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Item Improving Portfolio Selection using Family Groupings(UMT,Lahore, 2016) Saqib FaridThe primary purpose of the thesis was to investigate the role of family groupings in improving portfolio selection. In this study we constructed value weighted family group portfolios of stocks on the basis of common family ownership.Item THE MULTI-DIRECTIONAL RELATIONSHIPS OF THE DETERMINANTS OF CORPORATE LEVERAGE IN PAKISTAN(UMT,Lahore, 2016-10) SAAD ULLAH BHUTTAThis empirical research was conducted in order to examine the multi directional relationships existing between the corporate leverage and its determinants, identified by the literature, in non financial sector of Pakistan. This study is based on the work of Neset Hikmet, Lin and Mooney (2011) which was conducted on Japanese firms and used a Structural equation model to conduct a path analysis on leverage and its determinants. It used the same framework and applied the Structural equation model (SEM) in Pakistan with increased number of observed variables. A sample of all listed non financial companies of Pakistan was drawn and the data of 357 companies was collected comprising over five years from 2010 to 2014, making 1785 firm years. The data was further subdivided into three sectors (Textile, Large and Small Manufacturing Companies) and was analyzed separately.Item The effect of concern about reported income on discretionary spending decisions(UMT,Lahore, 2016-09) Abdul WahidA lot of research has been conducted in foreign countries on research and development, but in Pakistan a much research well not be conducted in the area of R&D actions through discretionary spending decision. Prior research disclosed the R&D expense through firms SFAS NO. 2 Skaife et al, (2013). In this study under the IAS 38 to highlights the firm’s manager allocate the funds for R&D investment through discretionary spending decisions to improve the firm performance, and was investigated to R&D impact of firm profitabilityItem Transparency and Financing choices of Family Firms(UMT, Lahore, 2016) Hafiz Asim Mehmood JoyaPast literature indicates that family firms were different from nonfamily firms in term of performance, governance and disclosure. But there was very little evidence which species the financial structure of family firm. Maturity and leverage, two proxies are used to examine the financial structure of family firm in this particular study. This study shows that family firms are different from non-family firms in term of debt maturity and leverage. Moreover, Transparency is negatively related with Maturity which indicate that more transparency decrease maturity, while family firms have more debt maturity which suggested that family firms are more relying on long-term debt and there is chance of expropriation in family firms due to less transparency. Furthermore, transparency is positively related with leverage which indicate that more transparency increase leverage , while family firms also have positive relationship with leverage which specify that more transparency leads family firms financial structure more toward debt.Item Influencing Factors Affecting the ROD(UMT, Lahore, 2016) HADIA SOHAILItem EFFECTS OF INFORMATION TECHNOLOGY ASSETS PORTFOLIO OF FIRMS ON PROFITABILITY(UMT, Lahore, 2016) Kashmala ChandThis study intends to find the effects of the IT assets portfolio of the firm on profitability on emerging countries. The study includes the companies of the emerging countries that are include the list of global and leader challenges. The time frame for the study is 06 years (2011-2016). The study is not only focused on one particular country but the challenging nations of the world to identify the importance of investments in Information Technology sector and the performance of organizations with such investments. Through empirical evidence it is proved that there is a positive impact of the IT assets portfolios of the firm on profitability on emerging countries. The result shows that companies should invest in the IT assets so that their business can grow and achieve the goal.Item Estimation of Expected Return(UMT,Lahore, 2016) Muhammad JahangirThis research study examined the implications of FF three and FF five factor model in Pakistan Stock Exchange. The population data was used from companies having portfolio development with at least 40% trading days of the whole market. A time duration of January 2010 to December 2014 is used in this paper while data was extracted from the annual reports and “Open Doors” for the portfolio development. The data initially was divided into equal weights and value weights and after that it was segregated into daily, weekly and monthly form. There were six and sixteen (weekly equal weight) portfolios which were constructed on the basis of 2*3 sort and 2*2*2*2 sort respectively. Pakistan’s six month T bills data was used for risk free asset and excess return was the dependent variable. The empirical findings of these two models confirmed the idea of FF 3 and FF 5 factor model however FF 5 factor model outperformed the FF 3 factor model. The outcomes approved that every independent factor was important to explain variation in excess returns. The results showed that market, small stocks and value stocks overtook risk free asset, big stocks and growth stocks respectively. In 2*2*2*2 sort every portfolio depicted weak profitability except in SHRC. Though every portfolio was showing weak profitability but in the portfolios of small stocks companies have aggressive investment irrespective to their low profits but big stocks firms have conservative investment behavior. The results of this study were consistent with the findings of previous researchers like (Fama & French, 1992; Mirza, 2008; Rafi, Kazmi, & Hashim, 2014) but did not match with