Socially responsible investment in emerging markets case study : Malaysia | |
| Author | Gertz, Etienne |
| Call Number | AIT RSPR no.SM-06-63 |
| Subject(s) | Investments--Social aspects--Malaysia Investments--Environmental aspects--Malaysia |
| Note | A research study submitted in pa1tial fulfillment of the requirements for the degree of Master of Business Administration |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-06-63 |
| Abstract | Socially Responsible Investing is defined as an investment process that considers the social and environmental consequences of investments, both positive and negative, within the context of rigorous financial analysis This investing process is based on three pillars: screened portfolio, shareholder activism and community investing. It began with a religious inspiration and expanded with 1960s activism and anti Vietnam War movements. After three decades of developments SRI has turned into an international industry with over $2.7 trillion in assets. Estimates conclude that SRI does not underpine performance but provides returns competitive with or even superior to traditional investment approaches. In emerging markets, to contrast, the weigh of SRI in the capital market has not reached the same level. But this could change soon since global sustainability issues are raising the attention of social investors. The performance of these funds in emerging markets is still difficult to assess due to its early stage. Concerning the demand however, surveys conducted in the US estimate that up to $5bn could be invested in emerging market funds. So far, emerging markets suffer from high risk investment reputation mainly due to unfavorable regulations, lack of transparency and non liquid market. Moreover, only a few investors have sufficient knowledges to understand the stakes of investing in emerging markets. The report concludes that socially responsible investing emerging markets funds remain complex and hardly comprehensible for most investors. A focus on the malaysian context reveals that the concept of socially responsible investment is not new to them since it has been existing under the form of Islamic Investment Funds for forty years, with the introduction of the Islamic funds "Dana AlAiman" in 1968. The first socially responsible investment fund in Malaysia - the Mayhan Ethical Trust Fund managed by Mayhan Management Bhd - was launched on 7 January 2003. The foundation of the first domestic socially responsible investing fund has been an important step forward for further expansion of SRI funds. In addition, the government has played a major role to improve the state of coporate governance with the implementation of laws that help the minority shareholders to exercise their right but still, commitments towards more transparency have to be taken. Moreover the government objective to focus on social issues such as poverty, education and health along with the intent of becoming a major international Islamic banking hub by 2010 have been playing strong catalysts for more socially reponsible investing funds. The report concludes that as a an educated and increasingly financially sophisticated society, there is potential to develop new SRI products which are also linked to Islamic investment rules. |
| Year | 2006 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Dimmitt, Nicholas J.; |
| Examination Committee(s) | Zimme1mann, Willi ;Kouwenberg, Roy ;Kauranen, Ilkka ; |
| Degree | Research Studies Project Report (M. BA.) - Asian Institute of Technology |