2015

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    FACTORS CONTRIBUTING TO THE CHOICE OF EVALUATION TECHNIQUE FOR INVESTMENT DECISIONS IN PAKISTAN
    (UMT, Lahore, 2015) Akeela maryam
    The rationale of this research was to discover the most significant factor which can affect the decision regarding selection of capital budgeting technique in reference of manufacturing and services industry of Pakistan. This research also tested the relationship between independent variables; Size, uncertainty, reward, industry type, education/training, legal status, specific option situation and firms strategy with dependent variable capital budgeting. This is quantitative research. Linear multiple regression was technique to test hypotheses of this research via SPSS. Data is compiled by one ninety one respondent companies listed at KSE and LCCI through postal questionnaires. The results suggest that education or training methods and specific options of firm doesn’t affect the selection of capital budgeting techniques, while size, legal status, compensation/reward system, industry type, firms strategy and uncertainty directly affects the use of these methods. Research model can be regenerated for the more detail and a comparative study between two sectors can be conducted by using t-test in future. Normality and generalization of data are most important limitations.
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    Foreign Direct Investment and its Causal Relationship with Economic Growth, Human Resource Development, Economic Competitiveness and Corruption
    (UMT, Lahore, 2015) Mohyuddin Tahir Mahmood
    This research indicated the foreign direct investment inward in SAARC region and then studied the causal relationship of FDI inward with the three different indexes (i.e human development index, competitive index and corruption index) and also investigated the impact of FDI inward on economic growth. The main focus of this thesis is SAARC member states. Panel data was used as sample data that consists of observations from a number of countries in time series manner. Five countries (Pakistan, Nepal, Sri-Lanka, India and Bangladesh) from South Asian Association for Regional Cooperation covering period of 1995-2012 were selected. Fixed effect and random effect models were used for data analyses to draw conclusions. Economic competitiveness had strong negative relationship with foreign direct investment. Corruption showed negative strong relationship with foreign direct investment. Human resource development has a positive relationship with foreign direct investment inward. Foreign direct investment inward has a negative effect on the economic growth but the coefficient value 7.75E-11 shows this effect is so minor that it can be considered as no effect.
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    An Empirical Analysis of Banking Sector in Pakistan
    (UMT, Lahore, 2015-07-15) Bushra Shafiq
    Purpose – The purpose of this research study is to determine the impact of service quality being provided by the Islamic and Conventional banks on customer‟s judgments towards their satisfaction level on different parameters of Islamic banks in the region of Lahore, Pakistan. Design/Methodology/Approach – A preliminary questionnaire has been employed to determine the factors of customer satisfaction and SQL in both banking streams in Pakistan. A questionnaire was formulated to obtained data from the 300 respondents using a convenience sampling technique. T-tests, correlation , ANOVA and regression analysis used to test the extent of relationship among SQL and CS for the both banking sectors of Pakistan. Findings – The consequences depicts that there is a strong positive association among SQL and CS in the banking segment. Further results illustrates that the extent of affiliation among SQL and CS is larger in Islamic banks as contrasted to conventional banks. Originality/Value/Implications – In Pakistan, there are fewer studies that raised the issue of SQL and CS in Islamic and Conventional banks within in a single study. Also, as Islamic banking is a new phenomena which is getting increasing market share in terms of market size and deposits, so this comparison is also of great importance. This study has a number of inferences for bankers, policy makers and academicians.
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    Financial Leverage and Investment Pattern in Capital Expenditure A case of Non-Financial Companies of SAARC Countries
    (UMT, Lahore, 2015-07-18) Muhammad Mukarrum
    This thesis was aimed to test the investment pattern for non-financial companies of SAARC Countries. For this purpose five SAARC countries were taken including; Pakistan, India, Bangladesh, Sri Lanka and Maldives. Other SAARC countries were not included because of unavailability of the data. In this study two type of leverage were used; one is Total Debts divided by Total Assets and second is Long Term Debts divided by Total Assets. This Study applies Linear Regression and Generalized Least Square Method (GLS). In Linear Regression there was a problem of heteroscedasticity in the data. So GLS was applied to see the unbiased results. This study gives three important findings; first individual countries companies‟ data was analyzed. Secondly the comparative analysis was applied among five SAARC countries‟ companies. Thirdly investment pattern was analyzed with low growth and high growth firms for selected five countries. It was found that leverage one (Total Debts/ Total Assets) is negatively influencing to investment in case of Pakistan & India but in case of Sri Lanka, Bangladesh and Maldives leverage one is positively influencing. The second type of leverage (Long Term Debts/Total Assets) is influencing negatively to investment in all selected countries except for Bangladesh in which leverage two is positively influencing. For low growth and high growth firms the influence of leverage is different for different countries.
