Professional Documents
Culture Documents
Amir Ranjbar
CGA070054
Supervisor:
Dr. Cyril Hilaris Ponnu
University Malaya
03/05/2009
Acknowledgement
To my best friend and wife who always was, is, and would
be my best support.
Table of Contents
Acknowledgement ............................................................................................................. 2
List of Tables .................................................................................................................... 6
List of Figures ................................................................................................................... 7
Abstract ............................................................................................................................. 8
1. Introduction................................................................................................................. 10
1.1. Background of the Problem ................................................................................. 11
1.2. Problem Statement ............................................................................................... 13
1.3. Objectives of the Study ........................................................................................ 13
1.4. Summary and Organization of the Remaining Chapters ..................................... 15
2. Literature Review ....................................................................................................... 18
2.1. Corporate Governance in Malaysia ..................................................................... 18
2.2. The Malaysian Legal, Regulatory and Institutional Structure ............................. 18
2.3. Formation of New Governing Bodies.................................................................. 25
2.4. Corporate Governance, Ownership and Performance ......................................... 26
2.5. Corporate Ownership and Control in Malaysia ................................................... 28
2.6. Corporate Governance and Dividend Policies ..................................................... 29
2.7. Does Board Composition Affect The Firm Performance? .................................. 31
6. References................................................................................................................... 78
Appendix A: Financial Status of Companies (Dependent Variables) ............................ 81
Appendix B: Financial Status of Company (Independent Variables) ............................ 87
Appendix C: Management and Ownership of Company ................................................ 93
Appendix D: TDI, TDI-Board, TDI-Disclosure, and TDI-Shareholders ..................... 100
List of Tables
Table 1: Descriptions of La Porta's Factors .................................................................... 20
Table 2: Comparison of Legal Protection and Accounting Standards in various
Countries. ........................................................................................................................ 24
Table 3: Structure of the Transparency and Disclosure Index (TDI). ............................ 41
Table 4: Estimation of effect of Independent Variables on Dependent Variables ......... 57
Table 5: Descriptive Data for Management and Ownership Data .................................. 59
Table 6: Dependent Variables Descriptive Analysis ...................................................... 61
Table 7: Corporate Governance and Ownership Correlation Matrix ............................. 62
Table 8: ROA as Dependent Variable ............................................................................ 63
Table 9: Tobins as Dependent Variable ........................................................................ 64
Table 10: Dividend/Earning as Dependent Variable ...................................................... 65
Table 11: Dividend/Sales as Dependent Variable .......................................................... 66
Table 12: Altman's Z-Score as Dependent Variable....................................................... 67
Table 13: Dept/Assets as Dependent Variable ............................................................... 68
Table 14: Debt/Equity as Dependent Variable ............................................................... 68
Table 15: ROA as Dependent Variable .......................................................................... 70
Table 16: Tobin's Q as Dependent Variable ................................................................... 71
Table 17: Dividend /Earning as Dependent Variable ..................................................... 71
Table 18: Dividend / Sale as Dependent Variable .......................................................... 72
Table 19: Altman's Z-Score as Dependent Variable....................................................... 72
Table 20: Debt / Assets as Dependent Variable ............................................................. 73
List of Figures
Figure 1: Theoretical Framework ................................................................................... 56
Abstract
The existing studies often find statistically controversial effects of corporate
governance and ownership on firm financial performance in developed countries.
Unfortunately, there are rare empirical studies on emerging markets while they often
show wider variations in corporate governance practices, which may have an impact
on firm performance and dividend policy.
A good example in this field is Malaysia. After independence in 1957, Malaysia has
faced many challenges such as riots in 1969 and financial crises in 1997. These
factors caused many reforms in corporate ownership and governance rules in this
country. This study wants to find out how corporate governance and ownership can
affect performance of Malaysian listed companies. This study is important and new in
two ways. First, Malaysia is a fast developing country and in order to accelerate their
progress and avoid any interruption, they tried to accept best practices in corporate
governance during last decade. We want to examine the effect of these changes on
reality and on the performance of Malaysian listed companies. Second, there is no
similar research in Malaysia in this area. The result of this research can help to see the
real effect of Bursa Malaysia policies to regulate market and since this research is
quantitative, its results can illustrate to what degree corporate governance rules and
regulations were successful in Malaysia.
The data used in this research are secondary data gathered from listed companies in
main and second Bursa Malaysia boards. By regression analysis, we tried to find out
to what extent corporate governance is acting successfully.
The results of this study reveal that corporate governance has a positive effect on
Tobins Q, Dividend/Sales, Debt/Assets, and Debt/Equity of company. Also a
narrower bound of corporate governance like TDI Disclosure or Shareholders have
positive effect on Return on Assets (ROA) or TDI disclosure can increase Altmans
Z-Score which means by increasing the transparency of board activities, firms can
reduce their risks.
1. Introduction
Among Asian companies, corporate governance is often regarded as a weak link to
performance. The board of directors is amongst the internal governance mechanisms
intended to ensure that the interests of managers are in line with shareholders interest,
and to discipline or remove ineffective management teams. Most studies have tackled
the issues of corporate governance separately. There are many researches which
targeted the effect of CEO duality, Board Size, Board Balance, Ownership, and Board
Dedication on Firms Performance. Unfortunately, most empirical researches on these
issues have been restricted to US data. The generalizability of such findings may not
extend across national boundaries due to different regulatory and economic
environments, cultural differences, the size of capital markets and the effectiveness of
governance mechanisms.
This study tries to observe the effect of corporate governance and ownership of 100
Malaysian listed companies on their financial performance in 2007. Malaysia has one
of the most developed stock markets in the ASEAN region. This study includes 100
public listed companies in Bursa Malaysia from FTSE BM 30, FTSE BM 70, FTSE
BM Small Cap Index, FTSE BM Second Board, and FTSE BM MESDAQ which
almost covers one seventh of all listed companies in Bursa Malaysia. The extracted
data are from financial data of companies in year 2007.
This study hypothesizes that well-defined policies and regulations which is defined as
listing requirement in Bursa Malaysia can increase the performance of companies.
The results of this study support the above hypothesis and illustrate that there is a
positive relationship between well-management and transparency on one hand, and
high financial performance on the other hand.
The positive effect of the crisis then, in improving corporate governance practices was
also seen by the Second Finance Minister, Mustapa Mohamad. In his own words:
The East Asian crisis poses a multitude of challenges. The biggest challenge ahead
for the country is to resume its drive towards development, to resume growth. In
restoring growth, an industrializing nation such as Malaysia, must have a clear
process in place. This process includes sound regulation of markets, including good
corporate governance practices which will aid to bring about greater depth and
resilience to the Malaysian economy. What I would classify as a positive feature of
the crisis, is the sense of urgency with which issues of corporate governance are
being addressed. Throughout the world, corporate governance reforms have arisen
from local crises. East Asia is no different (Treasury, 199).
Mustapa was also quick not to conclude that better corporate governance practices as
the silver bullet, while at the same acknowledged its importance.
Now, it is important to quantitatively inspecting the results of all these reforms on the
performance of firms. By this mean, it is possible to make sure that the efforts in this
field were necessary and they have done in the correct way.
This study can show the strengths and weaknesses of rules and regulations in financial
market in Malaysia. To measure the financial status of the companies, this study
divides them into the following categories:
Disclosure which measures the degree to which the company reports relevant
corporate facts to the outside stakeholders.
To consider the ownership and other related factors, the following controls items also
added to the final regression:
CEO Duality (whether CEO and Chairman of the board are the same person)
The result of this research finds evidence that better TDI grades leads to an increase in
the Tobins Q, Dividend/Sales, and leverage of company. Also higher ranks in TDI
sub-indices such as Disclosure and Shareholders have positive effect on ROA and
Altmans Z-score.
