The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia
Sukuk yields mimic those of conventional bonds due to having similar features. Sukuk are shariah-compliant securities that offer different structures to those of conventional bonds. Therefore, it is believed that the spreading of yields should also be different. The presence of key institutional inv...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2019
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| Online Access: | http://journalarticle.ukm.my/14532/ http://journalarticle.ukm.my/14532/1/25952-104472-2-PB.pdf |
| _version_ | 1848813575103053824 |
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| author | Noriza Mohd Saad, Mohd Nizal Haniff, Norli Ali, |
| author_facet | Noriza Mohd Saad, Mohd Nizal Haniff, Norli Ali, |
| author_sort | Noriza Mohd Saad, |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | Sukuk yields mimic those of conventional bonds due to having similar features. Sukuk are shariah-compliant securities that offer different structures to those of conventional bonds. Therefore, it is believed that the spreading of yields should also be different. The presence of key institutional investors/owners and certain Board of Directors (BOD) characteristics as highlighted by the Malaysian Code on Corporate Governance (MCCG) may influence the yield to maturity (YTM) of conventional bonds and sukuk. Thus, the main objective of this study is to investigate the relationship between these two yield spreads instruments with corporate governance mechanisms. The data is obtained from firm issuers’ annual reports, the Bondinfo Hub of the Malaysian Central Bank, the Rating Agency Malaysia (RAM), the Malaysian Department of Statistics and Bloomberg databases for the period beginning 2000 to 2014 for 256 and 405 tranches of long-term and medium-term issuances of conventional bonds and sukuk respectively. The most significant findings show that the presence of top-six and other institutional ownerships as corporate governance mechanism proxy insignificantly and significantly reduce yield spreads within the firm revealed by Ordinary Least Square (OLS) and random effects models in long-term and medium-term issuances. |
| first_indexed | 2025-11-15T00:20:22Z |
| format | Article |
| id | oai:generic.eprints.org:14532 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:20:22Z |
| publishDate | 2019 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:145322020-05-02T05:39:08Z http://journalarticle.ukm.my/14532/ The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia Noriza Mohd Saad, Mohd Nizal Haniff, Norli Ali, Sukuk yields mimic those of conventional bonds due to having similar features. Sukuk are shariah-compliant securities that offer different structures to those of conventional bonds. Therefore, it is believed that the spreading of yields should also be different. The presence of key institutional investors/owners and certain Board of Directors (BOD) characteristics as highlighted by the Malaysian Code on Corporate Governance (MCCG) may influence the yield to maturity (YTM) of conventional bonds and sukuk. Thus, the main objective of this study is to investigate the relationship between these two yield spreads instruments with corporate governance mechanisms. The data is obtained from firm issuers’ annual reports, the Bondinfo Hub of the Malaysian Central Bank, the Rating Agency Malaysia (RAM), the Malaysian Department of Statistics and Bloomberg databases for the period beginning 2000 to 2014 for 256 and 405 tranches of long-term and medium-term issuances of conventional bonds and sukuk respectively. The most significant findings show that the presence of top-six and other institutional ownerships as corporate governance mechanism proxy insignificantly and significantly reduce yield spreads within the firm revealed by Ordinary Least Square (OLS) and random effects models in long-term and medium-term issuances. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/14532/1/25952-104472-2-PB.pdf Noriza Mohd Saad, and Mohd Nizal Haniff, and Norli Ali, (2019) The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia. Jurnal Pengurusan, 55 . pp. 85-96. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/1167 |
| spellingShingle | Noriza Mohd Saad, Mohd Nizal Haniff, Norli Ali, The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia |
| title | The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia |
| title_full | The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia |
| title_fullStr | The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia |
| title_full_unstemmed | The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia |
| title_short | The encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and Sukuk in Malaysia |
| title_sort | encumbrance of institutional investor and board of directors in reducing risk of default for conventional bonds and sukuk in malaysia |
| url | http://journalarticle.ukm.my/14532/ http://journalarticle.ukm.my/14532/ http://journalarticle.ukm.my/14532/1/25952-104472-2-PB.pdf |