The financial ratio usage towards predicting stock returns in Malaysia
This paper examines whether a simple fundamental analysis strategy based on historical accounting information can predict stock returns. Construction and material sector are chosen in this study. Five common stock return predictor used in this study are price earning (PE), return of equity (ROE), de...
| Main Authors: | , , , |
|---|---|
| Format: | Journal Article |
| Published: |
www.Inderscience.com
2012
|
| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.11937/11951 |
| _version_ | 1848747942315294720 |
|---|---|
| author | Jais, Mohamad Jakpar, Shaharudin Tan, Kia Puai Doris Shaikh, Junaid |
| author_facet | Jais, Mohamad Jakpar, Shaharudin Tan, Kia Puai Doris Shaikh, Junaid |
| author_sort | Jais, Mohamad |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This paper examines whether a simple fundamental analysis strategy based on historical accounting information can predict stock returns. Construction and material sector are chosen in this study. Five common stock return predictor used in this study are price earning (PE), return of equity (ROE), debt to equity (DE), earning growth (EG) and price to net tangible asset (P/NTA). The results show that historical accounting signals are able to predict stock return. The mature group firm outperformed new and stable firm in predictive power. The finding reveals that nearly all return predictor have positive correlation with future stock return. Despite the down activity of the market over the sample period chosen, results reveal that fundamental accounting signals of winner portfolio that provide positive future return from a loser one generating a negative return still be able to generate positive return. |
| first_indexed | 2025-11-14T06:57:10Z |
| format | Journal Article |
| id | curtin-20.500.11937-11951 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T06:57:10Z |
| publishDate | 2012 |
| publisher | www.Inderscience.com |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-119512018-03-29T09:05:56Z The financial ratio usage towards predicting stock returns in Malaysia Jais, Mohamad Jakpar, Shaharudin Tan, Kia Puai Doris Shaikh, Junaid historical accounting information financial ratio Malaysia portfolio stock returns stock return prediction future earnings accounting signals This paper examines whether a simple fundamental analysis strategy based on historical accounting information can predict stock returns. Construction and material sector are chosen in this study. Five common stock return predictor used in this study are price earning (PE), return of equity (ROE), debt to equity (DE), earning growth (EG) and price to net tangible asset (P/NTA). The results show that historical accounting signals are able to predict stock return. The mature group firm outperformed new and stable firm in predictive power. The finding reveals that nearly all return predictor have positive correlation with future stock return. Despite the down activity of the market over the sample period chosen, results reveal that fundamental accounting signals of winner portfolio that provide positive future return from a loser one generating a negative return still be able to generate positive return. 2012 Journal Article http://hdl.handle.net/20.500.11937/11951 10.1504/IJMFA.2012.049677 www.Inderscience.com restricted |
| spellingShingle | historical accounting information financial ratio Malaysia portfolio stock returns stock return prediction future earnings accounting signals Jais, Mohamad Jakpar, Shaharudin Tan, Kia Puai Doris Shaikh, Junaid The financial ratio usage towards predicting stock returns in Malaysia |
| title | The financial ratio usage towards predicting stock returns in Malaysia |
| title_full | The financial ratio usage towards predicting stock returns in Malaysia |
| title_fullStr | The financial ratio usage towards predicting stock returns in Malaysia |
| title_full_unstemmed | The financial ratio usage towards predicting stock returns in Malaysia |
| title_short | The financial ratio usage towards predicting stock returns in Malaysia |
| title_sort | financial ratio usage towards predicting stock returns in malaysia |
| topic | historical accounting information financial ratio Malaysia portfolio stock returns stock return prediction future earnings accounting signals |
| url | http://hdl.handle.net/20.500.11937/11951 |