Chapter 3 describes the analysis methodology, structure of data sample and the ways
and sources from which the data were gathered. This chapter briefly explains the
meaning of each variable and why they have been chosen as a variable in the data set.
In chapter 4, shows the Regression analysis and its results. At first section of this
chapter, there three tables which show the descriptive analysis and the correlation
between Independent Variables. After that, there is an introduction of equations which
have been used and the relationship between estimators and regressors. The results
have been shown as regression table results beside the interpretation of each table. At
last there is a table which gathered all the results of all fourteen regression equations.
Chapter 5 is the conclusion and has some points for further studies. And the last
chapter includes the references we use in this research.
There four appendices which show Dependent Variable, Independent Variable and
Management and Ownership data which are used in analysis.
2. Literature Review
2.1. Corporate Governance in Malaysia
Before 1997/1998 Asian financial crisis, corporate governance practices in Malaysia
were not important and a matter of concern according to many international bodies, in
particular when the World Bank concluded that East Asian countries had the basics
right in terms of economic management, and effective public institutions and
governance (refer to World Bank, 1993). After 1997/1998 economic crisis in most
East Asian countries, especially South Korea, Thailand, Malaysia and Indonesia, this
view changed rapidly. Corporate governance came to be seen as a problem with a
range of international agencies such as the World Bank, International Monetary Fund
(IMF), Asian Development Bank (ADB) and the Malaysian government tried to do
reforms in corporate governance practices as a way of managing the financial crisis.
The CA 1965 deals with the pre-incorporation, incorporation, operations and duties of
companies and their directors, as well as the rights and obligations of shareholders
and directors.
The Policies and Guidelines on Issue/Offer of Securities Commission (SC) and the
listing requirements of the Malaysian stock exchange also play an important role in
regulating directors, investors, brokers and issuers.
The SIA 1983 and SCA 1993 make up the legislative and regulatory framework of
Malaysias capital markets, under the authority of the Ministry of Finance. Under
Malaysian law, company directors are primarily responsible for the governance of
their companies, and the shareholders role in governance is to appoint the directors
and external auditors in order to satisfy themselves, among other things, that an
appropriate governance structure is in place. The shareholders have access to regular
information, can call for emergency shareholder meetings and make proposals at
shareholder meetings. The law protects shareholders by:
1. Stipulating regulations governing the duties of company directors
2. Requiring AGM approval for the acquisition or disposal by directors of assets
of substantial value, and for the issue of shares
Based on the data provided by La Porta et al. (1998), it is evident that Malaysia has
acceptable level of shareholder and creditor rights in comparison to other neighbors or
developed countries. But there are some gaps in Rule of Law, Corruption, and Risk of
Expropriation which governors in Malaysia should try to close them by adding more
precision in Corporate Law.
The following table describes the factors La Porta et al. (1998) used in their research.
Factor
Description
One-Share One- Equals one if the company law or commercial code of the
Vote
country requires the ordinary share carry one vote per share, and
zero otherwise. This law prohibit multi-voting or non-voting.
Anti-director
Right
Efficiency of
Judicial System
Rule of Law
This is an index of the law and order tradition of the country and
is scaled from zero to ten with higher scores for countries with
stronger traditions for law and order. The rule of law index
reflects the degree to which the citizens of a country are willing
to accept the established institutions to make and implement
laws and adjudicate disputes. Higher scores indicate sound
political institutions, a strong court system, and provisions for an
orderly succession of power. Lower scores indicate depending
on physical force or illegal means to settle scores. Upon
changes in government, new leaders may be less likely to accept
the obligations of the previous regime.
Corruption
corruption.
Risk of
expropriation
Accounting
Standards
8.52
9.27
75
Canada
9.25
10.00
10.00
9.67
74
Hong Kong
10.00
10.00
10.00
9.67
69
India
8.00
4.17
4.58
7.75
57
Indonesia
2.50
3.98
2.15
7.16
Na
Malaysia
9.00
6.78
7.38
7.95
76
Singapore
10.00
8.57
8.22
9.30
78
Taiwan
6.75
8.52
6.85
9.12
65
Thailand
3.25
6.25
5.18
7.42
64
10.00
8.57
9.10
9.71
78
10.00
10.00
8.63
9.98
71
Anti-director Right
Risk of Expropriation
10.00
Corruption
10.00
Creditors Right
Rule of Law
Australia
Countries
Accounting Rating
United
Kingdom
United State
At the same time, the government set up the High Level Finance Committee on
Corporate Governance (HLFC) to establish a framework for corporate governance
and set best practices in Malaysia. The HLFC was a partnership effort between the
government and the private sector to enhance the standards of corporate governance
in Malaysia.
The root of both conflicts is the fact that the manager in the first case, and the
controlling shareholders in the second case, receive only a portion of the firms net
revenue, while they fully appropriate the resources diverted. Thus, it is conceivable
that, in light of this incentive structure, insiders will maximize their utility even when
the firm as a whole will not.
Of course, the ability to fulfill these goals is conditioned on the power which insiders
have in the companys decision-making process. Managers will enjoy more power as
they are part of the board or act in connivance with the board and the controlling
shareholders. In turn, the power of controlling shareholders relies in how effectively
they can manipulate board decisions by way of voting majorities and other means;
distortionary policies will then increase as the ratio of voting to cash flow rights is
higher (see La Porta et al., 1999, and Claessens et al., 1999). Outsiders have two main
instruments to counterbalance this power: the enforcement of adequate corporate
governance standards and the quality of the regulatory and legal environment, which
should discourage detrimental actions by insiders and, once committed, allow affected
stakeholders to challenge them through corporate and judicial channels.
While a wedge between control and cash flow rights is likely to harm minority
shareholders and corporate valuation, Jensen and Meckling (1976) and Morck,
Shleifer and Vishny (1988) make the point that concentrated ownership may actually
have an ambiguous effect: on one hand, there may be a beneficial effect on
performance and valuation (the so-called incentive effect) in that higher cash flows
rights in the hands of a few shareholders tends to reduce the free riding problem
associated with dispersed ownership when it comes to monitoring and punishing
opportunistic managers; on the other hand, the negative effect (the entrenchment
effect) above mentioned may take place whenever there is high concentration of
control rights and/or separation between control and cash flow rights.
However the controlling shareholders may follow objectives that are not aligned with
those of minority shareholders (Morck et. al, 2000 and Bebchuk et. al, 2000). Mitton
(2002) reported that a higher ownership concentration is comes with a higher stock
price return of an average of 2.6% for every increase of 10% in the ownership of the
largest shareholders.
Most of them are rooted in information asymmetries between firm insiders and
outsiders, and suggest that firms may indicate their future profitability by paying
dividends. Grossman and Hart (1980) pointed out that dividend payouts can mitigate
agency conflicts by reducing the amount of free cash flow available to managers, who
do not necessarily act in the best interest of shareholders. Similarly, Jensen (1986)
argues that a company with substantial free cash flows is inclined to adopt investment
projects with negative net present values. If managers increase the amount of
dividends, they also reduce the amount of free cash flows, and mitigate the free cash
flow problem. Thus, dividend payouts may help control agency problems by getting
rid of the excess cash that otherwise could be spent on unprofitable projects. La Porta
et al. (2000) outline and test two agency models of dividends.
First, the outcome model suggests that dividends are paid because minority
shareholders pressure corporate insiders to disgorge cash.
Second, the substitution model predicts that firms with weak shareholder
rights need to establish a reputation for not exploiting shareholders.
