lockdowns, confirmed cases, deaths). Positive events (e.g. vaccine development, recoveries) did not elicit a similar response. Our results suggest that the volatilities and negative returns during the sample period may be driven by non-COVID factors. This will have profound implications for future COVID-financial markets research and government policy as it redirects attention to individual countries rather than adopting a “global” approach to research or policy-setting.

Research in International Business and Finance, 2020

Abstract Despite the popularity of Islamic Finance, the effects of Shariah-compliance on non-fina... more Abstract Despite the popularity of Islamic Finance, the effects of Shariah-compliance on non-financial firm operations have never been studied. Shariah-compliance requirements presents unique conditions to examine how firms perform under restricted conditions. This paper seeks to examine the effects of Shariah-compliance on the risk and resilience of non-financial firms. Using a dynamic panel system GMM and a host of firm-specific attributes, and a global sample of 2,160 firms across six geographic regions, the results suggest that Shariah-compliant firms have lower firm risk as measured by total and idiosyncratic risk, and greater firm resilience as measured by the percent deviation from the maximum values of sales, cost of goods sold, operating expenses, and share price. These effects are more profound in the years following the U.S. subprime crisis. Results also show socio-cultural norms to have a moderating effect. Further testing shows firms face stiff penalties for losing their Shariah-compliance status. This paper is the first to study the effects of Shariah-compliance on non-financial firm operations on a global scale. This paper also contributes to the capital structure and corporate governance literature as it provides evidence that suggest resource restraints may be beneficial for a firm. The findings of this paper also provide significant value to firms looking to capitalize on the 1.8 billion-strong Muslim market with further insight on the intricacies of Shariah-compliance.

International Journal of Managerial Finance, 2020

PurposeThis study investigates the effects of credit access and tax structures on the performance... more PurposeThis study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia.Design/methodology/approachThis study uses the dynamic panel system generalized method of moments, controlling for firm-specific as well as macroeconomic effectsFindingsThe paper finds that (1) debt funding is not conducive to SME performance; (2) access to non-bank credit sources and tax incentives support SME performance by lowering opportunity costs of riskier projects; (3) existing tax structures in Malaysia inhibit SME growth and encourage manipulation of accounts; and (4) investors in Malaysia prefer SMEs that are more conservative in their accounting and taxation practices.Research limitations/implicationsAccess to Malaysian SME data is restricted. Although robust methods are used, there is a chance that different conclusions may arise with a much larger sample.Practical implicationsThe findings provide clear direction in the discussion and enact...

The Journal of Risk Finance, 2019

Purpose This study aims to examine the properties of four major cryptocurrencies and how they can... more Purpose This study aims to examine the properties of four major cryptocurrencies and how they can be used as a simpler alternative mode of hedging foreign exchange (FX) risks as compared to existing mainstream financial risk management techniques. Design/methodology/approach This study uses a combination of visual data representations and the classic Fama and Macbeth (1973) two-pass procedure regressions. Findings The findings show that cryptocurrencies can be a more effective hedge against FX risks as compared to other common hedging instruments and/or techniques such as gold or a diversified currency portfolio. Research limitations/implications The conclusions were arrived at based only on a small group of cryptocurrency, i.e. Bitcoin, Ethereum, Litecoin and Ripple. Other cryptocurrencies such as Dogecoin or ZCash might exhibit different properties. Practical implications Cryptocurrencies can be cost-effective and cost-efficient instruments that provide a solid hedge for investors...

Managerial Finance, 2018

Purpose The purpose of this paper is to investigate the ability of the Islamic gold dinar to hedg... more Purpose The purpose of this paper is to investigate the ability of the Islamic gold dinar to hedge against two well-established foreign exchange (FX) risk factors namely, the dollar risk factor and global FX volatility innovations. Design/methodology/approach The paper uses a combination of the Markowitz (1952) portfolio optimization, visual data representations and the classic Fama-Macbeth (1973) two-pass procedure regressions. Findings The findings show that the Islamic gold dinar can serve as a hedge against market volatility, outperforms a diversified currency portfolio, and through its inclusions into the diversified currency portfolio, improve said portfolio’s ability to hedge against market volatility. Research limitations/implications Due to the spread of the sample, country-specific factors could not be taken into account. Practical implications The Islamic gold dinar is a cost-efficient, cost-effective, and Shariah-compliant instrument that provides a solid hedge for inves...

