The Effect of Debt Securities Issuance towards Equity Market Behavior in Malaysia (Kesan Penerbitan Sekuriti Hutang terhadap Kelakuan Pasaran Ekuiti di Malaysia)

Chin Sze Kim, Nur Adiana Hiau Abdullah

Abstract


ABSTRACT

The study investigates the impact of debt securities issuance on the equity market behavior of the issuers. Event study results reveal that overall debt securities issuers experience an increase in equity return and a decrease in systematic risk, while total risk remains unchanged. The further examination of the 100 debt securities issuing companies finds significant differences between hybrid and non-hybrid debt securities issues. Hybrid debt securities experience a significant increase in equity return, decline in systematic risk and increase in total risk. Non-hybrid debt securities issues, however, are found to have no impact on equity market behavior. The findings of the study imply that the general decline in systematic risk for debt securities issuing companies could motivate the issuance of debt securities, particularly the hybrid type, and thus improve market liquidity. Further, non-hybrid debt securities may not be the appropriate alternative for sending a market signal as no impact on market behavior is found following the issuance.

ABSTRAK

Kajian ini menguji kesan penerbitan sekuriti hutang terhadap kelakuan pasaran ekuiti penerbit. Keputusan kajian peristiwa menunjukkan syarikat yang menerbitkan sekuriti hutang mengalami peningkatan dalam pulangan ekuiti dan penurunan dalam risiko sistematik manakala risiko keseluruhan tidak berubah. Pemeriksaan selanjutnya ke atas 100 syarikat yang menerbitkan sekuriti hutang mendapati wujud perbezaan antara sekuriti hutang kacukan dengan bukan-kacukan. Sekuriti hutang kacukan mengalami perubahan yang signifikan iaitu peningkatan dalam pulangan ekuiti, penurunan dalam risiko sistematik dan peningkatan dalam risiko keseluruhan. Sebaliknya, terbitan sekuriti hutang bukan-kacukan didapati tidak mempengaruhi kelakuan pasaran ekuiti. Implikasi hasil kajian ini adalah penurunan risiko sistematik bagi syarikat yang menerbitkan sekuriti hutang mampu mendorong penerbitan sekuriti ini, terutamanya jenis kacukan, yang akhirnya dapat meningkatkan kecairan pasaran. Selain daripada itu, sekuriti hutang bukan-kacukan mungkin bukan pilihan yang sesuai untuk memberi isyarat pasaran kerana terbitan sekuriti ini tidak memberi kesan kepada kelakuan pasaran ekuiti.


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