Hence these companies pay dividends more generously than do firms with strong
shareholder rights. In other words, dividends substitute for minority shareholder
rights. The empirical results of La Porta et al. (2000) on a cross-section study of 4000
companies from 33 countries with different levels of minority shareholder rights
support the outcome agency model of dividends. Accordingly, it is reasonable that
outside minority shareholders prefer dividends over retained earnings. In accordance
with that, Bebczuk (2005) argues that the testable prediction of this theoretical body is
that dividend disbursements will be higher the better are the corporate governance
practices in the company. In this case, corporate governance reflects the power of
shareholders in the company.
Prior research does not support a clear correlation between board independence and
firm performance. For example, early work by Vance reports a positive correlation
between the proportion of inside directors and a number of performance measures.
Baysinger and Butler (1985), Hermalin and Weisbach (1988), and MacAvoy and
coauthors (1983) all report no significant same year correlation between board
composition and various measures of corporate performance. A recent large-sample
study by Ferris and his coauthors (2006) finds no significant correlation between
proportion of outside directors in 2005 and ratio of market value to book value in
2006. An early expectation to these non-results come from Baysinger and Butler, who
report that the proportion of the independent directors in 1970 correlates with 1980
industry-adjusted return on equity. However, their ten-year lag period is very long for
any effects of board composition on performance to persist. Studies in Australia,
Singapore, and the United Kingdom also find no correlation between board
composition and firm performance.
A few studies offer hints that firms with a high percentage of independent directors
may perform worse. Yermack (1997) reports a significant negative correlation
between the proportion of independent directors and contemporaneous Tobins q
(ratio of the market value of a firms asset to the book value of its assets), but no
significant correlation for several other performance variables (sales/assets; operating
income/assets; operating income/sales). Agrawal and knoeber (1996) report a negative
correlation between the proportion of outside directors and Tobins q. Klein (2002)
reports a significant negative correlation between a measure of change in market
value of equity and proportion of independent directors, but insignificant results for
return on assets and stock market returns. Fosberg reports that majority-outside boards
have a significantly lower sales/assets ratio, but finds insignificant (although generally
negative) results for several other performance measures.
Even studies by Rosenstein and Wyatt (1990) find that stock prices increase by about
0.2% on average when a company appoints an additional outside director. This
increase, while statistically significant, is economically small and could reflect
signaling effects. Appointing and additional outside director could signal that a
company plans to address its business problem, even if board composition doesnt
affect the companys ability to address these problems. Moreover, Rosenstein and
Wyatt (1990) find a stronger price reaction for outside directors who work for
financial institutions than for directors whose principal job is with another unrelated
non-financial corporation. Yet outside directors who work for financial institutions
are usually treated as affiliated outside directors rather than independent directors,
because their own firm may be interested in business dealings with the firm on whose
board they sit. Rosenstein and Wyatt (1990) find that stock prices neither increase nor
decrease on average when an insider is added to the board.
Hermalin and Weisbach (1991), (using the same data set), report that the proportion
of independent directors on large firm boards increase when company has performed
poorly. This effect is statically significant but numerically small. Weisbach concludes
from this evidence that since the change in board composition following poor
performance is relatively small, and board composition changes very slowly over time
it is unlikely that the potential endogeneity of the board composition is a serious
problem.
In contrast to Hermalin and Weisbach (1991), Klein (2002) finds no evidence that
performance affects board composition. In her sample, firms in the bottom quintile for
1991 stock price returns are no more likely to add independent directors in 1992 and
1993 than the firms in the top quintile. Denis and Denis (1994) report that firms that
substantially increase their proportion of independent directors had above-average
stock price returns in the previous year. They also report that average board
composition for a group of firm changes slowly over time and that board composition
tends to regress to the mean, with firms that have a high (low) proportion of
independent directors reducing (increasing) this percentage over time.
Malaysia was not spared from the crisis. The Malaysian Ringgit experienced waves of
speculative pressure. It depreciated 40% against the US Dollar by the end of August
1998 from its level in June 1997. The Kuala Lumpur Stock Exchange (KLSE)
Composite Index fell by 79% from a high of 1,271 points in February 1997 to 262
points in September 1998.2 The vicious cycle of massive withdrawal of funds from
the domestic financial markets to safer offshore havens started. The effects then
spread through the banking and corporate sector. High interest rates and marked drop
in domestic demand crippled the financial performance of the corporate sector.
Companies borrowed heavily from banks to finance their rapid expansion during the
good times, sometimes expansion to areas of non-core business. This made them very
vulnerable to interest rates fluctuations. With the high interest rates and the economic
contraction the debt servicing capacity of these companies were greatly affected. This
in turn created large number of non-performing loans for the banking sector. As a
result banks began overly cautious in extending new loans even to viable businesses.
The financial crisis brought to the foreground the weak corporate governance
practices: the weak financial structure of many companies; over-leveraging by
companies; lack of transparency, disclosure and accountability; existence of a
complex system of family control companies; little or no effective laws to ensure that
controlling shareholders and management treat small investors fairly and equitably;
assets shifting; conglomerate structures that were perceived to be given preferential
treatment; allegations of cronyism the aggrandizement of a politically connected
3. Methodology
3.1. Determinants of Financial Status of Companies
Now it is turn to specify the determinants of corporate performance. The data
extracted for analysis belong to 2006-2007 accounting period. The reason for relying
on data before 2008 is the March stock market shocks after parliamentary election in
Malaysia. This research considers data for previous period because it was concerned
about this events effect on the behavior and performance of firms.
This study follows the way of previous studies to measure performance of companies
by taking the return on assets (ROA) and Tobins q as indicators of performance. The
return on assets is an accounting measure of profitability and efficiency, while
Tobins q captures market expectations about future earnings. Companies demand
for funds for further investment is represented by a high Tobins q value, which
should have a negative impact on dividends. Even though one would expect some
correlation between them, this may not be always the caseas a matter of fact, the
simple correlation in our sample is positive but not significant. Also the implications
are radically different in each case: while the ROA-corporate governance link reflects
a tangible, balance-sheet effect, the q-corporate governance nexus has more to do with
market perceptions about the value of corporate governance.
The expectation is that an increase in the TDI or its sub-indices leads to an increase in
the dividend to Earning or Sales. This research has focused on an agency-related
rationale for paying dividends. It is based on the idea that dividends may mitigate
agency costs by distributing free cash flows that otherwise would be spent on
unprofitable projects or as useless perks for managers. Dividends expose firms to
more frequent inspections by the capital markets as dividend payouts increase the
likelihood of new common stock issues. However, this scrutiny helps alleviate
opportunistic management behavior and thus agency costs, which, in turn, are related
to the strength of shareholder rights and corporate governance. In addition,
shareholders may prefer dividends, particularly when they fear expropriation by
insiders. As a consequence, we advance a hypothesis that dividend payouts are
determined by the strength of corporate governance.
These ratios are then multiplied by a predetermined weight factor, and the results are
added together. The final number (the Z-score) yields a number between -4 and +22.
Financially-sound companies show Z-scores above 2.99, while those scoring below
1.81 are in fiscal danger, maybe even heading toward bankruptcy. Scores that fall
between these ends indicate potential trouble.
This research expects that higher ranks in corporate governance factors have a
positive relationship with Altmans Z-score.
The leverage ratio (debt to assets and debt to equities) shows the capital structure and
bankruptcy risk of company. The high value of leverage ratio shows that management
could not obtain shareholder interest for new projects and had to launch them by loans
from creditors. High leverage and the implied financial risk should be associated with
lower dividend payout as it discourages both paying out dividends and taking further
loans.
binary item equals one if a company follows one of the corporate governance
standards and zero otherwise.
The sub-index Disclosure measures the degree to which the company reports
relevant corporate facts to the outside stakeholders.
