The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity

In 2003, Bursa Malaysia announced that the minimum number of shares per board lot Would be reduced from 1000 or 200 units to 100 units to eliminate odd-lot holdings And promote market liquidity. The initiative was implemented the same year, Completed in three stages, and was declared successful. To...

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Main Author:	Nor Elliany Hawa, Ibrahim
Format:	Thesis
Language:	eng eng
Published:	2023
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/11157/1/depositpermission.pdf https://etd.uum.edu.my/11157/2/s94400_01.pdf
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id	my-uum-etd.11157
record_format	uketd_dc
spelling	my-uum-etd.111572024-06-10T02:35:11Z The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity 2023 Nor Elliany Hawa, Ibrahim Taufil Mohd, Kamarun Nisham Hwei, Khaw Lee School of Economics, Finance & Banking School of Economics, Finance and Banking HG Finance In 2003, Bursa Malaysia announced that the minimum number of shares per board lot Would be reduced from 1000 or 200 units to 100 units to eliminate odd-lot holdings And promote market liquidity. The initiative was implemented the same year, Completed in three stages, and was declared successful. To verify this claim, this study Uses event study methodology to examine the impact of the announcement and Implementation of the standardisation of trading board lot (STBL) event on stock Returns and liquidity. The findings show a negative market reaction on the day of the STBL announcement, which may be attributed to the unprecedented event factor and The lack of information released on that day. On the contrary, the study finds positive Market reactions during the STBL implementation event and significant improvement In stock liquidity, suggesting positive market reception towards the new policy. Furthermore, the lot size reduction is found to significantly improve stock liquidity. In Addition, this study examines bonus issue announcement events from 2000 to 2013. The event is shown to result in higher returns, volume turnover and a narrower bidask. The positive response implies that the bonus issue is viewed as value-enhancing, And managers might utilise the event to signal their positive expectations and private Information to the public. Short-term investors should earn a higher return by holding Long positions for several days during events in which firms declare their intentions to Issue bonus shares or comply with a newly enacted policy. This study also discovers That in the post-STBL implementation period, the weakened market reaction is Believed to be due to the redundancy effect of the STBL and bonus issue events. This Study proposes that the trading board lot system should be discontinued, allowing all Units of shares to be traded as a single unit, and making expensive stocks more Affordable to retail investors. 2023 Thesis https://etd.uum.edu.my/11157/ https://etd.uum.edu.my/11157/1/depositpermission.pdf text eng staffonly https://etd.uum.edu.my/11157/2/s94400_01.pdf text eng public phd doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Taufil Mohd, Kamarun Nisham Hwei, Khaw Lee
topic	HG Finance
spellingShingle	HG Finance Nor Elliany Hawa, Ibrahim The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity
description	In 2003, Bursa Malaysia announced that the minimum number of shares per board lot Would be reduced from 1000 or 200 units to 100 units to eliminate odd-lot holdings And promote market liquidity. The initiative was implemented the same year, Completed in three stages, and was declared successful. To verify this claim, this study Uses event study methodology to examine the impact of the announcement and Implementation of the standardisation of trading board lot (STBL) event on stock Returns and liquidity. The findings show a negative market reaction on the day of the STBL announcement, which may be attributed to the unprecedented event factor and The lack of information released on that day. On the contrary, the study finds positive Market reactions during the STBL implementation event and significant improvement In stock liquidity, suggesting positive market reception towards the new policy. Furthermore, the lot size reduction is found to significantly improve stock liquidity. In Addition, this study examines bonus issue announcement events from 2000 to 2013. The event is shown to result in higher returns, volume turnover and a narrower bidask. The positive response implies that the bonus issue is viewed as value-enhancing, And managers might utilise the event to signal their positive expectations and private Information to the public. Short-term investors should earn a higher return by holding Long positions for several days during events in which firms declare their intentions to Issue bonus shares or comply with a newly enacted policy. This study also discovers That in the post-STBL implementation period, the weakened market reaction is Believed to be due to the redundancy effect of the STBL and bonus issue events. This Study proposes that the trading board lot system should be discontinued, allowing all Units of shares to be traded as a single unit, and making expensive stocks more Affordable to retail investors.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Nor Elliany Hawa, Ibrahim
author_facet	Nor Elliany Hawa, Ibrahim
author_sort	Nor Elliany Hawa, Ibrahim
title	The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity
title_short	The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity
title_full	The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity
title_fullStr	The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity
title_full_unstemmed	The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity
title_sort	effects of standardisation of trading board lot and bonus issue on stock returns and liquidity
granting_institution	Universiti Utara Malaysia
granting_department	School of Economics, Finance & Banking
publishDate	2023
url	https://etd.uum.edu.my/11157/1/depositpermission.pdf https://etd.uum.edu.my/11157/2/s94400_01.pdf
_version_	1804888207478751232

The Effects of Standardisation of Trading Board Lot And Bonus Issue On Stock Returns And Liquidity

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