Asian Journal of Finance & Accounting, 2019

Bank failures are costly to customers and the wider market. Prevention is always better than cure... more Bank failures are costly to customers and the wider market. Prevention is always better than cure but in light of recent economic downturns, it has become increasingly difficult for regulators to allocate more resources towards in-depth monitoring of banking practices. In this paper, we construct a tool that is able to predict bank failures ahead of time with reasonable accuracy. Through a logistic regression on a matched sample of 536 failed and non-failed US banks, we determine the financial indicators that most accurately predicts bank failure. From the regression, we construct a Bank Health Index that assesses a bank’s propensity to failure. In-sample and out-of-sample tests show that our model is about 90% accurate two years prior to failure, and 95% accurate the year before failure. The accuracy and efficiency of the model and index provides a more efficient and effective tool for assessing a bank’s propensity to failure besides requiring far less resources. With these methods...

Research in International Business and Finance, 2017

Investors and financial markets have been a neglected stakeholder group in studies on a firm's mo... more Investors and financial markets have been a neglected stakeholder group in studies on a firm's motivations to be socially and environmentally responsible. Despite being a strong driving force behind firm value, no study has investigated the influence of market and investor sentiments on CSR behaviour. Using a global sample, we investigate the effects of market and investor sentiments on firm CSR performance. We find negative market and investor sentiments in the prior year motivate firms to improve their CSR performance in the next year. We also find the magnitude of improvement in CSR performance differs not only by country, but by CSR sub-category as well. These findings imply that a firm's motivation to improve its CSR performance is reactionary, rather than being driven by altruism. Regulators and proponents of CSR should thus seek to persuade investors and financial markets to put pressure on firms to further advance the CSR agenda.

Research in International Business and Finance, 2017

The Chinese Yuan or Renminbi has not been given due attention in the literature despite its impor... more The Chinese Yuan or Renminbi has not been given due attention in the literature despite its importance in providing stability in global FX markets and attaining IMF reserve currency status. Unlike other currencies, the Yuan is subject to strict monetary controls by the People's Bank of China. We explore factors that explain Yuan carry trade returns during the dollar-peg and managed float regimes by observing its response to the dollar risk factor, global FX volatility innovations and, liquidity. Using the traditional Fama and Macbeth (1973) two-pass ordinary least squares regression, we find that the effects of the dollar risk factor, global FX volatility innovations and liquidity on Yuan carry trade returns: (1) are unlike those on other currencies; (2) vary monotonically as the maturity of the carry trade position increases; and (3) are affected by the exchange rate regime in force. Our results suggest that short-term Yuan carry trade portfolios may serve as a hedge against market volatility. 1-year positions are far more resilient and deliver substantial returns especially during periods of low market volatility. Our results also exhibit the Yuan's dependence on the dollar in its valuation besides the transfer of wealth between U.S. equity markets and dollar-denominated assets to the Yuan and Yuan-denominated assets.

SSRN Electronic Journal, 2012

This paper aims to identify the key factors that have contributed to the existence and the growth... more This paper aims to identify the key factors that have contributed to the existence and the growth of Arrahnu (Islamic pawn broking scheme) in Malaysia. Based on the previous studies and cost of borrowing analysis, this paper found that the need for interest (riba) free, transparent transaction and low cost shortterm cash borrowing scheme is much preferred by the pawning customers. Besides that the cost of borrowing in this scheme is the lowest compared to the conventional pawn broking scheme. However, the Ar-rahnu scheme needs to address central issues such as the marketing, public awareness and the locations of this scheme.

SSRN Electronic Journal, 2012

This study examines the viability of the Islamic Gold Dinar as a hedging tool against currency ex... more This study examines the viability of the Islamic Gold Dinar as a hedging tool against currency exchange rate risk. Using the Auto Covariance Ratio the paper attempts to identify the percentage of time gold value is stable in the currency exchange market on a daily basis for a period of 12 years against the US Dollar and Malaysian Ringgit. This study also examines the volatility of gold prices relative to a host of other currencies using conventional standard deviation. Our findings show that the value of gold is more stable than the US dollar and Malaysian Ringgit over the sample period. However our findings also reveal that the volatility of gold prices itself has been progressively rising since 2003. Further tests reveal that the volatility of gold prices are highly correlated with the volatility of other national currencies. We conclude that the Islamic Gold Dinar cannot as yet be used as a hedging tool for exchange rate risks.

Journal of Asia-Pacific Business, 2014

The authors investigate the relationship between board ethnic diversity, ethnicity and market, an... more The authors investigate the relationship between board ethnic diversity, ethnicity and market, and book measures of firm financial performance using Malaysian data. This represents a departure from prior studies that focused on White countries whose people remain culturally indistinct. Ethnic diversity is measured by the Herfindahl-Hirschman Index; ethnicity is the largest representation of a single race. Controlling for firm- and board-specific attributes, the authors find a significant positive relationship between ethnic diversity and firm financial performance and that financial performance of companies differ between ethnicities. The results suggest that despite modernization and homogenization, corporate Malaysia is still divided along racial lines.