Table 3 shows the percentage of positive entries for the TDI and its three sub-indices.
information
on each item
100%
100%
8%
100%
85%
100%
100%
100%
14%
100%
81%
53%
0%
100%
32%
0%
0%
100%
100%
100%
54%
70%
In the second column of Table 3 you can find % of firms with public information on
each item. These percentages reveal useful information about transparency of
companies in Bursa Malaysia and show to what extent listing rules and regulations
can force companies to reveal required information for shareholders.
Items 4 and 5 in Table 3 also show that only 63% and 58% of companies informing
shareholders and other stakeholder about the way of payment to managers and
whether these payments are related to their performance. This means many companies
are reluctant to specify directors remuneration.
Other items show that because of listing requirement almost 100% of companies
deliver complete information about board committees and their activities.
The last point is that according to the listing requirement all companies adopted code
of conduct for their board members and announce it every year through their Annual
Reports.
Age
Race
Education background
Based on the above data, shareholders or other stakeholders can gain useful
information about board ability and diversity.
Item 11 in Table 3 shows the lack of information about future events of companies.
Based on the gathered data, only 14% of companies have a calendar of events for next
year about their future projects and plans. Even many of companies do not have any
segment in their annual reports or websites to reflect the summary of important events
for last year. This calendar of events can briefly give an idea about activities of
company to shareholders and other stakeholders. It can include future or previous
projects, contracts, and exhibitions.
Item 15 on Table 3 illustrate that all board meeting resolutions are 100% confidential
and only board members and major shareholders who have a seat in board can have
access to those data.
Based on our research, only 13% of Malaysian listed companies are widely held. It
means, the rest of companies have at least one major shareholder with more than 20%
of share directly or indirectly. This major shareholder can be Family, Government
linked company, or a financial institute. In a country with concentrated type of
ownership, 100% confidential board resolution may lead to some kind of insider
training which may lead to restricting minority shareholders.
Item 17 in Table 3 illustrates another lack in corporate board activity. Only 32% of
firms have a specific and manifest procedure for board member nomination. Others
just mention some ambiguous information about this process or do not mention any
thing. In some companies, they have specific nomination board committee which
majority of them are independent directors which their main responsibilities are as
follows:
Evaluate the effectiveness of the Board and Board Committees (including the
size and composition) and contributions of each individual director;
Items 18 and 19 also reveal that companies in Malaysia and Bursa Malaysia do not
consider any space for dissident or minority shareholders. Item 18 shows that the
companies does not keep any information about attendance in Annual General
Meeting (AGM). It is obvious that major shareholders or their proxy attend AGM and
it is not important for companies to show their minority shareholders also participate
in AGM.
Item 19 in Table 3 also reveals that even if dissident minority shareholders have
ability to raise their questions, companies do not consider any mechanism to inform
other shareholders about those issues. It is obvious that majority shareholders not
even are possible to raise any issue; they can influence board in any way because they
have some seats and nominees in board which present their opinion in board
meetings. They have this ability because they are holding more than 20% of the
companys share in their hand and every time in AGM voting for new board members
they can influence votes.
On the other hand, it is very difficult for minority shareholders to even transfer their
opinions to the board members. In this study, we look at the ways investors can
communicate to the board to raise their issues. Unfortunately, many firms in Malaysia
only let their minority shareholders to contact them in AGM and through proxy letter
or voting process about predefined resolutions. It is not even possible for minority
shareholders to raise their resolution in AGM.
In some companies the situation is better and there some or all the following ways to
raise your problems and issues through communicating with board members or their
nominee. The following items show some of the ways which companies use for
communication which unfortunately some of them are not bidirectional and just are
used as a way to inform shareholders or other stakeholders about companies status.
During the year, the Managing Director and/or key management personnel also
hold discussions with the press and analysts when necessary, to provide
information on the groups or companys strategy, performance and major
developments.
Only a few companies introduces a specific person as investor relation which all
shareholders can contact him and raise their issues.
Items 20 and 21 in Table 3 also illustrate one disadvantage and one advantage of
listing requirement rules for company disclosure.
Item 21 shows that according to the rules all companies should put their auditors
report in Annual Report. This is very helpful for shareholders and other stakeholders.
It shows that all the announced results and all the accounting data of company are
audited by a separate auditor and they are reliable which it is a positive point.
On the other hand, Item 20 in Table 3 shows that there is no information available
about the year of hiring of the external auditor. It seems to be a negative point since a
long relationship between firms and their auditors can influence the strictness of
auditors. A long relationship may cause auditors to behave more leniently to their
customers since firms are their long term customers and on the other hand they do not
want to lose them.
Share Capital
o Number of authorized shares
o Share in use
o Issued and paid up
o Nominal Value
o Voting right for example 1 vote per each ordinary share
Also if they have any subsidiary or any other kinds of shares such as warrant they
should reveal it in the Annual Report.
Beside the above information, all Malaysian listed companies reveal Directors
Interest. They show how many shares and percentages of shares are owned directly or
indirectly by board members.
Items 24 and 25 reveal dividend policy of firms. Item 24 shows that only 54% of
Malaysian listed has a part to show their dividend policy in the past five years and
Item 25 illustrates that 70% of firms announce in advance about their next period
dividend policy. Revealing more data about dividend policy can increase investors
confidence and persuade them for more investment.
Sales growth is a proxy for the product demand faced by the firm and its productivity.
Additionally, firms are classified into three broad sectors (production, services, and
others) that vary in productive technology and international tradability.
Others: Plantation,
The percentage of independent board members also is important. On one hand, higher
percentage of independent board members can improve performance of company,
because they are not hired by managers and play supervisory role on behalf of
shareholders. On the other hand, because they are not full time, or they are chosen
from other fields, they can only consider as free riders who only attend meeting and
do not have any positive effect on performance and financial status of company.
Because concentrated owner prefer to work with remaining cash flow from retained
earning instead of dividing it between minority shareholders.
At last but not the least is CEO duality. Some say this factor can increase performance
of factory because management team and board of directors are guided by one person
and CEO has more freedom to apply his plans. But others say that lack of supervision
on CEO from Chairman can increase the risk of misbehavior from CEO. In this
situation CEO may enter into some deals which only secure his benefits not
stakeholders opinion.
FTSE Bursa Malaysia Large 30 Index: This tradable index comprises the 30
largest companies in the FTSE Bursa Malaysia (FBM) EMAS index by market
capitalization.
FTSE Bursa Malaysia Mid 70 Index: Comprises the next 70 companies in the
FTSE Bursa Malaysia EMAS Index by full market capitalization.
FTSE Bursa Malaysia Small Cap Index: Comprises those eligible companies
within the top 98% of the Bursa Malaysia Main Board excluding constituents
of the FTSE Bursa Malaysia 100 Index.
FTSE Bursa Malaysia Second Board Index: The FTSE Bursa Malaysia Second
Board Index comprises all eligible companies listed on the Second Board. No
liquidity screening is applied.
FTSE Bursa Malaysia MESDAQ Index: The FTSE Bursa Malaysia MESDAQ
Index comprises all eligible companies listed on the MESDAQ Market. No
liquidity screening is applied.
All companies selected randomly. We exclude Banks and Finance companies from
our list because of their specific rules and regulations. Also, eliminate all utility and
affiliates of foreign firms.
To obtain required data, we used Bursa Malaysia official website, and Stock
Performance Guide (Malaysia) book published by Dynaquest SDN BHD, edition
March 2008. Beside two above sources of data, we extracted all 25 governance items
from companies 2006-2007 annual reports. For some specific data which we couldnt
find them we used Business Week official website.
Formula 1:
Formula 2:
Figure 1 shows the theoretical framework and the relationship between 7 Independent
Variables and 7 Dependent Variables.
