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The effect of debt securities issuance towards equity market behavior in Malaysia


Chin, Sze Kim and Abdullah, Nur Adiana Hiau (2011) The effect of debt securities issuance towards equity market behavior in Malaysia. In: Proceedings of Annual Paris Conference on "Money, Economy and Management", 14-15 July 2011 , Hotel Novotel Paris Tour Eiffel, Paris, France .

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Abstract

The study investigates the impact of debt securities issuance on equity market behaviour of the issuers. The event study results reveal that overall debt securities issuers experience increase in equity return following debt securities issuance and decrease in systematic risk while total risk remain unchanged.Further examination of the 100 debt securities issuing companies found significant differences between hybrid and non-hybrid debf securifies issues. Hybrid debt securities experience significant fall in equity returns and systematic risk but an increase in total risk.Non-hybrid debt securities issues, however; are found to have no impact on equity market behaviour. Findings of the study imply that general decline in systematic risk for debt securities issuing company could motivate issuance of debt securities and thus improve market liquidity.Further; non-hybrid debt securities are not appropriate to be used for market signal as no impact on market behaviour was found following the issuance.

Item Type: Conference or Workshop Item (Paper)
Additional Information: ISBN 978-0-9808279-1-0
Uncontrolled Keywords: Debt Securities, equity market behaviour
Subjects: H Social Sciences > HG Finance
Divisions: College of Arts and Sciences
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 11 Aug 2011 04:02
Last Modified: 11 Aug 2011 04:02
URI: http://repo.uum.edu.my/id/eprint/3726

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