Definite correspondence between capital investment and abnormal return / Datu Mohd Hadzizan Suli

Capital investment is one of the relevant information that investor could depends in order to make their investment. All this while, capital investment has a relationship towards stock return. Previous study also provide mix result regarding the capital invested in a company which contribute to a better stock return. In Malaysia, a lot of firm that listed in bursa Malaysia which has a good stock performance, but with this study, it could help the investor to make a better investment decision. This paper will gives extra information on capital investment which correlated with the return. Investor could rely on any other related information for example market trend, economic trend, and political behaviour but when it comes to capital investment regarding information, it gives a small contribution but not as a benchmark for return. This new evidence achieve a negative significant evidence between capital investment and abnormal return. Consequently, this study investigates the relationship of capital investment on abnormal return of Malaysia listed firms. The empirical results show that during and post Asian Financial Crisis 1997-2006, and during and post Global Financial crisis 2007-2015 has negative effect when the regression of capital investment which represent by Book-to-market equity and Market capitalization(size of firm) with abnormal return. This result directly support the hypothesis of negative significant relationship between capital investment and stock return. The result obtain also shows the capital investment has no effect on stock and abnormal return.