THE PREFERENCES OF MALAYSIAN INSTITUTIONAL INVESTORS: DO THEY CHANGE THEIR PREFERENCES DURING TIME?

The main objective of this paper is to test which firm's characteristics attract Malaysian institutional investors. Using a panel of 237 main market Malaysian firms, the results of the fixed effects model show that institutional investors in Malaysia invest in firms with large size, more tangible assets, more ROA, more growth, less stock price volatility, less leverage, less managerial ownership and less business risk. We also find that there are some differences between the preferences of different types of institutions. The findings of this study reveal that pressure-sensitive institutions are more conservative than Pressure-insensitive investors. In addition, the results of this study show that institutional investors change their preferences during different periods and become less conservative in their investment decisions.