MS Banking and Finance

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    WORKPLACE BULLYING AMONG ACADEMICIANS A COMPARATIVE STUDY
    (UMT, Lahore, 2011) SAIMA AHMAD
    Workplace bullying has received increased attention of researchers from the developed countries over the last decade. However, there is little academic research on workplace bullying in developing countries and literally none among highly qualified academicians from developing south Asia. This study aims to explore the prevalence and forms of bullying in a sample of Pakistani university academicians. Relation of demographic variables and bullying behaviors are examined in this study. The nature and role of work environment on the prevalence of bullying and work absenteeism as a potential consequence of bullying are also investigated in this study. The study sample consisted of 380 academicians from the various universities of Punjab (Pakistani Province). The response rate was 57%. Data on workplace bullying prevalence has been measured by using both direct and indirect methods. Academicians with the indirect method indicate a considerably higher incidence of bullying (47.7%) in universities. With direct method only 4.7% academicians acknowledged to have been bullied weekly or more often. Majority of the bullies are seniors. Demographic variables such as age and gender do not seem to have an impact on the incidence of bullying in this study. Association of work absenteeism as a likely consequence of bullying has further been established in this study.
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    Impact of Leverage on Cash Holdings
    (UMT.Lahore, 2014) Shama Urooj
    The study attempts to investigate the cash holding behavior of Pakistani non-financial firms using the data of 100 companies for the period 2009-2014.The study mainly focuses to investigate the effect of leverage on cash holdings. This paper also investigates the behavior of corporate governance variables in the context of cash holdings. The study observes leverage -cash holding relationship of non–financial firms as non – linear. Descriptive statistics show that Pakistani firms hold an average of approximately 9.9% cash. Overall results indicate leverage- cash holding relationship as a negative, one at low level but as leverage increases cash holdings also increase which shows that firm’s decisions regarding borrowing debt have nonlinear impact on firm’s cash holding choices. At high level of leverage, positive connection is observed between cash holdings and leverage indicating this as a reflection of precautionary effect. The results of the study support the previous literature findings regarding their nonlinear relation. The study also shows that there are firm specific as well as corporate governance variables which affect the cash holding decisions of the firms. As a result, while determining the cash holding policy of the firm, both the firm specific and the corporate governance variables play an important and significant role. Investment opportunity (Tobin Q) and institutional ownership are the most prominent firm specific factor and corporate governance variable that have more influence on firm cash holding policies in Pakistan.
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    Impact of Working Capital on Corporate Performance in Seasonal And Non Seasonal Industries
    (UMT.Lahore, 2014) Khalid Munir
    The primary purpose of every commercial activity is profit maximization and firms face internal and external challenges/limitations in achieving this objective. One such limitation in profitability is working capital. This study investigated its impact on profit in seasonal and non seasonal industries and demonstrated significant results. The relationship proved to be positive for seasonal and negative for non seasonal industries and in case of certain industries the relationship was not found significant. The results are important and significant as most of the literature leads us to a negative relationship between working capital and profitability. Study further investigated relationship of various components (receivables, payables and inventories) of working capital with working capital itself. The results indicated that components of working capital displayed a different behavior across industries. In view of positive, negative and some time non significant relationship between working capital and profitability, it becomes a preliminary question that must be answered first of all before making any investment in working capital (to exactly forecast its impact on profitability), what is the basic relationship and its direction between working capital and profitability for any specific industry. Secondly, it needs to be understood that which component (receivables, payables and inventories) of working capital needs to be given priority for investment for yielding good profitability as different component have different relation with working capital across industries. Every industry search for optimal amount which needs to be invested in the working capital that can ensure maximization of profit, which is the foremost one single cause for which all business operates.
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    Investigating the Leverage Composition of MNCs and DCs of Pakistan through their Determinants
    (UMT.Lahore, 2014-04) Farah Yasser
    Purpose – This study seeks to investigate the leverage composition of MNCs and DCs in Pakistan through their determinants Design/methodology/approach – Fixed effect regression is used to show the relationship of determinants of capital structure on leverage for MNCs and DCs listed on Karachi Stock Exchange (KSE) for the period of 2006 to 2011. Findings – The results suggest that agency cost, non debt tax shield and business risk are not significant determinants of capital structure for all types of samples i.e. all firms, DCs and MNCs. Bankruptcy cost is a significant determinant of capital structure for MNCs and otherwise in cases of all firms and DCs. On the other hand, size, growth, free cash flows and collateral value of assets are significant determinants for all firms and DCs and not for MNCs. Furthermore, age and foreign exchange risk are significant determinants for all firms, DCs and MNCs. Originality/Value – This is the first study to investigate the leverage composition of MNCs and DCs of Pakistan and results suggest MNCs hold more debt in their capital structure than DCs.