Iqbal and Brooks (2007). Last but not least, the findings of this article would assist to the individual as well as institutional investors and fund managers about their future investment.Item Capital structure, Free cash flow, Market structure and Firm performance(UMT,Lahore, 2016) Sana NasirThe present study collectively inspected the inter-connection of capital structure, free cash flow, market structure and firm performance. Previous studies has inspected every factor association separately, nonetheless these 4 variables jointly linked also the complex endogenous association. Therefore, there is a need to investigate collectively of these four variables for better comprehend the association among them. This study found the results that the total debt leverage is positively significant on firm performance which means that the high debt level is considered a positive sign in the market and those manufacturing companies are considered proficient of bearing higher debt. While firm performance is negative significant on leverage. HHI is positively significant on firm performance. Free cash flow is negatively significant on firm performance. Leverage is significant as well as positive on HHI. HHI is positive as well as significant on firm performance. The industry-wise results are also explained in this study. The industry-wise graphical presentation also represented to examine the industry’s concentration in the market.Item Impact of Risk Management Committee on Islamic Banking Performance(UMT, Lahore, 2016-09) Anam IqbalThis study examines the relationships between the determinant of the risk management committee and banking performance of Pakistan and Bangladesh. The study sample consists of all full fledge Islamic banks in Pakistan and Bangladesh over the period of 2006 to 2014. The findings are derived from the generalized least square regression model, study finds that the existence of risk management committee performs better in Bangladesh as compared to the Pakistan Islamic banks. Moreover, the risk committee size has mixed results in Pakistan, but it is positively related in the Bangladesh. In addition, independent directors on risk committee are insignificant both for earning per share and return on assets in Pakistan and Bangladesh and it’s negatively related with return on equity in Pakistan and positively related to the return on equity of the banks of Bangladesh. The credit risk officer is not performing well in the Islamic banking sector of Pakistan, but in contrast it performs well in Bangladesh Islamic banks. In conclusion, the overall determinants of the risk management committee are performing better in Islamic bank of Bangladesh as compare to the Pakistan.Item The Financial And Intellectual Capital Structure’s Implication Of Pursuing a Strategy of Innovation(UMT, Lahore, 2016-05) Muhammad Ali sikanderRecently the experimental effort has protracted the variety of approaches interrelated with Leverage and make a sound strategy to find the relation of company innovation with Leverage. The firm that recently established in the market is highly dependent on the innovation and the competition in the market requires a solid innovation strategy to sustain in the market. Therefore, innovation importance can’t be neglected at any phase of business life. At the same time, employees also play a major role to identify the best strategy that can increase company innovation as well as their performance. The key complication that a company faces today is innovation is highly interconnected with the Leverage of the firm. The modern studies show that more the company’s managers are vigilant by setting their capital structure the more innovation business will produce so human capital play a vital role to implement strong innovation strategy. The financial slack of a company highly emphasizes on the firm’s innovation. Our research is to find out the relationship of innovation with capital strategy. However, innovations affect intellectual capital while observing the impact on company’s profitability. Therefore, this Research study is the illumination on innovation impacts on company capital structure and intellectual capital that company either invests owner equity or takes debts to boost innovation. We take 100 innovative companies from Forbes innovative firms as our sample and drive R&D intensity ratio (research and development) as substitute of innovation and applied regression by taking dependency of these companies on Leverage ratio and Intellectual Capital. This Research Study will help entrepreneurs to jump into the market with some logical thinking and this model will guide that how the market’s most innovative firms are acting. This Research Study shows a strong response that a company financial strategy is an important part of the company to create innovation.Item Impact of Intellectual Capital on Firms Financial Performance In Pakistan.(UMT,Lahore, 2016) Sidra MumtazThe motive of the study is to assure the significance of intellectual capital on firm’s financial performance in Pakistan’s non-financial sector from 2008-2014. It is a clear fact that intellectual capital plays substantial role in profitability and productivity of a business organization. Previous studies found a number of variables to measure the components of intellectual capital and firm’s profitability. However, this study includes modified value added intellectual capital (M-VAIC™) which is a restructured form of value added intellectual coefficient (VAIC™) introduced by (Pulic, 2000). In this research the progress of an organization is ascertained by different profitability ratios. Leverage, growth and firm size are taken as control variables. The companies should focus on their human, structural and relational capital because there is no company which can exist without the involvement