Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad

Sukuk yields mimic those of conventional bonds due to having similar features. This motivated the study. 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. Agency theo...

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Main Author:	Mohd Saad, Noriza
Format:	Book Section
Language:	English
Published:	Institute of Graduate Studies, UiTM 2018
Subjects:	Corporate organization. Corporate governance
Online Access:	http://ir.uitm.edu.my/id/eprint/20481/ http://ir.uitm.edu.my/id/eprint/20481/1/ABS_NORIZA%20MOHD%20SAAD%20TDRA%20VOL%2013%20IGS%2018.pdf

id	uitm-20481
recordtype	eprints
spelling	uitm-204812018-07-04T07:31:33Z http://ir.uitm.edu.my/id/eprint/20481/ Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad Mohd Saad, Noriza Corporate organization. Corporate governance Sukuk yields mimic those of conventional bonds due to having similar features. This motivated the study. 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. Agency theory explains the relationship between principal and agent and the possible misalignment of interest of both parties is reflected through what is termed agency cost. Reducing this agency cost requires monitoring and controlling in public listed firms which are represented by institutional investors which delegate this responsibility to the appointed board of directors (BOD). The presence of key institutional investors/owners and certain BOD characteristics as highlighted by the Malaysian Code on Corporate Governance (MCCG) may influence the yield to maturity (YTM) of conventional bonds and sukuk. It is argued that higher institutional ownerships will produce enhanced active monitoring on the cost of debt and presumably more control on the likelihood of default risk as measured by the yield spreads for conventional bonds and sukuk. Thus, the main objective of this study is twofold. First, to investigate the significant mean difference between conventional bonds and sukuk’ yield spreads. Second, to investigate the relationship between these two yield spreads instruments with corporate governance mechanisms. The data is obtained from firm issuers’ annual reports, the Bond info Hub of the Malaysian Central Bank, the Rating Agency Malaysia (RAM), the -alaysian Department of Statistics and Bloomberg databases for the period beginning 2000 to 2014 for 256 and 405 tranches of long-term and medium-term issurances of conventional bonds and sukuk respectively… Institute of Graduate Studies, UiTM 2018 Book Section PeerReviewed text en http://ir.uitm.edu.my/id/eprint/20481/1/ABS_NORIZA%20MOHD%20SAAD%20TDRA%20VOL%2013%20IGS%2018.pdf Mohd Saad, Noriza (2018) Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad. In: The Doctoral Research Abstracts. IGS Biannual Publication, 13 (13). Institute of Graduate Studies, UiTM, Shah Alam.
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Corporate organization. Corporate governance
spellingShingle	Corporate organization. Corporate governance Mohd Saad, Noriza Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad
description	Sukuk yields mimic those of conventional bonds due to having similar features. This motivated the study. 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. Agency theory explains the relationship between principal and agent and the possible misalignment of interest of both parties is reflected through what is termed agency cost. Reducing this agency cost requires monitoring and controlling in public listed firms which are represented by institutional investors which delegate this responsibility to the appointed board of directors (BOD). The presence of key institutional investors/owners and certain BOD characteristics as highlighted by the Malaysian Code on Corporate Governance (MCCG) may influence the yield to maturity (YTM) of conventional bonds and sukuk. It is argued that higher institutional ownerships will produce enhanced active monitoring on the cost of debt and presumably more control on the likelihood of default risk as measured by the yield spreads for conventional bonds and sukuk. Thus, the main objective of this study is twofold. First, to investigate the significant mean difference between conventional bonds and sukuk’ yield spreads. Second, to investigate the relationship between these two yield spreads instruments with corporate governance mechanisms. The data is obtained from firm issuers’ annual reports, the Bond info Hub of the Malaysian Central Bank, the Rating Agency Malaysia (RAM), the -alaysian Department of Statistics and Bloomberg databases for the period beginning 2000 to 2014 for 256 and 405 tranches of long-term and medium-term issurances of conventional bonds and sukuk respectively…
format	Book Section
author	Mohd Saad, Noriza
author_facet	Mohd Saad, Noriza
author_sort	Mohd Saad, Noriza
title	Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad
title_short	Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad
title_full	Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad
title_fullStr	Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad
title_full_unstemmed	Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad
title_sort	corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / noriza mohd saad
publisher	Institute of Graduate Studies, UiTM
publishDate	2018
url	http://ir.uitm.edu.my/id/eprint/20481/ http://ir.uitm.edu.my/id/eprint/20481/1/ABS_NORIZA%20MOHD%20SAAD%20TDRA%20VOL%2013%20IGS%2018.pdf
first_indexed	2023-09-18T23:04:42Z
last_indexed	2023-09-18T23:04:42Z
_version_	1777418405643550720

Corporate governance mechanisms, institutional ownership and yield spreads of conventional bonds and sukuk / Noriza Mohd Saad

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