Figure 1: Theoretical
T
Fraamework
Indeepenndennt
Vaariabbles
Deppenddent
Vaariables
TDI
T - Booard
ROA
TDII - Discllosure
T
Tobin's
Q
TDI - Shareeholders
Dividdend / Eaarning
Size
Diviidend / Sales
S
Bo
oard Ballance
Altm
man's Z-S
Score
Ownersh
O
hip
Deebt / Asssets
CEO
C
Duaality
Debbt / Equiities
Based on the hypothesis each of these transparency and disclosure indexes predicted
to have the following relationships on dependent variables:
Dependent Variable
TDI
TDI (Board)
TDI (Disclosure)
TDI (Shareholders)
Board Independence
Size
Ownership
CEO Duality
ROA
/-
/-
Tobins Q
/-
/-
Dividend / Earning
Dividend / Sales
Altmans Z Score
Debt / Assets
Debt / Equity
50 percent of its votes are directly controlled by a single foreign corporate owner.
Further, we banks and utilities were excluded from the sample, to prevent the
domination of this sample by these two industries.
All the collected data are related to 2007 financial year.
TDI
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
Mean
16.19
6.15
6.80
3.24
46%
5.75
13%
15%
Median
16.00
6.00
7.00
3.00
43%
5.46
0.00
0.00
Maximum
21.00
8.00
9.00
4.00
89%
10.09
1.00
1.00
Minimum
11.00
4.00
5.00
2.00
27%
2.83
0.00
0.00
Std. Dev.
2.32
1.00
1.16
0.77
14%
1.53
0.34
0.36
Skewness
-0.04
-0.31
0.08
-0.44
1.04
0.79
2.18
1.94
Kurtosis
2.26
2.54
2.15
1.82
3.55
3.13
5.77
4.78
Only 13% of Malaysian listed companies are widely held, the rest of them has
at least 1 major shareholder with more than 20% of shares directly or
indirectly
Rules and Regulations are not enough to force companies to reveal all
required data for transparency. The gap between companies in TDI factor and
its sub-Indices is high.
o TDI Max = 21 while TDI Min = 11
o TDI Board Max = 8 while TDI Board Min = 4
o TDI Disclosure Max = 9 while TDI Disclosure Min = 2
o TDI Shareholders Max = 4 while TDI Shareholder Min = 2
ROA
TOBIN
DIV/EARNING
DIV/SALE
ZSCORE
DEBT/ASSET
DEBT/EQUITY
Mean
6%
4.52
159%
5%
4.16
37%
80%
Median
6%
1.75
29%
2%
3.14
39%
64%
Maximum
52%
85.50
12317%
53%
20.12
83%
475%
Minimum
-30%
0.17
-172%
0%
0.65
5%
5%
Std. Dev.
10%
11.34
1229%
9%
3.37
19%
75%
Skewness
0.73
5.47
9.83
3.64
2.20
0.16
2.19
10.57
35.29
97.71
18.30
8.34
2.01
10.30
Kurtosis
TDI
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
TDI
1.0000
TDI1
0.7909
1.0000
TDI2
0.8615
0.5084
1.0000
TDI3
0.6772
0.3083
0.4205
1.0000
BOARDIND
-0.0050
-0.0501
0.0069
0.0396
1.0000
LNSIZE
0.5064
0.3066
0.5695
0.2647
-0.0373
1.0000
WIDE
-0.0843
0.0009
-0.0356
-0.2010
0.0244
-0.0757
1.0000
CEO
-0.0841
-0.0641
-0.1213
0.0134
-0.0522
0.0006
0.0025
CEO
1.0000
Table 7 illustrates that except high correlation between TDI and TDI Board ( r =
0.7909) and TDI and TDI Disclosure ( r = 0.8615) there is no other correlation
between Independent Variables. These two relations also do not cause any problem
because they are used separately in regressions.
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
-0.003249
0.018352
0.024882
-0.047127
0.027769
-0.038316
-0.017854
0.009013
0.010194
0.012605
0.056134
0.006913
0.026001
0.024062
-0.360433
-1.800338
1.973960
-0.839544
4.016946
-1.473630
-0.741985
0.7193
0.0751
0.0514
0.4033
0.0001
0.1440
0.4600
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.259946
0.211681
0.085479
0.672215
106.6438
0.063342
0.096274
-2.013006
-1.829512
2.081316
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
-1.478181
-0.165463
-0.749238
-10.70727
3.878258
-2.686535
3.486965
1.032954
1.168299
1.444665
6.433408
0.792272
2.979937
2.757753
-1.431023
-0.141627
-0.518624
-1.664323
4.895112
-0.901541
1.264423
0.1558
0.8877
0.6053
0.0995
0.0000
0.3697
0.2093
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.306209
0.260962
9.796631
8829.607
-362.7668
4.559091
11.39576
7.470037
7.653530
2.087302
Table 9 illustrates that Board Independence (significant at 10%) and Size (significant
at 5%) have a negative effect on Tobins Q which are on contrast with the first
hypothesis. Increase in Board Independence means directors from other fields which
may have less experience or interest in company. This increase can reduce the
performance of board of directors which has a negative effect on Tobins Q.
Also Size shows again a positive effect on performance of company. This means
bigger companies in Malaysia have better performance in comparison with their
smaller counter parts.
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
-1.880107
1.537754
1.028724
3.820185
-0.424548
-0.634703
-0.852145
1.327632
1.501588
1.856794
8.268707
1.018288
3.830042
3.544474
-1.416136
1.024085
0.554032
0.462005
-0.416923
-0.165717
-0.240415
0.1601
0.3085
0.5809
0.6452
0.6777
0.8687
0.8105
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.024424
-0.039201
12.59138
14585.94
-387.6132
1.601336
12.35161
7.971985
8.155478
2.031301
Table 10 reveals that none of corporate governance and ownership factors do not have
significant effect on Dividend/Equity.
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
-0.005626
-0.016329
0.011712
0.024991
0.026624
-0.015314
-0.021197
0.008773
0.009922
0.012269
0.054637
0.006728
0.025308
0.023421
-0.641367
-1.645698
0.954597
0.457402
3.956933
-0.605121
-0.905037
0.5229
0.1032
0.3423
0.6485
0.0001
0.5466
0.3678
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.174683
0.120858
0.083199
0.636837
109.3200
0.051398
0.088734
-2.067070
-1.883577
2.145201
Table 11 illustrates that size is again has a significant positive effect on Dividend /
Sales (Significant at 10%). This reveals the fact that mature companies instead of
keeping their free cash flow as retained earnings for further investing and growth,
prefer to pay it to their shareholders as dividend.
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
0.189712
0.705485
0.465310
4.221937
0.730739
0.697329
0.582988
0.340287
0.384874
0.475918
2.119365
0.260999
0.981684
0.908490
0.557506
-1.833027
0.977712
1.992077
2.799778
0.710339
0.641711
0.5785
0.0700
0.3308
0.0493
0.0062
0.4793
0.5227
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.141152
0.085140
3.227316
958.2320
-252.8384
4.182828
3.374148
5.249261
5.432755
1.792441
Table 12 shows that TDI-Disclosure, Board Independence, and Size have cause
reduction of the risk of companies. Those factors can cause increase in Altmans ZScore which shows the reduction in risk.
Also Size can reduce the risk of a firm. Bigger Size shows more stable business and
higher Working Capital and easier access to other kinds of funds which can reduce the
risk.
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
0.029063
0.034701
-0.016711
-0.015253
0.001942
0.028370
0.014697
0.020824
0.023552
0.029123
0.129693
0.015972
0.060073
0.055594
1.395697
1.473373
-0.573802
-0.117606
0.121579
0.472253
0.264370
0.1662
0.1441
0.5675
0.9066
0.9035
0.6379
0.7921
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.008020
-0.056675
0.197493
3.588330
23.73801
0.374748
0.192124
-0.338142
-0.154648
1.786443
Coefficient
Std. Error
t-Statistic
Prob.