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    Predicting stock price movement in Pakistan,Comparison between Artificial Neural Network Models and Traditional Linear Models
    (UMT, Lahore, 2015-08) Muhammad Abubakr Naeem
    Since the establishment of the Karachi Stock Exchange (KSE) in 1993, Pakistan’s stock markets have expanded rapidly. Although this rapid growth has attracted considerable academic interest, few studies have examined the ability of conventional financial models to predict the share price movements of stocks. This gap in the literature is significant, given the volatility of the Pakistani stock market and the additional risk arising from the political and regulatory environs of Pakistan, we examine the relative ability of Hybrid Artificial Neural Networks models to forecast stock returns. In this research, the gap is attended by comparing the predictive ability of three linear models i.e. Univariate ARIMA model, Multivariate CAPM model and Multivariate three factor model. Furthermore, we compared these three linear models with the equally specified artificial neural network models containing the same predictor variables. One of the advantages of artificial neural networks is that they relax the model linearity assumption. The analysis conducted is based on the data from Karachi Stock Exchange, containing data for companies from the period of 2010-2014. The results of the research designate that the multivariate models i.e. the dynamic CAPM and the dynamic three factor model surpass the univariate model, that only incorporate lagged returns of stock prices, in forecasting future returns. Additionally, using the artificial neural networks notably enhance the predictive ability using the same predictor variables. Also, irrespective of the linear or non-linear model used, there is significant difference in the forecasting accuracy of univariate ARIMA, multivariate CAPM and multivariate FF3 model.
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    Investigation of performance and volatility of Pakistani Conventional mutual funds
    (UMT, Lahore, 2015-08) Muhammad Adnan Izhar
    Purpose: The main purpose of this research is to investigate the differences in terms of performance and volatility between conventional and Islamic mutual fund in the context of Pakistani capital market. The study determines the mutual funds that an investor considers significant while making his investment. Design/methodology/approach: To achieve the objectives of this research standard method used for evaluating the mutual funds performance and volatility, for example, ARCH/ GARCH model. Secondary data used in research and 5 equity based mutual funds taken from conventional sector as well as from Islamic sector. This study covered the time period from 2007 to 2013. KSE-30 Index used as benchmark for conventional mutual funds and KMI-30 Index used as benchmark for Islamic mutual funds. Findings: The study concludes that KMI-30 index is more volatile than all Islamic mutual funds and market gave high positive returns as compared to Islamic mutual funds and KSE-30 index is highly volatile than all conventional mutual funds and gave more positive returns than all mutual funds. The overall performance of conventional mutual funds is better than the Islamic mutual funds because conventional mutual funds gave high positive returns and majority of returns of Islamic mutual funds were in negative. The conventional mutual funds of Pakistan are more volatile than Islamic mutual funds as it can be seen through GARCH parameters. Research limitations/implications: The main limitation is that the samples of conventional and Islamic mutual funds were from equity side. The findings could be better validated if the sample includes the other types of mutual funds. Practical implications: The study assist decision making specialists to have a better look at efficient ways of selecting mutual fund’s techniques. The research findings expected to be useful to the financial institutions, managers as well as practitioners in the area of investment decision-making. Investors may get benefit by this research that where they have to invest to secure their investment. Originality/value: So far there is no published evidence on the relative performance and volatility of equity based conventional and Islamic mutual funds in Pakistan. Therefore, this study adds new knowledge to the literature of mutual funds
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    Impact of Political News on Stock Market
    (UMT, Lahore, 2015-08-13) Kaneez Aisha
    The objective of this research study is to examine the impact of political events on the stock market performance in Pakistan. In this study event Study Methodology is applied to investigate the impact of each event onKSE-100 index. Statistical technique independent t-test and F-test two samples for variance are applied to examine the impact of political events on stock market. The study focuses on different57 major political events from the period of 2005 to 2014. This study is attempted to determine the relationship between these political events and KSE-100 index by using 13 days event window. This study concludes that out of 57 events only 4 events have significant impact on KSE-100 index, the significant events are those which cause political stability and instability. So, on the basis of analysis it can be said that stock market is not reacting to political event in Pakistan in most cases.
