MARITIME INDUSTRY: THE COMPARATIVE ANALYSIS OF GLOBAL MARITIME
VENTURES BERHAD AND SELECTED COMPANIES IN THE MAIN BOARD OF BURSA MALAYSIA (2005- 2009)
By
AHMAD SYAIFULIZAN BIN ZULKEEFLY
Project Paper Submitted in Partial Fulfilment of the Requirement For the Degree of Master of Business Administration Graduate School of Management
International Islamic University Malaysia 2011
APPROVAL PAGE
I certify that I have supervised and read this Project Paper and that in my opinion it confonns to acceptable SlaDdards of scholarly presentation and is fully adequate, in scope and quality, as a Project Paper for the degree of Master of Business Administration.
L This Project Paper was submitted to the Graduate School of Management, IIUM and is accepted as partial fulfilment of the requirements for the degree of Master of Business Administration.
Dr. Turkhan Ali Abdul Manap Project Paper Examiner
This Project Paper was submitted to the Graduate School of Management, IIUM, and is accepted as partial fulfilment of the requirements for the degree of Master of Business Administration.
Prof. Dr. Arif Hassan Chairperson, Project Paper Committee Graduate School of Management IIUM
Master of Business Administration
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DECLARATION AND COPYRIGHT
Name Matric Number
Allmad Syaifulizau Bia Zulkeefty G0920237
I hereby declare that this research is the result of my own investigations, except where otherwise stated. Other sources are acknowledged by footnotes giving explicit references and a bibliography is appended.
Signature: Date: 12111 April 20 II
©Copyright by Ahmad Syaifulizan Bin Zulkeefly and International Islamic University Malaysia
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DEDICATION
This project paper is dedicated to my parents, my lovely wife and my new born baby girL The completion of this project paper would not have been possible without their understanding, love and support
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ACK:-.!OWLEDGEME:-IT
Firstly, this dissertation would not have been possible without the guidance and the help of my supervisor, Prof. Dr. ?1/asim Shah Shirazi who contributed and extended his valuable assistance in the preparation and completion of this study. His sincerity and encouragement has been my inspiration to overcome all the obstacles in the completion of this project paper.
Last but not the least, my parents, my lovely wife, my new born baby girl. and the one above all of us, Allah the Almighty, for giving me the strength to complete the project paper on time as per schedule. May God will give me strength to further into PhD in the future. Insha' Allah.
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TABLE OF CONTENTS
Approval Page
Declaration and Copyright Page
Dedication
Acknowledgements
Table of Contents
List of Figures
Li<t of Tables
List of Abbreviations
Abstract
I. INTRODUCTION
1.1. Objectives of the Study
1.2. Significance of the Study
1.3. Limitations of the Study
1.4. Organization of the Project Paper
2. Literature Review
2.1. Summary
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3. RESEARCH METHODOLOGY 22
3.1. Data Collection 22
3.2. Data Analysis 22
3.3. Data Interpretation 22
3.4. Data Collection Method 23
3.5. Sampling Data 24
3.6. Hypothesis 24
3.7. Research Design 26
4. PROFILE OF THE COMPANIES I SAMPLES 29
5. DATA A:--IALYSIS AND FINDINGS 46
5.1. Comparison of Return on Investment (ROI) 46
5.1.1. ROI Trend Analysis 47
5.2. Comparison of Return on Equity 47
5.2.1. ROE Trend Analysis 48
5.3. Comparison of Dividend per Share (DPS) 49
5.3.1. DPS Trend Analysis 50
5.4. Comparison of Earnings per Share (EPS) 50
5.4.1. EPS Trend Analysis 51
5.5. Hypotheses Testing and Findings 52
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6. CONCLUSIONS AND RECOMMENDATIONS
6. I. Conclusions
6.2. Recommendations
BIBLIOGRAPHY
APPE;..!DIX l
APPENDIX 2
APPENDIX 3
APPENDIX 4
APPENDIX 5
APPENDIX 6
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List of Tables
TABLE 1: ROI Averages for 5 Years
TABLE 2: ROE Averages for 5 Years
TABLE 3: DPS Averages for 5 Years
TABLE 4: EPS Averages for 5 Years
List of Figures
FIGURE I: Comparison of Return on Investment (ROI)
FIGURE 2: Comparison of Return on Equity (ROE)
FIGURE 3: Comparison of Dividend per Share (DPS)
FIGURE 4: Comparison of Earnings per Share (EPS)
List of Abbreviations
GMVB
RO!
ROE
DPS
EPS
Global Maritime Ventures Berhad
Return on Asset
Return on Equity
Dividend per Share
Earning per Share
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ABSTRACT
This paper provides comparative analysis of Global Maritime Ventures Berhad and selected companies in the main board of Bursa Malaysia over a period of five years -2005 to 2009. Global Maritime Ventures Berhad is an investment holding company created by the Malaysian government to give boost to the Malaysian maritime industry with a sum of RMSOO million funds. Few major profit performance ratios - Return on Investment, Return on Equity, Dividend per Share and Earnings per Share are used as indicators to evaluate the performance of maritime industry under study. The study finds that the GMV performances are better than the listed companies.
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CHAPTER!