Asian Journal of Finance & Accounting, 2018

This paper studies the influence of religiosity on corporate risk-taking. The study uses unique m... more This paper studies the influence of religiosity on corporate risk-taking. The study uses unique micro-level data on religious devotion and distinguishes between manager religiosity, firm intrinsic religiosity, firm extrinsic religiosity, and social capital. Analysis shows that manager religiosity is associated with lower risk-taking. Firm intrinsic religiosity however, moderates this association. Further analysis shows that managers of Islamic firms are more likely to make risky decisions as compared to managers of other firms due to socio-religious pressure. Manager religiosity is also associated with lower firm equity risk. The results also suggest that strong external monitoring weakens the negative relationship between religiosity and risk-taking. This study shows how religious managers may be a double-edged sword. Religious managers are not risk-takers but are susceptible to social pressure. They are however, also more well-adjusted to a changing environment which inspires conf...

Social Science Research Network, 2021

Internationalization contributes to economic growth and as a result, many nations seek to encoura... more Internationalization contributes to economic growth and as a result, many nations seek to encourage it by liberalizing domestic business environments and standardizing trade policies with other nations. However, in their attempt to standardize policy, some nations – through regulatory authority – (un)willingly adopt a heavy-handed approach, creating institutional pressures that stifle firm-level decisions, to align firm interests with those of the state. Inconsistencies in the framing and enforcement of laws and standards meanwhile, create institutional complexities. Both institutional pressures and complexities force firms to devise strategic responses that ultimately result in either an (un)intentional decoupling, or (in)voluntary de-internationalization. In this chapter, we discuss these concepts in the context of Sino-American trade relations and the intellectual property rights (IPRs) issues, before providing a conceptual framework that will help form the basis of further analy...

Pacific Rim Property Research Journal

Asian Journal of Finance & Accounting

This paper empirically investigates what has been claimed in the literature; that there are no si... more This paper empirically investigates what has been claimed in the literature; that there are no significant differences between the Islamic and Western schools of business ethics. A proxy for the Western school is corporate social responsibility (CSR) while in the Islamic school, a reasonable approximation would be Shariah-compliance (SC). But because financial performance is not the main priority in CSR and SC, this study examines the effects CSR and SC has on firm resilience and firm risk. The regression estimates using an emerging market sample show that both CSR and SC improves firm resilience besides reducing firm risk in the following year. The findings empirically validate the claims made in the literature; that business ethics, Islamic or otherwise, are similar in substance and form. By empirically examining this claim, this study paves the way for a convergence of values and practices besides fostering greater unity between cultures.

Asian Journal of Finance & Accounting

This paper examines the factors that drive the recent exponential growth in Malaysian house price... more This paper examines the factors that drive the recent exponential growth in Malaysian house prices. We first construct a sentiment index for the housing market in Malaysia guided by the methods employed by Baker and Wurgler (2006). Preliminary analyses of our bias-free sentiment index indicate a strong correlation with overall market confidence which attests to the reliability of our index. The results also show contemporaneous sentiment to strongly influence future housing market returns especially in the short-term. Contrary to the literature, our results suggest that it is property developer behaviour that drive sentiments and property prices. The study contributes to the literature by providing an easily generalizable method of constructing a housing market sentiment index in other countries that holistically accounts for essential housing market elements that are otherwise ignored in confidence indices. This study also contributes to practice as it provides evidence to policy-m...

SSRN Electronic Journal, 2020

Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased vol... more Prior studies have shown that the COVID-19 pandemic has led to negative returns and increased volatilities in various financial markets. Not many however have sought to investigate why. With anecdotal evidence pointing to investors earning abnormal returns despite the pandemic, this paper sought to determine whether markets-for whatever reason-were overreacting to the pandemic. Using a sample of the largest 3,000 companies across 15 countries, we found evidence that markets were overreacting to various COVID-19 events. Specifically, we found that markets showed strong signs of reversal in response to negative events (e.g. lockdowns, confirmed cases, deaths). Positive events (e.g. vaccine development, recoveries) did not elicit a similar response. Our results suggest that the volatilities and negative returns during the sample period may be driven by non-COVID factors. This will have profound implications for future COVID-financial markets research and government policy as it redirects attention to individual countries rather than adopting a "global" approach to research or policy-setting.