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    Determinants of Capital Adequacy Ratio in Banking Sector of Pakistan
    (UMT,Lahore, 2014-04-28) Syed Razi Zafar
    Purpose - This study strives to explore the relationship of capital adequacy ratio with the determinants of capital adequacy ratio of the banking sector of Pakistan to found out that which of the determinants has the greater impact on capital adequacy ratio. Design/methodology/approach – The panel data of 26 banks for the years 2008-12 was taken regarding various banking and financial variables i.e. capital adequacy ratio, ROE, liquidity, bank efficiency, size of bank, bank‟s capital to asset ratio, Tier-1 capital ratio, financing to deposit ratio and share of deposits in non-equity liabilities. An econometric data analysis technique was applied for the results. Findings – The study shows that the shares of deposits in non-equities liabilities and capital to asset ratio are the two main independent variables that have the significant impact on the capital adequacy ratios of the banking sector of Pakistan. Whereas return on equity, liquidity, bank efficiency, Tier-1 capital ratio and financing to deposit ratio have no significant impact on capital adequacy ratio of the banking sector of Pakistan. Managerial Implications - The study will assist policy makers and decision making authorities of domestic and international banks to have a better look at efficient ways of taking capital structure decisions, analyzing cost of capital and maintaining capital adequacy ratios up to optimum levels. Originality/Value – This study strived to find out the major determinants of capital adequacy ratio in banking sector of Pakistan by having two new variables in the study that have never been used before. Also the rationales that provide, immunity to banks in Pakistan, have been discussed for the first time in detail.
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    Islamic House Financing in Pakistan
    (UMT.Lahore, 2014-04-30) Muhammad Mansoor Javed
    This study analyzes the demand for house financing offered by Islamic banks by exploring the nature of demand as well as highlighting its major determinant. The paper also strives to find out the level of knowledge of people regarding Islamic financing, factors encourage them to buy their own house, their perception of Islamic house financing and finally those features which influence customers’ decisions relating to the selection of finance provider. The population of the study is residents of Lahore who intend to buy their own house within next three years. A survey has been conducted using convenient sampling technique taking a sample size of 300 respondents. The response rate of survey is 81%. The study found that nature of demand for house financing offered by Islamic banks is conventional. Later, logistic regression has been applied to find out the affect of knowledge, quality of service and sincerity with religion on such demand. The results indicate that religious factor and knowledge affect the demand for Islamic house financing negatively whereas quality of service affect such demand positively. However, only the affect of quality of service on demand is statistically significant. On the other hand, study found that people have general knowledge of Islamic financing but they do not have specific knowledge of Islamic house financing. Further, male respondents have higher knowledge than the knowledge of female respondents. Moreover, people with higher qualification have higher knowledge. Income rise is the most important factor which encourages people to buy their own house. It is also found that people perceive Islamic house financing similar to conventional house financing. Finally, the survey also highlight that the cost of service is the most important criterion used by the potential clients to select their finance provider.
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    Investigating the Short run Under-Pricing Phenomena & Long run Underperformance of IPOs (Initial Public Offering)
    (UMT, Lahore, 2014-07) Ehsan Ahmad Qureshi
    This thesis investigates whether the two main anomalies (Short Term under-pricing & long tern under-performance) of IPO (Initial Public Offering) exist or not in the context of Pakistan. This study also investigates the main determinants of IPO underpricing and IPO Underperformance for firms listed in Karachi Stock Exchange from 2000 to 2012. Data collected from prospectus & offer for sale documents in order to see the impact of Pre IPO Characteristics on both anomalies of IPO. The study reveals IPO market in Pakistan reward to investors with some positive returns in short run just like other countries. We concluded that IPO underpricing does exist in emerging market of Pakistan. The degree of Underpricing in the sample (71 IPOs) is 31.17% (short term abnormal returns). The study also reveals that the performance of studied IPOs in long run w.r.t Karachi Stock Exchange is poor for investors; i.e average abnormal holding returns for period of one year are negative. The level of Underperformance is 15.98% in emerging market of Pakistan. Based on regression, we conclude that the significant determinants used to explain the level of underpricing are Underwriter Reputation, Firm Age and Pre IPO Profitability. The impact of Firm Size and Dilution of ownership on Longrun underperformance is also found significant. We also document that determinants Firm Size, Underwriter Reputation and Dilution of Ownership are negatively related with the Level of Underpricing, but offer Size, Firm Age and Pre IPO Profitability are positively related with Underpricing. The determinants Firm Size, Pre IPO Profitability and Dilution of Ownership are negatively related with the Long run Underperformance of IPO. It is also found that Firm Age and Underwriter Reputation and offer size are positively related with the level of Underperformance of IPO. Our results strongly support the Signaling theory and Ex-ante Uncertainty Model of Asymmetric Information Theory
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    The Impact of Leverage on Financial Performance of the Firm – a Case of Family Owned Businesses in Pakistan
    (UMT,Lahore, 2014-07) Muhammad Gulzar
    The vital aim of this study is to determine that how leverage impacts on the financial performance of the firm under the context of family owned firms in Pakistan. At the same this attempt will be useful for the financial manager of family owned firms to establish a pattern that how much percentage change in the level of debt will affect the performance of the family owned business. For the purpose of study a sample of 61 family owned firms relating to various economic sectors of Pakistan has been extracted which are currently listed on Karachi Stock Exchange. To find out which companies are family owned a criteria has been established using various research articles and family business journals. Financial Performance has been measured through five different dimensions such as Return on Asset (ROA), Return on Equity (ROE), Earning per Share (EPS), Market book Value ratio (MBVR) and Tobinsq (TQ). Leverage, has been proxies as Sort term debt as percentage total assets, long term debt in relation total assets and total debt to total assets. Results, shows that leverage in the form of short, long or total debt does affect the financial performance of the firm in both ways. Moreover, firm level characteristics such as size and NDTS also showing significant results. Thus, financial managers, owners may consider leverage as a vital element of the capital structure as it may enable them to intriguer the performance of the firm.
