Institutional shareholdings and financial characteristics of Malaysian listed companies

• Main Authors: Abdullah, Shamsul Nahar, Yahya, Mohd Azlan, Elham, Faisol
• Format: Article
• Language: English
• Published: Universiti Utara Malaysia 1999
• Subjects: HF Commerce
• Online Access: http://repo.uum.edu.my/517/1/Shamsul_Nahar_Abdullah.pdf; http://repo.uum.edu.my/517/; http://mmj.uum.edu.my

This study attempts to investigate the extent to which the financial characteristics of firms are related to institutional shareholdings. The primary motivation to carry out the study comes from an earlier paper by hessel and Norman (1992), which showed that seven financial ratios discriminated between strongly-held and institutionally-neglected firms. As an extension of the study, the present study seeks to investigate the seven financial ratios among Malaysian companies by identifiying differences in the means of the seven ratios between a group of companies with substantial institutional shareholdings against another group of companies with negligible institutional shareholdings. The findings, from a sample of KLSE listed companies, broadly support the findings by Hessel and Norman (1992), in which firms with signiificant institutional shareholdings exhibited a significantly higher profitability ratio against firms that were neglected by institutional investors.