1. INTRODUCTION
Global Maritime Ventures Berhad (GMVB) was established in 1993 with a sum of
RM 500 million to give boost to the maritime industry in Malaysia. Global Maritime
Ventures Berhad (GMVB) is a marine venture capital investment holding company
acts as the catalyst to the country's maritime industry by forming strategic alliances
with Malaysian partners through establishing a complete, high quality, competitive
and environmentally sea-secure transportation services.
Global Maritime Ventures Berhad's operation is to develop the national shipping
business sector through building strategic alliances with local partners to jointly
acquire vessels for domestic as well as international operations. The perception about
Global Maritime Ventures Berhad' s performance is generally good.
People believe that Global Maritime Ventures Berhad could act as a catalyst in
spearheading the physical and economic development of Malaysian maritime industry
through joint venture, in a professional, fair, efficient and transparent manner for all
the stakeholders. It is also considered as a premier venture capital provider in leading
the development of high quality and competitive maritime transportation services.
Nevertheless. there is lack of studies regarding the performance (in terms of profit
earning) of maritime industry in Malaysia. So far, no exact and detail research on its
achievement has been made. Therefore, this project paper is intended to fill the gaps
by focusing on profit performance as the subject matter.
Majority of previous researches have been focusing on the financial ratio as the tool
for analyzing company's performance. So we will also use these ratios for the
comparison purpose. The study will examine and evaluate fifthteen out of twenty
two companies in the Main Board of Bursa Malaysia in term of their average profit
perfonnance between 2005 and 2009 which are under the maritime industry. The
companies are selected based on their year of listing between 2005 and 2009 and also
based on their paid-up capitals which are between RM I Million to RM I Billion.
At the same time, one private investment holding company, Global Maritime
Ventures Berhad, will also be used as a benchmark on perfonnance of Maritime
Industry in Malaysia since it is indirectly owned by the Malaysian Government
through Bank Pembangunan Malaysia.
The focus of the study will be on the profit perfonnance ratios which are ROI (Return
on Investment). ROE (Return on Equity). DPS (Dividend per Share) and EPS
(Earning per Share). The data for these will be gathered from companies· annual
reports. The data will be analyzed using Financial Ratio Analysis Method. Financial
ratios are widely used for modelling purposes both by practitioners and researchers.
The firm involves many interested parties, like the owners, management, personnel,
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customers. suppliers, competitors, regulatory agencies, and academics, each having
their views in applying financial statement analysis in their evaluations.
Practitioners apply financial ratios, for instance, to forecast the future success of
companies, while the researchers' main interest has been to develop models exploiting
these ratios. Many distinct areas of research involving financial ratios can be
discerned. Historically. one can observe several major themes in the financial analysis
literature. There is overlapping in the observable themes, and they do not necessarily
coincide with what theoretically might be the best founded areas. The existing themes
include the functional form of the financial ratios, i.e. the proportionality discussion,
distributional characteristics of financial ratios. classification of financial ratios,
comparability of ratios across industries, and industry effects, time-series properties
of individual financial ratios, bankruptcy prediction models, explaining (other) firm
characteristics with financial ratios, stock markets and financial ratios, forecasting
ability of financial analysts vs. financial models and estimation of internal rate of
return from financial statements. The history of financial statement analysis dates far
back to the end of the previous century by Horrigan (1968). Technically, financial
ratios can be divided into several. sometimes overlapping categories. A financial ratio
is of the form X!Y, where X andY are figures derived from the financial statements
or other sources of financial information. One way of categorizing the ratios is on the
basis where X andY come from which are stated by Foster (1978), pp. 36-37, and
Salmi. Virtanen and Yli-Olli (1990), pp. 10-11. In traditional financial ratio analysis
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both the X and the Y are based on financial statements. If both or one of them comes
from the income statement, the ratio can be called dynamic while if both come from
the balance sheet it can be called static. The concept of financial ratios can be
extended by using other than financial statement information as X or Y in the X/Y
ratio. For example, financial statement items and market based figures can be
combined to constitute the ratio.
l.l.Objectives of the Study
The main objective of the study is to determine whether the special investment
venture-capital company (Global Maritime Ventures Berhad), which is created by
the Malaysian government to boost the Maritime Industry in Malaysia, has been
successful in achieving its objectives. The study will also compare the
performance of the selected listed companies in the maritime industry in Malaysia
and the Global Maritime Ventures Berhad (GMVB). The study will use GMVB as
a benchmark.
1.2.Significance of the Study
This research has significance for many stakeholders:
l) Malaysian Government
This research can be used as a reference by the Malaysia Government to
assess its long-term planning to boost the Malaysian maritime industry in the
near future.
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2) Foreign and Domestic Investors
It can be used by the potential and existing mvestors both foreign and
domestic to analyze the profitability of investing in the Malaysian maritime
industry.
3) Banking and Financial Institution
Banking and Financial Institution can use the research as reference in gaining
the insight view of how effectively the maritime industry in Malaysia is
performing. so that they can provide more financing products to potential
clients involve in the maritime industry in Malaysia.
4) Academicians I Researchers
This research can be used by Academicians and Researchers as a base or
reference for future research to increase the efficiency of maritime industry in
Malaysia.
5) Civilians
Civilians can use the research as a guideline and reference to evaluate the
steps that the Malaysian Government has taken to improve the maritime
industry and thus create more job opportunities for the civilians.
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