of intellectual capital. It is a clear fact that tangible assets are important for growth and profitability of business and enhance also the productive resources of company. The results show that intellectual capital has significant role in the performance of non-financial companies in Pakistan. This study shows that intellectual capital positively affects operating income return on investment and return on assets.Item Determining the Impact of Corporate Governance Index on Intellectual Capital Performance(UMT,Lahore, 2016) WASEEM AKHTARThis study is aimed to evaluate the impact of corporate governance index on intellectual capital performance by developing the index from five sub-indices and incorporating the value added intellectual coefficient (VAIC) methodology for intellectual capital performance. Fixed and Random Effect Regression techniques have been used to analyze the data of textile sector in Pakistan from 2010 to 2014. The findings suggested negatively significant impact of corporate governance index on intellectual capital performance while sub-indices gave mixed results. The study investigated the relationship of individual variables in each sub-index with performance and results show significant relationship for five variables namely independent director, independent audit committee, foreign shareholders ownership, gratuity and remuneration committee. When data is further analyzed sub-sector wise, the outcomes indicate insignificant results for all sub-sectors with respect to corporate governance index and sub-index remuneration. Sub-index ownership show significant results for all sub-sectors while the sub-indices board, disclosure and related parties transactions give mixed results. The outcomes of this study can be used by the policy makers as an attempt to boost the performance of textile sector. A modified value added intellectual coefficient (M-VAIC) methodology can be used in future research.Item RISK AND RETURN PROFILE USING ICAPM EVIDENCE BY FF3 PORTFOLIOS ON KSE 100-INDEX(UMT,Lahore, 2016-07) Muhammad Asad RaufThis paper analyzes the ICAPM multifactor models, tested over 6 portfolios sorted on size and book-to-market of KSE 100 Index. Companies are included in the study for the calendar year 2010 to 2014 that are listed in KSE 100 index. The Company should have regular price record at the end of every year and should provide accounting data publicly available for June of every year to be selected in sampleItem The Impact of Credit Rating on Firm Performance and Stock Return(UMT,Lahore, 2016-05) Muhammad Ahmad AbbasThe respective study focus on three aspects; factors determining credit rating, the impact of CR on act of firm & the relation between return of stocks and credit rating. The study focuses on the firms listed in Karachi Stock Exchange (KSE) of Pakistan. The empirical analysis uses the data of 49 firms rated by Pakistan Credit Rating Agency (PACRA) for the time period of 6 years, 2009-2014. Two estimation techniques have been applied, Ordered Probit Model and Panel data Regression. Our findings illustrate credit ratings are predicted by important firm specific factors (size, growth opportunities and capital intensity, asset returns, sector type). Moreover, it is suggested further that firm with higher credit rating tend to have better performance (measured by Tobin’s Q & ROA) of listed firms. Likewise, higher rated firms tend to achieve higher returns on their stocks.Item A Comparison of Stock Market volatility(UMT,Lahore, 2016-04) Faizan NaqviPurpose: The main purpose of this research is to investigate the differences in volatility of emerging vs developed stock markets to safeguard the interest of small and foreign investors. This study examine the relationship between daily information flow and conditional volatility in developed and emerging economies and to find out whether traded volume is a good proxy for daily information flow. Design/methodology/approach: To achieve the objectives of this research standard method used to analyze the volatility, i.e., TARCH, EGARCH and ARMA model. This research used secondary data of 18 Emerging and 22 developed stock market indices. Daily closing prices and daily traded volume is used as the proxies for conditional volatility & information flow respectively. This study covers the time period from 1990 to 2015. Whilte’s general test and Breusch-Godfrey test is used for Heteroscedasticity and Auto-correlation correspondingly. TARCH and EGARCH both models are estimated under General Error Distribution. Findings: The study concludes that magnitude and direction of shocks are equally important in developed markets but in case of emerging markets magnitude of shock play vital role. Volatility persistence is quite high in both sets of markets but more high in developed stock markets. Asymmetry is uniformly present in all markets considered; leverage effect of bad news has stronger effect in developed markets. Results show positive relationship between volume and volatility also when volume is decomposed into its components, added to variance equation volatility persistence decreases. Research limitations: Risk adjusted returns offered by both emerging and developed economies would also be considered along with volatility analysis to analyze as to which markets are paying more dividends or returns accordingly to risk associated with that particular stock. Practical implications: This research is very useful from investor’s point of view as the risk analysis is done across variety of emerging and developed markets, investor could make a judgment for investment according to his risk appetite. This research also examines the relationship between volume-volatility so it would help the technical and financial analysts to better understand the volatility of different stock market indices while