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    Impact of Bank’s Structural Determinants on Banks’ Performance
    (UMT, Lahore, 2015-09-08) Nazik Maqsood
    Purpose/objective: The purpose of conducting this study is to examine the impact of structural determinants on the smaller and larger banks’ performance and to make the comparative analysis of banks’ performance. Design/approach/ methodology: To examine the impact of structural determinants on banks’ performance, bank size (lnTA), liquidity (DEPTA), asset composition (LTA), capital adequacy (CAR), cost management (OCTA), credit risk (LLPTL), productivity (NIETA), efficiency (IELF) are taken as explanatory variables and performance measure (ROAA) is used as dependent variable. To investigate the impact of structural determinants on performance of banks, sample for 7 large banks and 7 small banks is taken from the conventional banks of Pakistan for fourteen years during the period 2001 to 2014. Panel data is used to conduct the analysis. Ordinary least square method, fixed and random effect regression techniques are applied on data. Findings: Results reveal that larger banks of Pakistan have better performance than smaller banks. Results of regression analysis show that bank size (lnTA), asset composition (LTA), productivity (NIETA), capital adequacy (CAR) have positive significant but cost management (OCTA) has negative impact on the performance of large banks. Efficiency (IELF), credit risk (LLPTL) and liquidity (DEPTA) have no significant relation with profitability of large banks. But in case of small banks only three determinants asset composition (LTA) and capital adequacy (CAR) have positive but credit risk (LLPTL) has negative significant relation with performance of small banks.
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    Impact of Macroeconomic Variables on Stock Market Indices
    (UMT, Lahore, 2015-09-15) Saman Rubab
    Purpose − Present study seeks to investigate the impact of macroeconomic variables on stock market indices in case of SAARC countries. Design /Approach/Methodology − Data for dependent variable (stock market index) and independent variables (money supply, inflation, interest rate, gross domestic product, exchange rate and foreign direct investment) is collected covering time period from 1995 to 2014. Ordinary least square regression, fixed effect and random effect techniques are used to examine the impact of macroeconomic variables on stock market indices in case of SAARC countries. Findings − Results of study indicate that money supply, exchange rate, and interest rate have positive and significant relationship with stock market index. Further it is observed that inflation and foreign direct investment have positive but insignificant relationship with stock market index in case of SAARC countries. Originality/Value −This is the first study to observe the impact of macroeconomic variables on stock market indices in case of SAARC countries
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    Financial performance of public & private sector banks of Pakistan
    (UMT, Lahore, 2015-11) Maham Ijaz Abdullah Imtiaz
    This study empirically tries to find out the effect of bank specific factors on banks performance of Pakistani banks and how their performance is different from each other? To achieve this purpose the panel data of 19 (15 private & 4 National Commercial ) banks have been selected as a sample form the year ended 2009 – 2014 on quarterly bases by applying one of the most important technique GMM estimation approach proposed by Arellano and Bond (1991) using E views. The bank specific variables included net NIM, DTAR, CTIR, CAR, SIZE and ATDR. ROA and ROE were used as profitability measures. The results concluded that overall performance of private commercial banks is better than national banks. The earning (NIM), operational efficiency (CTIR) and liquidity ratio (ATDR) are positively correlated with banks profitability (ROA, ROE) in both national and private banks of Pakistan. The DTAR shows negative relationship with the banks (National and private) profitability but in case of national banks the relationship is strong. In all models the capital (CAR) and Size have significant negative effect on banks profitability. The negative relationship between CAR and profitably of the banks shows the risker position of the banks.
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    Impact of Internal Mechanism of Corporate Governance on Firm Performance
    (UMT, Lahore, 2015-11-15) Sabahat Riaz
    The present study investigates the impact of some of the variables of corporate governance on firm performance. Main purpose of the study is to investigate whether corporate governance vary from sector to sector because overall results seem to be misleading on the premise that industrial norms vary from sector to sector and even firm to firm within same sector. For this purpose, a sample of 50% firms has been chosen randomly from top non-financial seven sectors of Pakistan for the years from 2008 to 2014. These sectors have significant role in KSE-100 index fluctuation. Dependent variable is firm performance measured as ROA, ROE and Tobin Q whereas independent variables of corporate governance include Board Size, Board Composition, CEO Compensation and Ownership Concentration. Overall descriptive statistics show that highest board size is 16 with minimum of 7. Board size ranges from 8 to 16 in different sectors. There are certain firms in different sectors where leverage is zero and CEOs do not draw compensation. The empirical results of model summary reveal mixed results of the impact of corporate governance variables on different proxies of firm performance. For instance, board size does not impact firm performance in overall model whereas in engineering and chemicals sector it has positive impact and in Food sector board size has positive affect on Tobin Q & negative impact on ROE. In the same way empirical results show that Board Composition has no significant impact on firm performance in overall model whereas it has positive impact on firm performance in Chemical and Food sector and negative impact on firm performance in Engineering sector.