Abstract: In this study, attempt has been made to investigate the
relationship specifically the causal relation between fund unit prices
of Islamic equity unit trust fund which measure by fund NAV and the
selected macro-economic variables of Malaysian economy by using
VECM causality test and Granger causality test. Monthly data has
been used from Jan, 2006 to Dec, 2012 for all the variables. The
findings of the study showed that industrial production index,
political election and financial crisis are the only variables having
unidirectional causal relationship with fund unit price. However the
global oil price is having bidirectional causality with fund NAV.
Thus, it is concluded that the equity unit trust fund industry in
Malaysia is an inefficient market with respect to the industrial
production index, global oil prices, political election and financial
crisis. However the market is approaching towards informational
efficiency at least with respect to four macroeconomic variables,
treasury bill rate, money supply, foreign exchange rate, and
corruption index.
Abstract: This paper examines the relationship between financial
risks and profitability of the conventional and Islamic banks in
Malaysia for the period between 1996 and 2005. The measures of
profitability that have been used in the study are the return on equity
(ROE) and return on assets (ROA) while the financial risks are credit
risk, interest rate risk and liquidity risks. This study employs panel
data regression analysis of Generalised Least Squares of fixed effects
and random effects models. It was found that credit risk has a
significant impact on ROA and ROE for the conventional as well as
the Islamic banks. The relationship between interest rate risk and ROE
were found to be weakly significant for the conventional banks and
insignificant for the Islamic banks. The effect of interest rate risk on
ROA is significant for the conventional banks. Liquidity risk was
found to have an insignificant impact on both profitability measures.