doing investment decisions. ii Originality/value: As far as we know there is no evidence on the volatility comparison sample time span considered to incorporate the major shifts in the economies. Volumevolatility relationship and the decomposition of volume into its components then adding into variance equation resulting in reduced GARCH effect adjoin value. Therefore, this study adds new knowledge to the literature of volatility analysis.Item Dynamism in Financing Decision Patterns(UMT,Lahore, 2016-04) SUMERA ANISThis empirical study is conducted to analyse the dynamics of financing decisions for Pakistani non-financial firms. The approach to investigate the problem is life cycle approach incorporating dynamic panel data methodology. Three life cycle stages; growth, maturity and decline are selected for analysis. The basic criteria for samples are information about IPOs. Five hypotheses are postulated for the study which is about life cycle impact, reverse of life cycle impact, reputational effect, in search for reputational effect and pecking order theory. Hypotheses H1a & H1b state that in the beginning firms use more equity finance and then gradually rebalance this with debt. In hypotheses H2a & H2b reverse of H1a & H1b are analysed. In hypothesis H3, as pecking order theory predicts, importance of profitability is considered and utilization of internal finance against debt and equity is studied. Results illustrate that the impact of life cycle theory, reputational effect and pecking order theory are present for Pakistani firms. In the growth stage firms mostly rely upon equity finance and after getting maturity they augment use of debt financing. Pecking order theory is confirmed too.Item The effect of Islamic holidays on stock returns and volatility in emerging Asian economies.(UMT,Lahore, 2016) Madiha NiazThe objective of this study is to examine the impact of Islamic holidays on stock returns and volatility for emerging Asian markets. In this study event study methodology was applied to check the impact of Islamic holiday on KSE, DSE, ADX and BSE. Independent T-test and F-test of two sample variance were applied as a statistical technique to study the impact of holidays on stock market. The study focuses on four holidays (Eid ul Fitr, Eid ul azha, Eid Milad un Nabi and A shoran) for a time period of eleven years from 2005 to 2015. To find robust results two event windows are used (5days and 12days). The results of this study indicate that Stock prices followed a random pattern and in indicated very few or no significant changes in returns and volatility. So, on the basis of analysis it was concluded that Islamic holidays have impact on stock volatility in Asian emerging markets.Item Role of Cash Flow Sensitivity and Managerial Discretion in the Investment Decisions(UMT,Lahore, 2016-04) Rehan AhmedThis research aims to investigate how a firm’s decision in favor of, or against, financing new positive NPV projects, depends on the availability of internal cash flows and to what extent they are dependent on the discretion of managers making investment decision. For a given firm, cash flow shocks result in expectations formation about future cash flows. If a firm experiences a positive cash flow shock, it is more likely for the said firm to positively change its expectations about future cash flows. In case of a negative cash flow shock, the firm is likely to expect more negative cash flows in future. The availability of finance, literature tells us, is not merely a function of supply but rather it is the cost on which a firm is able to obtain financing. In case of firms working in Pakistan, a majority of firms should face, in this regard, a financial constraint weakening their ability to extend their operations or start new projects. This constraint may emerge from the fact that compared to developed economies such as United States, the market is highly characterized by information asymmetries. On the other hand, the agency theory states that agents often make those decisions that do not necessarily reflect the interests of the principals. Tthis should also be true for the investment decisions. This research aims to investigate on which of the above two factors does the investment decisions depend or whether both of these factors can be thought of as a collective force that determines where and when the investments are made.Item Determinants Of Financial Sustainability In Microfinance Institutions: Evidence From SOUTHASIA(UMT,Lahore, 2016-10-08) MARYAM SHAHIDPurpose - The aim of this research is to examine different determinants of sustainability of microfinance firms and to find out which of those determinants have a significant impact on sustainability of microfinance firms. Another objective of this research is to study the impact of microfinance firm profit status, legal status, regulatory status and age on its sustainability. Design/Methodology/Approach - Unbalanced panel data is collected consisting of 1945 observations of 243 microfinance institutions from 5 countries of south Asia region over the period 2000-2016. The variables under study include outreach, efficiency ratios, firm performance indicators, portfolio risk indicators and institutional indicators. Findings – Results of the study show that outreach, portfolio risk indicators and firm financial indicators are most important and significant determinants in determining the sustainability of microfinance firms. Moreover, it is also concluded from results that NGO’s perform best in terms of outreach and BANKS show high performance in terms of firm financial performance. Managerial implications – This study will help policy makers and decision makers in making microfinance firms more financially sustainable.Item Investor views about intrinsic value and stock price(UMT,Lahore, 2016) Reema Sattar