Government Fiduciary Ownerships and Yield Spreads


Noriza Mohd Saad,



Government ,Fiduciary Bodies ,Conventional Bonds ,Sukuk ,Yield Spreads,


The presence of active institutional investors in monitoring and controlling the management decision making are focus towards public listed firms invested by government fiduciary bodies (Top-6). Institutional investors who are purchased and held the corporate bonds and sukuk rather than individual investors might be a significant factor to bond performance especially on yield to maturity (YTM). As institutional ownerships, supposed they will actively involve in monitoring and pressure more sensitive towards performance of conventional bonds and sukuk. By considering to this issue, the objective of this paper is to investigate the impact of equity ownerships towards bond performance particularly on its yield spreads. Data are obtained from firm issuers’ annual reports, Bondinfo Hub of Malaysia Central Bank, Department of Malaysia Statistics and Bloomberg for the period of 2003 to 2014. Unbalanced Panel data approach is utilized for multivariate regression model covers for OLS, fixed effects and random effects. Results revealed that the presence of top-6 institutional investors have a significant negative impact towards yield spreads. Debt issuers are recommended to offer high bond issuances to this investor since their presence could mitigate cost of defaults by active cost monitoring and controlling which support the agency cost of debt theory.


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