TDI1
TDI2
TDI3
BOARDIND
LNSIZE
WIDE
CEO
0.093622
0.033090
-0.016360
-0.163052
0.020930
0.058155
-0.008705
0.080771
0.091354
0.112964
0.503053
0.061951
0.233013
0.215639
1.159112
0.362213
-0.144823
-0.324124
0.337847
0.249578
-0.040367
0.2494
0.7180
0.8852
0.7466
0.7362
0.8035
0.9679
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.019254
-0.044708
0.766037
53.98670
-110.4590
0.804052
0.749466
2.372909
2.556402
1.809582
Table 13 and 14 reveals that TDI sub-indices and other controlling factors do not have
any significant effect on Capital Structure of company.
The overall assessment is that the TDI has a positive and significant effect on ROA,
Tobins Q, Dividend/Earning, Dividend/Sales, but not for Altmans Z-score and
Leverage of company.
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
-0.002635
-0.044884
0.023988
-0.050441
-0.010895
0.002933
0.057162
0.006688
0.025857
0.024289
-0.898657
-0.785208
3.586810
-1.950798
-0.448549
0.3711
0.4343
0.0005
0.0541
0.6548
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.215337
0.181947
0.087076
0.712734
103.7465
0.063342
0.096274
-1.994879
-1.863812
2.047510
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
0.829854
-10.63602
4.017654
-2.771222
3.334074
0.327231
6.378543
0.746269
2.885266
2.710365
-2.535989
-1.667469
5.383657
-0.960474
1.230120
0.0129
0.0987
0.0000
0.3393
0.2217
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.302672
0.272998
9.716526
8874.622
-363.0186
4.559091
11.39576
7.434718
7.565785
2.088513
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
0.031387
4.090458
-0.121869
-1.217842
-1.106273
0.424749
8.279423
0.968665
3.745109
3.518085
0.073896
0.494051
-0.125811
-0.325182
-0.314453
0.9412
0.6224
0.9002
0.7458
0.7539
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
-0.000078
-0.042634
12.61216
14952.27
-388.8411
1.601336
12.35161
7.956386
8.087452
1.995623
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
-0.005765
0.026362
0.024100
-0.022975
-0.016635
0.002808
0.054742
0.006405
0.024762
0.023261
-2.052945
0.481574
3.762900
-0.927849
-0.715150
0.0429
0.6312
0.0003
0.3559
0.4763
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.152891
0.116844
0.083389
0.653652
108.0299
0.051398
0.088734
-2.081412
-1.950345
2.187311
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
-0.081596
4.238145
0.589619
0.477894
0.797276
0.109331
2.131127
0.249335
0.963992
0.905556
-0.746322
1.988687
2.364769
0.495745
0.880427
0.4573
0.0496
0.0201
0.6212
0.3809
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.112085
0.074302
3.246376
990.6618
-254.4860
4.182828
3.374148
5.242141
5.373207
1.716506
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
0.021037
-0.019048
0.005456
0.045550
0.007077
0.006643
0.129491
0.015150
0.058574
0.055023
3.166687
-0.147096
0.360108
0.777645
0.128622
0.0021
0.8834
0.7196
0.4387
0.8979
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
-0.011109
-0.054135
0.197256
3.657525
22.79258
0.374748
0.192124
-0.359446
-0.228379
1.812605
Coefficient
Std. Error
t-Statistic
Prob.
TDI
BOARDIND
LNSIZE
WIDE
CEO
0.046844
-0.172741
0.019054
0.089456
-0.012529
0.025596
0.498922
0.058372
0.225682
0.212001
1.830161
-0.346228
0.326427
0.396379
-0.059098
0.0704
0.7299
0.7448
0.6927
0.9530
R-squared
Adjusted R-squared
S.E. of regression
Sum squared resid
Log likelihood
0.013626
-0.028347
0.760015
54.29649
-110.7422
0.804052
0.749466
2.338227
2.469293
1.829001
Tables 15 to 21 reveal that whole TDI has positive significant effect on Tobins Q,
Dividend / Sales, Debt / Assets, and Debt / Equity of company.
Dependent Variable
TDI
TDI (Board)
TDI (Disclosure)
TDI (Shareholders)
Board Independence
Size
Ownership
CEO Duality
ROA
Tobins Q
Dividend / Earning
Dividend / Sales
Altmans Z Score
Debt / Assets
Debt / Equity
Significant at 5% level
5. Conclusion
Two goals were followed in this research. First, it gathers, a comprehensive
quantitative measures on the quality of the corporate governance and the ownership
structure in 100 non-financial listed companies in Malaysia with information for
financial year 2007 which are available in Appendices A to D. To do it, a wide array
of official and private sources was used. In summary, companies in Malaysia seem to
follow Code of Corporate Governance. In turn, ownership appears to be quite
concentrated at the level of the largest ultimate shareholder which our data showed
that only 13% of companies are widely held and 87% of remaining are on the hand of
major shareholders directly or through pyramiding. Second, this study tests the
predictions of recent theories linking those measures with corporate performance and
dividend policy in 2007.
The results of this study show a significant positive effect of TDI and its sub-indices
on all performance indicators except Dividend / Earning. Size also has a significant
positive effect on performance and dividend payment of company. While Board
Independence can decrease the Tobins Q of a company by reducing the efficiency of
board of directors, it can increase the Altmans Z-score which causes a reduction in
liquidation of company. It means diversity of board members and supervision of
independent board can reduce the risk of company.
Any policy recommendation emerging from this research should take into account
that improving corporate governance entails the consideration of both the private and
the public interest. Controlling shareholders will not be inclined to cooperate with
such change unless the incremental benefits (acting as regular shareholders) outweigh
the loss of their private benefits of control. The evidence reported here on the ROAgovernance nexus will hopefully be taken into account by insiders. Less apparent are
the benefits from higher Tobins Q.
But corporate governance is, at the same time, a public policy issue in that
uninformed minority shareholders should be legally protected against expropriation.
Raising awareness among investors and businesses about improving corporate
governance is a first, obvious step that should be taken by the authorities to stimulate
a cultural change in this area. Likewise, our average TDI scores suggest that
disclosure requirements frequently found in other emerging and developed markets
should be put in place.
between the adequate protection of minority shareholders and the incentive structure
of controlling shareholders should be attained in designing corporate governance
reforms.
