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March
2000
(Issue No. 113)
Synopsis
Pension and Financial
Market Reforms ¨C with Special Reference to Malaysia
by Dr R Thillainathan
This paper argues that pension reform is limited without a
reform of capital markets and demonstrates that reforms of pension and capital
market are interdependent. Malaysia¡¯s Employees Provident Fund is used as a
case study to explain how the performance of a pension fund may be constrained
by the nature of the fund, government regulations and under-developed financial
markets. The author recommends specific reforms for certain key segments of the
financial markets namely the fund management industry, bond market,
securitisation and cross currency swap market which will facilitate reforms and
optimal management of pension fund.
Monetary Policy and
Banking in an Era of Liberalisation
by Dr Noor Azlan Ghazali
Commercial banks have been agents of monetary policy that is
transmitted to the economy via two channels: the money channel and the credit
channel. However, liberalisation and deregulation have made them highly
innovative with greater flexibility in their portfolio allocations and thus
less potent as agents of monetary policy. This paper examines empirically the
ability of central bank and the efficacy of its monetary policy in influencing
bank lending, in a deregulated environment.
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Retail Banking in the
21st Century ¨C Building the Winning Position
by D J Cavell
The new millennium has unleashed competitive forces hitherto
unseen in retail banking. Technology has brought new delivery channels as well
as new players to the marketplace. Customers have grown in sophistication and
have shown greater propensity to switch banks. In order to survive and succeed,
these challenges must be met with the right strategies. The writer identifies
the strategic issues retail banking will have to grapple with: brand, delivery
channel and customer relationship.
Profitable Customers
Retention Management through Database Marketing
by Dr Rizal Ahmad
With many players including non-bank entities in the financial
marketplace, banks will have to deploy strategies to retain customers. To be
able to devise the right strategies, the author advocates, a bank needs an
appropriate database of its customers. The writer enumerates and explains the
essential elements of a marketing database that will give banks useful
information about their customers ¨C an efficient tool in serving and retaining
existing customers - customers with profitable banking relationship.
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Culture at Work:
Leadership Awareness for Global Banking ¨C Part 2
by Dr Carol O¡¯Connor
As a sequel to the first article, the writer attempts to
interpret the scores in cultural preferences obtained from the study by
Professor Geert Hofstede in a management context. Scores in preferences for
individualism, power distance, certainty and achievement as observed in
Malaysia is compared variously with the USA, France, Germany, the UK and Japan
and their implications for leadership behaviour in a multicultural and
international banking world are explored.
Auction Proceeds:
Procedural Delay and Proposals to Amend Sections 259 and 265 of the National
Land Code 1965
by Anandan Krishnan
Much delay has been experienced in the recovery of auction
proceeds by banks. The author traces the convoluted process inherited from
colonial days and questions the wisdom of continuing administrative practices
which are burdensome. The writer proposes amendments to the relevant sections
of the National Land Code which will expedite the process.
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Does Acquisition Benefit
Shareholders
by Nor Hayati Ahmad, Zahiruddin Ghazali and Rusmawati Ismail
Acquisition announcements often create much excitement in the
stock market and, notably, significant price movements of the acquirer and the
acquired ensue. The writers studied the effects of acquisition announcements by
Malaysian listed companies on their share prices and also the relationship
between these share price movements and ownership tightness.
Exchange Rate Changes
and Stock Market Reactions: A Special Case of Currency Depreciation and Its
Influence on the Local Stock Market, The Malaysian Experience
by Dr Othman bin Yong and Zaidi bin Isa
The authors attempt to establish if currency fluctuation has any
influence on price movements in the stock market, or vice versa, both before
and during the Asian financial crisis. Although their findings show that the
local stock market was affected by the depreciation of ringgit during the
currency turmoil but not before that, the causality factor ¨C the fall in stock
market (resulting from liquidation of stockholdings by foreign investors (stock
market) leads to the currency turmoil (resulting from converting sale proceeds
into foreign currency) ¨C cannot be ignored.
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International Transmission
of Stock Market Movements: Evidence from Selected Asian Emerging Markets
by Dr Ahmad Zubaidi Baharumshah and Tamat Sarmidi
The reforms undertaken by Asian countries to liberalise their
financial markets have resulted in greater integration of their economies with
the advanced nations, including their stock markets. The writers analysed
historical data before and after liberalisation in four countries: South Korea,
Taiwan, Malaysia and Thailand in conjunction with those in the USA, Japan and
Hong Kong to determine the extent of integration of Asian stock markets with
those developed markets as a result of financial reforms and the opening of
markets.
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