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    Factors Determining the Selection of Capital Budgeting Techniques
    (UMT, Lahore, 2014-09-24) Farrukh Ijaz
    Purpose: The main purpose of this research study is to determine the factors that play an important role in the selection of a particular capital budgeting techniques. The study determines the factors that an investor considers significant in the selection of capital budgeting techniques. Methodology/Design/Approach: A primary data based study of 92 firms has been conducted to find the determinants of capital budgeting techniques selection while considering financial and non financial factors. The financial factors include company size, growth rate and capital expenditure, whereas non financial factors include project life, industry, management demographics, competition in the industry, environmental uncertainty and risk. Findings: The study concludes that firm’s decision maker’s considers both financial and non financial factors (except leverage level and company age) while selecting capital budgeting technique. Small firms usually rely on a one capital budgeting technique and therefore, mostly don’t consider the non-financial factors like company age, competition and demographics. Research Limitations: The study takes the data of the listed and non-listed companies that are operating and having their offices in the region of Lahore. Managerial Implications: The study assist investor’s and decision making authorities of domestic and international firms to have a better look of taking capital budgeting decisions. This research also enables a broad and rich overview of capital budgeting techniques used for investment projects within the Pakistan. Originality/Value: Most of the operational issues and factors of capital budgeting methods leading to its long term sustainability and selection are brought under discussion. First comprehensive study has been conducted on factors determines the selection of capital budgeting techniques within the Pakistan.
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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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    Executive director's remuneration and firm performance in pakistan
    (UMT, Lahore, 2015) Ejaz Aslam
    Issues on the suitableness of executive director's remuneration packages have gotten a regularly increasing profile in recent years. While there has been quite in depth extensive empirical investigation of pay-performance sensitivity, the framework of performance-pay has received less attention within the literature. In this context, the present study makes a twofold contribution to the examination of executive directors' remuneration of 50 non-financial firms from KSE ICQ index. First and foremost, this analysis aims to empirically investigate the linkages between interrelationships between pay and performance over a six year period from 2008 to 2013. Inside the extent of a mixture of hypothetical perspectives, this deductive study puts an attention on tending the question of what there an interrelationship between executive directors' remuneration and firm performance? Overall the present study utilizes deductive methods approach via quantitative modes of analysis - an approach that is comparatively rare in order to examination into corporate governance and related issues. The results from the experimental work show confirmation of the vicinity of double positive relationship between executive director's remuneration and fiim performance. However, the outcomes signify that executive director's remuneration is more compelling in its impact on finn performance than the framework of performance related pay. This finding of the study are support to the stewai^dship and tournament theories as to basic drivers of compensation in examination with agency theory, drawn by the agent perspective or administrative authority viewpoints, as an infoiTnative of the development of executive compensation and the connection with finn perfonnance. On the other hand, the outcomes demonstrated that the presence of D compensation committee nomially as a rule uncovers unimportant and eontrarily identified with aggregate CEO/executive eompensation. This discovering highlights aceordingly the need to put an attention on the genuine part of remuneration committee in setting the sort and degree of official pay packages in a substantial Pakistan organization. In conclusion, the findings of the current study give and abundance of insight concerning the quantitative as to the way in which executive's remuneration has been set in the Pakistan as of late and as to linkages both with company perfonnance and underlying theories of the detenninants of exeeutive remuneration. Accordingly it reveals insight into a zone of significance and one of proeeeded with public and private coneem and may be of interest to those liable for governance inside firms and to more extensive public and regulatory interest and in addition as future researcher within the field.
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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.