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Stock Market Index Research Paper

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The stock market index is by means of in calculating the evaluation of stock market unpredictability by calculating the stock prices. Nearby are two kind of stock market index, market value weighted index and price-weighted index. The market value index is a stock market index weighted according to the market capitalization. Standard&Poor500 (S&P500) is one of the accepted market value indexes, which based on 500 leading companies traded in United States market. For the price-weighted index, it is a stock market index weighted according to the stock price. The Dow Jones Industrial Average (DJIA) is the most well known price-weighted index.

Bursa Malaysia was formerly familiar as Kuala Lumpur Stock Exchange (KLSE) is a very influential swap …show more content…

The Gross Domestic Product (GDP), balance on current account of Malaysia have fall during the period. The Kuala Lumpur Composite Index, which is a major stock market index, based in Malaysia also experiences an acute decline from 1997 until 1998. According to Hasan (2003), escape of foreign portfolio investment from the country was the reason of this experience. Stock market show business is a significant role in the economic growth of country. Another financial crisis happened in the year 2008. It has been extremely demanding for universal business. According to Chin (2009), KLCI have knock down 38.9% at the year 2008. Base on the study done by Angabini and Wasiuzzaman (2008), the financial crisis has a enormous crash to the world’s financial market. For example, decline in liquidity in banking system, credit availability and investor confidence. Malaysia experiences a main decline in KLCI value after Asian Financial Crisis (AFC), which is around 45%. According to Hasan (2003) on the revival of financial crisis, to put the economy reverse to track, International Monetary Fund (IMF) had implement stretched monetary, fiscal policies for

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