The UMS-PEREKA (UMS Research & Innovation Competition) 2013 edition was successfully held last September at New DKP, Universiti Malaysia Sabah. The event was graced by the Sabah’s Assistant Minister of Tourism, Culture and Environment Datuk Kamarlin Ombi who represented his minister Datuk Masidi Manjun. UMS PEREKA serves as a platform for UMS researchers to showcase and promote their research findings and new prototype. Besides, it is also to foster and nurture the culture of Research, Development and Commercialization.
It is a poster presentation concept and as a novice researcher I was a bit nervous when presenting my research in front of the two judges. Note that this is my first time joining PEREKA. There I presented two papers and Alhamdulillah both clinched 2 gold medals for research category (Business and Economics).
CAPITAL STRUCTURE DECISIONS: EVIDENCE FROM LARGE CAPITALIZED COMPANIES IN MALAYSIA
This study aimed to determine the factors influencing the capital structure decisions in Malaysia using the companies listed on the FTSE Bursa Malaysia Top 100 Index. The objectives of this study were achieved by examining the relationship between leverage (dependent variable) and four determinants identified as independent variables, which included profitability, tangibility, liquidity and firm size. Data of 69 firms which covered the period from 2007 to 2011 were evaluated using the panel data analysis with total observations of 345 firm-years. By applying the fixed effects regression model, results showed that profitability, tangibility and liquidity had significant negative relationship with leverage while firm size is positively related with leverage. Moreover, results also revealed that profitability was the most influential factor of the capital structure in Malaysia. The findings of this study were consistent with several previous studies as well as the theoretical background of capital structure determinants. These findings could help financial managers make a better capital structure decisions. In addition, they would also be able to determine the best combination of debt and equity that could minimizes the cost of capital, while at the same time maximizing the stock price of the firm in which contribute towards positive impact to the economic growth. It also may represent the unique characteristics of capital structure of firms in Malaysia.
ARE MALAYSIAN INVESTORS RATIONAL DECISION MAKERS?: A CASE IN KOTA KINABALU, SABAH
Since the past three decades, numerous contributions has been made by the traditional finance proponents in assisting investors making good investment decisions assuming that they are rational decision makers, and unbiased towards predicting the future. Nevertheless, proponents of behavioural finance argued that people act in irrational manner and often make predictable errors in their forecasts thus violated these assumptions. For instance, risk-seeking behaviour was patently obvious (by looking at their willingness to buy lottery tickets) when traditional finance assumes that people are risk-averse (Ackert and Deaves, 2010). Market anomalies and crashes are some of the examples that explain the existence of psychological bias that lead to inefficient outcomes. When it comes to investing, different investors would have different investment style and strategy, depending on their objectives. Some don’t even have strategy and would rather ask for ‘hot tips’ or listening to rumours. In other words, they tend to be irrational when making investment decision which further causes mispricing, discourage trading among market participants and contribute towards market inefficiencies. Thus, the main objective of this research is to study the factors that influence investors’ decision making style in Kota Kinabalu, Sabah. It aims to determine whether investors in Sabah are rational, irrational or partly rational in making investment decision. The research would give the general insights on the behaviour of local investors and will assist the effort to further enhance the Malaysian capital market and economy as a whole.