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Market risk disclosure: evidence from Malaysian listed firms

Author

Listed:
  • Radiah Othman
  • Rashid Ameer

Abstract

Purpose - The purpose of this paper is to investigate the market risk disclosure practices among Malaysian listed firms. Specifically, it aims to examine the level of compliance with FRS132: Financial Instruments – Disclosure and Presentation for financial periods beginning or after 2006. Design/methodology/approach - The approach taken is content analysis and coding procedure. Findings - Although a large number of companies have shown compliance with FRS132 in relation to disclosing the financial risk management policy, there are systematic differences across companies in terms of level of details (i.e. qualitative and quantitative) disclosure. Interest rate disclosure was the most mentioned category and the credit risk was the least mentioned category of market risk. There is telling evidence that most Malaysian firms did not engage in hedging any type of market risk over the reporting period of 2006-2007. Research limitations/implications - There is a need for some standardized risk reporting format to achieve greater financial transparency to make investors aware of the market risks. Originality/value - This is believed to be the first study to provide survey findings on the use of derivatives instruments by listed firms in Malaysia.

Suggested Citation

  • Radiah Othman & Rashid Ameer, 2009. "Market risk disclosure: evidence from Malaysian listed firms," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 17(1), pages 57-69, February.
  • Handle: RePEc:eme:jfrcpp:v:17:y:2009:i:1:p:57-69
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    Citations

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    Cited by:

    1. Abdullah, Azrul & Ku Ismail, Ku Nor Izah, 2015. "Hedging Activities Information and Risk Management Committee Effectiveness: Malaysian evidence," MPRA Paper 85026, University Library of Munich, Germany.
    2. Rosa Lombardi & Daniela Coluccia & Giuseppe Russo & Silvia Solimene, 2016. "Exploring Financial Risks from Corporate Disclosure: Evidence from Italian Listed Companies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(1), pages 309-327, March.

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