The other areas which are open to see their results in performance and risk of
company are as follows:
The effect of options and other incentives to motivate board members for
better performance
Board dedication which means busy board members which are working in
several companies do have any effect on performance of firm
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ROA
Dividend /
Tobin's Q
Debt /
Debt /
Assets
Equities
Z score
Earning
Sales
9.86%
1.40
5.78%
3.44%
3.16
63.42%
173.38%
5.66%
1.03
52.25%
1.87%
5.99
14.12%
16.45%
29.69%
6.45
75.17%
11.31%
13.71
23.69%
31.05%
13.00%
2.65
59.63%
9.49%
9.92
9.59%
10.61%
ASTINO BHD
7.83%
1.24
28.63%
1.65%
3.01
46.97%
88.57%
5.54%
2.62
0.00%
0.00%
2.54
54.23%
118.48%
1.43%
0.80
43.51%
0.50%
1.36
82.60%
474.70%
BOLTON BHD
7.82%
0.89
9.33%
1.78%
1.83
51.51%
106.21%
51.72%
85.50
128.34%
24.52%
12.52
75.56%
309.16%
13.29%
8.24
105.18%
9.20%
10.91
20.18%
25.28%
3.13%
1.90
47.18%
2.10%
2.21
47.72%
91.29%
1.71%
2.10
109.77%
1.17%
4.25
26.76%
36.55%
-3.26%
0.60
-66.25%
2.09%
4.83
11.58%
13.10%
4.32%
1.65
36.01%
15.73%
4.48
8.30%
9.05%
-12.55%
2.45
0.00%
0.00%
3.22
38.94%
63.77%
8.72%
1.04
27.66%
1.35%
3.49
45.76%
84.35%
Dividend /
Company
ROA
Dividend /
Tobin's Q
Debt /
Debt /
Assets
Equities
Z score
Earning
Sales
8.40%
1.72
39.66%
6.90%
19.13%
23.66%
11.49%
2.83
110.45%
19.35%
12.71
12.32%
14.06%
3.45%
1.25
48.22%
1.43%
1.97
52.53%
110.67%
2.16%
6.36
41.56%
0.24%
4.14
74.83%
297.34%
9.96%
1.40
41.25%
4.55%
4.02
23.62%
30.92%
6.35%
0.82
10.48%
0.81%
2.13
50.78%
103.15%
3.95%
0.61
18.23%
0.72%
1.97
47.83%
91.69%
11.08%
2.18
32.37%
5.68%
4.42
19.40%
24.07%
0.01%
0.96
12316.50%
0.43%
3.11
36.46%
57.38%
GAMUDA BHD
3.72%
3.14
181.32%
22.17%
2.21
40.00%
66.68%
GENTING BHD
6.60%
65.00
49.91%
11.70%
3.53
28.58%
40.01%
0.76%
0.59
81.68%
1.35%
4.5
17.95%
21.88%
4.89%
0.70
32.49%
7.92%
3.42
11.89%
13.49%
8.58%
2.58
152.32%
11.24%
5.7
17.02%
20.51%
7.54%
3.20
8.25%
0.46%
3.12
56.32%
128.96%
3.37%
1.09
62.82%
4.16%
3.55
13.77%
15.97%
HOVID BHD
5.28%
2.65
25.01%
2.85%
1.89
57.51%
135.35%
7.52%
1.99
32.73%
6.88%
2.61
46.39%
86.53%
3.06%
1.20
90.76%
2.24%
3.43
26.53%
36.11%
Dividend /
Company
ROA
Dividend /
Tobin's Q
Debt /
Debt /
Assets
Equities
Z score
Earning
Sales
I-BHD
1.16%
1.20
109.13%
52.29%
5.6
10.56%
11.80%
3.22%
3.12
27.21%
5.53%
2.53
35.62%
55.33%
0.58%
2.06
117.17%
1.78%
2.03
28.05%
38.99%
IPMUDA BHD
0.79%
0.89
0.00%
0.00%
2.45
63.51%
174.05%
JAYCORP BHD
6.44%
1.30
32.73%
1.41%
3.35
38.92%
63.72%
-3.34%
0.48
-38.00%
1.75%
2.24
29.22%
41.29%
9.82%
15.50
0.00%
0.00%
5.24
62.21%
164.65%
15.60%
24.63
7.22%
1.11%
7.08
53.63%
115.64%
6.41%
3.10
28.27%
1.89%
2.18
53.38%
114.49%
17.27%
2.00
19.88%
8.44%
6.6
14.26%
16.63%
2.24%
0.90
0.00%
0.00%
9.59
5.01%
5.28%
LANDMARKS BHD
37.86%
2.32
1.26%
14.28%
3.45
18.98%
23.42%
LB ALUMINIUM BHD
4.53%
0.86
32.74%
1.40%
2.44
43.70%
77.63%
0.48%
0.40
0.00%
0.00%
0.99
66.66%
199.90%
8.16%
2.70
12.69%
1.98%
2.28
46.38%
86.49%
9.66%
2.54
3.05%
0.36%
2.1
49.93%
99.73%
2.59%
0.91
88.71%
1.91%
3.15
26.95%
36.89%
23.84%
6.72
232.44%
32.28%
12.99
15.86%
18.84%
-12.38%
1.24
0.00%
0.00%
20.12
5.28%
5.58%
Dividend /
Company
ROA
Dividend /
Tobin's Q
Debt /
Debt /
Assets
Equities
Z score
Earning
Sales
8.47%
3.84
0.00%
0.00%
3.01
60.74%
154.69%
24.89%
17.44
58.76%
52.62%
8.07
18.90%
23.30%
8.28%
17.40
60.40%
5.36%
3.84
39.23%
64.56%
8.09%
1.21
16.39%
1.88%
2.78
30.14%
43.14%
METACORP BHD
15.22%
0.98
6.28%
5.87%
3.36
15.17%
17.88%
2.07%
0.87
33.98%
0.82%
1.55
52.11%
108.79%
5.14%
0.70
12.33%
0.56%
1.97
41.68%
71.46%
0.00%
0.74
0.00%
0.00%
2.2
23.33%
30.42%
7.11%
0.88
55.58%
3.99%
10.12
6.87%
7.37%
-30.44%
0.17
0.00%
0.00%
0.78
30.17%
43.20%
11.35%
0.98
13.05%
3.35%
3.54
39.38%
64.96%
OCB BHD
0.51%
0.72
81.56%
0.40%
2.16
47.97%
92.19%
16.11%
6.56
46.09%
4.57%
5.34
26.78%
36.57%
7.41%
2.18
29.02%
4.77%
2.71
30.74%
44.38%
2.09%
0.76
35.78%
0.50%
2.36
51.57%
106.50%
6.06%
3.32
26.94%
2.10%
2.22
66.53%
198.78%
2.12%
0.89
13.48%
1.58%
1.63
29.68%
42.21%
PHARMANIAGA BHD
5.69%
3.24
32.04%
1.36%
2.63
58.80%
142.72%
4.38%
1.01
28.98%
1.29%
3.02
43.61%
77.34%
Dividend /
Company
ROA
Dividend /
Tobin's Q
Debt /
Debt /
Assets
Equities
Z score
Earning
Sales
-2.70%
3.40
-172.22%
6.75%
4.2
30.94%
44.80%
4.09%
1.02
98.18%
3.93%
2.02
55.85%
126.52%
4.52%
1.28
15.73%
0.75%
1.8
61.70%
161.08%
8.44%
2.10
29.91%
4.30%
2.67
39.98%
66.62%
16.65%
33.06
15.74%
5.63%
13.33
12.26%
13.97%
-1.53%
0.60
0.00%
0.00%
1.21
23.86%
31.33%
1.67%
0.65
25.23%
1.48%
0.65
49.33%
97.37%
7.50%
2.38
33.04%
6.21%
3.67
24.62%
32.66%
2.32%
0.22
0.00%
0.00%
1.29
60.06%
150.37%
3.26%
1.78
58.23%
2.22%
4.53
12.95%
14.87%
10.27%
3.46
72.04%
15.12%
5.48
25.97%
35.08%
4.57%
2.09
46.47%
9.47%
1.4
69.68%
229.84%
2.66%
1.28
55.40%
0.79%
2.55
66.99%
202.91%
4.66%
2.81
8.26%
0.18%
3.2
59.73%
148.33%
19.06%
2.86
19.96%
2.67%
9.92
12.82%
14.71%
9.85%
9.32
26.65%
2.25%
5.71
39.53%
65.37%
1.45%
0.69
0.00%
0.00%
0.85
33.87%
51.22%
-23.55%
2.05
0.00%
0.00%
1.94
62.39%
165.86%
8.11%
1.75
8.06%
0.56%
3.67
38.88%
63.62%
Dividend /
Company
ROA
Dividend /
