Conventional vs Islamic Bond Announcements: The Effects on Shareholders ’ Wealth

In this study the impact of Islamic bond and conventional bonds announcement on shareholder wealth was investigated. Data was employed from firms that listed in Bursa Malaysia for the period 2001 to 2006. A standard event study methodology with beta refinement using Blume’s method is employed to achieve the objective. The results indicate that there is a wealth effect by the announcement of Islamic bond issues. This is consistent with Mikkelson & Partch (1986) that states certain types of debts lead to abnormal return. The bond offering size appears to have a mild negative impact on the cumulative abnormal return