Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares
Purpose – This paper aims to investigate the value of information content and informativeness of the analyst report for Sharīʿah-compliant shares in Malaysia. Design/methodology/approach – The authors use a sample of 657 daily published analyst reports on Sharīʿah-compliant shares from 2010 to 2015...
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2020
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Online Access: | http://irep.iium.edu.my/84730/1/Hassanudin%20Azhar%20Nazrol%20Jarita%20JIABR%202020.pdf http://irep.iium.edu.my/84730/ https://www.scopus.com/inward/record.uri?eid=2-s2.0-85082917476&doi=10.1108%2fJIABR-05-2017-0065&partnerID=40&md5=449760fee14b018e077e3ead18ffe810 https://doi.org/10.1108/JIABR-05-2017-0065 |
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my.iium.irep.847302020-11-14T15:27:07Z http://irep.iium.edu.my/84730/ Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares Mohd Thas Thaker, Hassanudin Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita HG3368 Islamic Banking and Finance HG4501 Stocks, investment, speculation Purpose – This paper aims to investigate the value of information content and informativeness of the analyst report for Sharīʿah-compliant shares in Malaysia. Design/methodology/approach – The authors use a sample of 657 daily published analyst reports on Sharīʿah-compliant shares from 2010 to 2015, which were downloaded from Bursa Malaysia’s repository system. The method was quantitative in nature and panel regression analysis was used. Diagnostics tests including the variance inflation factor, correlation analysis, heteroskedasticity test, serial auto correlation and the Hausman test were performed to ensure validity and reliability of data. The significance of the variables indicated whether the analyst reports contained valuable information on Shariah compliancy. Findings – Results obtained from the FEM-Robust model revealed that the R2 value was equivalent to 0.79 per cent, suggesting that the power of return explained by the information content and informativeness was less for Sharīʿah-compliant shares. The F-statistics were statistically significant for all models, postulating that the data used were reliable and fit for the purpose of analysis. The findings showed that the information content of target price and earnings forecasts significantly influenced the returns of Sharīʿah-compliant shares. In terms of informativeness, return on equity, sales to price ratio and cash flow to price were associated with the returns of the shares. Practical implications – The outcome from this finding confirmed that the analyst report retained its position as a good source of reference when making investment decisions. However, the disclosure of information in the form of qualitative information together with fundamental information should be enhanced for Sharīʿah-compliant share so that investors would have adequate information when making an investment decision. Originality/value – This study will supply more insights into the matter of information content and informativeness of the analyst report in Malaysia by focussing on Sharīʿah-compliant shares, which is practically an underexplored research area in Malaysia. Emerald Group Publishing Ltd. 2020-01-02 Article PeerReviewed application/pdf en http://irep.iium.edu.my/84730/1/Hassanudin%20Azhar%20Nazrol%20Jarita%20JIABR%202020.pdf Mohd Thas Thaker, Hassanudin and Mohamad, Azhar and Mustaffa Kamil, Nazrol Kamil and Duasa, Jarita (2020) Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares. Journal of Islamic Accounting and Business Research, 11 (3). pp. 869-888. ISSN 1759-0817 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85082917476&doi=10.1108%2fJIABR-05-2017-0065&partnerID=40&md5=449760fee14b018e077e3ead18ffe810 https://doi.org/10.1108/JIABR-05-2017-0065 |
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HG3368 Islamic Banking and Finance HG4501 Stocks, investment, speculation Mohd Thas Thaker, Hassanudin Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita Information content and informativeness of the analyst report in Malaysia: Evidence from Sharīʿah-compliant shares |
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Purpose – This paper aims to investigate the value of information content and informativeness of the analyst report for Sharīʿah-compliant shares in Malaysia.
Design/methodology/approach – The authors use a sample of 657 daily published analyst reports on Sharīʿah-compliant shares from 2010 to 2015, which were downloaded from Bursa Malaysia’s repository system. The method was quantitative in nature and panel regression analysis was used. Diagnostics tests including the variance inflation factor, correlation analysis, heteroskedasticity test, serial auto correlation and the Hausman test were performed to ensure validity and reliability of data. The significance of the variables indicated whether the analyst reports contained valuable information on Shariah compliancy.
Findings – Results obtained from the FEM-Robust model revealed that the R2 value was equivalent to 0.79 per cent, suggesting that the power of return explained by the information content and informativeness was less for Sharīʿah-compliant shares. The F-statistics were statistically significant for all models, postulating that the data used were reliable and fit for the purpose of analysis. The findings showed that the information content of target price and earnings forecasts significantly influenced the returns of Sharīʿah-compliant shares. In terms of informativeness, return on equity, sales to price ratio and cash flow to price were associated with the returns of the shares.
Practical implications – The outcome from this finding confirmed that the analyst report retained its position as a good source of reference when making investment decisions. However, the disclosure of information in the form of qualitative information together with fundamental information should be enhanced for Sharīʿah-compliant share so that investors would have adequate information when making an investment decision.
Originality/value – This study will supply more insights into the matter of information content and informativeness of the analyst report in Malaysia by focussing on Sharīʿah-compliant shares, which is practically an underexplored research area in Malaysia. |
format |
Article |
author |
Mohd Thas Thaker, Hassanudin Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita |
author_facet |
Mohd Thas Thaker, Hassanudin Mohamad, Azhar Mustaffa Kamil, Nazrol Kamil Duasa, Jarita |
author_sort |
Mohd Thas Thaker, Hassanudin |
title |
Information content and informativeness of the analyst
report in Malaysia: Evidence from Sharīʿah-compliant shares |
title_short |
Information content and informativeness of the analyst
report in Malaysia: Evidence from Sharīʿah-compliant shares |
title_full |
Information content and informativeness of the analyst
report in Malaysia: Evidence from Sharīʿah-compliant shares |
title_fullStr |
Information content and informativeness of the analyst
report in Malaysia: Evidence from Sharīʿah-compliant shares |
title_full_unstemmed |
Information content and informativeness of the analyst
report in Malaysia: Evidence from Sharīʿah-compliant shares |
title_sort |
information content and informativeness of the analyst
report in malaysia: evidence from sharīʿah-compliant shares |
publisher |
Emerald Group Publishing Ltd. |
publishDate |
2020 |
url |
http://irep.iium.edu.my/84730/1/Hassanudin%20Azhar%20Nazrol%20Jarita%20JIABR%202020.pdf http://irep.iium.edu.my/84730/ https://www.scopus.com/inward/record.uri?eid=2-s2.0-85082917476&doi=10.1108%2fJIABR-05-2017-0065&partnerID=40&md5=449760fee14b018e077e3ead18ffe810 https://doi.org/10.1108/JIABR-05-2017-0065 |
_version_ |
1684653095854800896 |
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13.154949 |