Tobin's Q
Debt /
Debt /
Assets
Equities
Z score
Earning
Sales
7.84%
3.00
2.63%
0.28%
1.84
58.01%
138.16%
8.57%
1.74
16.16%
2.02%
3.62
23.28%
30.35%
6.97%
2.48
39.61%
4.85%
1.94
51.82%
107.54%
3.76%
1.49
37.85%
4.45%
2.75
27.99%
38.87%
7.94%
1.46
31.87%
3.49%
3.25
25.48%
34.19%
2.49%
1.10
16.42%
0.33%
1.85
59.94%
149.61%
YI-LAI BHD
8.33%
1.90
86.12%
13.49%
7.35
10.94%
12.28%
6.45%
8.68
32.01%
4.49%
2.48
45.52%
83.55%
Company
Market Capital
Shares
Par Value
Sales 2007
Dividend (sen)
253.91
362.73
0.5
115.93
1.1
138.36
134.33
395.5
5.5
1060.29
164.39
584.25
40.2
212
80
154.27
18.3
ASTINO BHD
80.05
128.61
0.5
289.06
3.7
208.02
158.79
0.5
452.24
66.13
82.67
612.55
3.7
BOLTON BHD
285.53
320.82
325.33
1.8
12206.41
285.53
0.5
3830.87
329
1259.68
305.75
0.5
897.53
27
258.91
272.53
0.5
389.8
211.56
100.75
630.35
7.3
45
75
179.03
355.52
215.01
99.81
7.3
147.86
301.75
0.2
128.36
Company
Market Capital
Shares
Par Value
Sales 2007
Dividend (sen)
64.48
124
0.5
275.23
290.72
168.95
176.2
7.2
174.97
61.83
65.2
20.4
148.87
119.1
500.59
858.9
270
0.5
9740.49
8.8
92.4
132
0.5
124.66
4.3
295.85
363
669.68
1.5
51.17
83.88
466.57
177.22
81.3
157.31
11
78.82
82.11
571.65
GAMUDA BHD
6286.72
2001.35
1516.36
16.8
GENTING BHD
24073.17
3703.56
0.1
8483.82
26.8
40.96
138.86
0.5
51.34
0.5
137.9
197
54.7
2.2
1606.46
622.66
2244.46
40.5
523.84
327.4
0.5
1281.05
1.8
97.16
178.28
0.5
124.2
2.9
HOVID BHD
201.95
762.08
0.1
186.86
0.7
Company
Market Capital
Shares
Par Value
Sales 2007
Dividend (sen)
281.11
141.12
186.73
9.1
72
60
193.12
7.2
I-BHD
127.68
106.4
4.07
2324.34
1489.72
0.5
673.93
2.5
217.24
210.91
0.5
130.35
1.1
IPMUDA BHD
64.5
72.47
619.55
JAYCORP BHD
89.21
137.25
0.5
282.94
2.9
31.67
65.98
82.88
2.2
1398.1
902
0.1
824.28
6445.47
1046.58
0.25
1230.12
1.3
644.38
207.75
1108.31
10.1
355.49
355.45
0.5
278.09
6.6
200.76
223.07
20.35
LANDMARKS BHD
1115.18
480.68
50.5
1.5
LB ALUMINIUM BHD
106.84
248.47
0.5
318.87
1.8
154.08
385.19
288.39
890.5
659.63
0.5
1629.59
4.9
936.27
737.22
0.5
5171.68
2.5
Company
Market Capital
Shares
Par Value
Sales 2007
Dividend (sen)
94.77
103.58
201
3.7
4801.88
1429.13
0.5
2953.07
66.7
80.82
130.36
0.5
19.8
6416.61
1670.99
14686.13
4360
1000
0.25
608.14
32
1730.46
198.9
0.5
1485.33
40
289.45
239.21
471.81
3.7
METACORP BHD
332.85
679.28
0.5
81.03
0.7
123.93
284.91
0.5
696.02
125.3
179
482.34
1.5
459.88
621.47
465.35
52.9
60.12
73.88
4.9
16.88
99.27
103.55
58.8
60
125.51
OCB BHD
74.05
102.85
468.29
1.8
431.59
131.58
0.5
316.87
11
234.57
107.56
300.08
13.3
45.61
60.01
417.05
3.5
Company
Market Capital
Shares
Par Value
Sales 2007
Dividend (sen)
956.39
288.07
1194.99
8.7
88.5
100
113.79
1.8
PHARMANIAGA BHD
346.56
106.96
1183.98
15
207.23
410.35
0.5
414.24
1.3
912.45
536.74
0.5
859.33
10.8
92.3
180.98
0.5
455.76
9.9
87.9
137.86
0.5
549.12
601.4
286.38
466.38
19274.56
5830.12
0.1
4352.33
4.2
66.05
110.09
70.97
55.21
84.94
86.3
1.5
1047.2
440
410.73
5.8
45.14
209.94
204.85
243.74
136.93
370.16
2555.43
738.56
805.87
16.5
6331.12
403.26
7.5
2721.65
63.9
158.85
124.1
1258.57
192.5
68.5
1948.32
5.1
Company
Market Capital
Shares
Par Value
Sales 2007
Dividend (sen)
364.46
127.43
487.68
10.2
1402.03
300.73
0.5
1228.78
9.2
763.16
1106.02
417.17
553.74
270.12
616.23
244.88
139.8
422.07
1.7
4164.26
1388.09
6978.67
1.4
107.88
123.91
0.5
110.58
1.8
584.59
471.44
0.5
972.48
10
360.07
241.65
396.77
7.3
97.14
66.54
139.29
7.3
68.97
62.7
507.9
2.7
152
160
0.5
112.65
9.5
2038.09
469.61
0.5
1150.04
11
YI-LAI BHD
YTL CEMENT BHD
Independent
Member
Board
Company
Widely Held
CEO Duality
ASTINO BHD
BOLTON BHD
12
10
11
Total Board
Independent
Member
Board
Company
Widely Held
CEO Duality
10
11
GAMUDA BHD
14
GENTING BHD
Total Board
Independent
Member
Board
10
Company
Widely Held
CEO Duality
11
HOVID BHD
10
I-BHD
13
IPMUDA BHD
JAYCORP BHD
10
Total Board
Independent
Member
Board
Company
Widely Held
CEO Duality
LANDMARKS BHD
LB ALUMINIUM BHD
12
METACORP BHD
Total Board
Independent
Member
Board
Company
Widely Held
CEO Duality
11
OCB BHD
PHARMANIAGA BHD
11
10
Total Board
Independent
Member
Board
Company
Widely Held
CEO Duality
10
12
10
Total Board
Independent
Member
Board
Company
Widely Held
CEO Duality
YI-LAI BHD
15
TDI
TDI Board
TDI Disclosure
TDI Shareholding
15
15
16
17
ASTINO BHD
14
16
16
BOLTON BHD
18
21
18
16
19
12
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
15
15
15
16
15
16
18
17
18
14
15
13
GAMUDA BHD
16
GENTING BHD
20
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
18
13
19
14
12
HOVID BHD
13
15
16
I-BHD
15
18
13
IPMUDA BHD
14
JAYCORP BHD
15
12
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
16
16
19
18
12
LANDMARKS BHD
18
LB ALUMINIUM BHD
19
15
19
18
15
18
15
20
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
16
16
16
METACORP BHD
17
16
18
13
20
13
18
OCB BHD
18
17
20
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
13
20
15
PHARMANIAGA BHD
19
15
17
15
11
19
19
14
21
18
13
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
16
15
19
17
12
17
19
15
15
14
19
15
17
18
Company
TDI
TDI Board
TDI Disclosure
TDI Shareholding
16
14
YI-LAI BHD
14
18