ipl-logo

Macroeconomic Variables

1097 Words5 Pages

This is an introductory chapter for explaining an overview of the research topic which is the effect of macroeconomic variables on Malaysia stock market. This paper will examine the relationship between stock market return and selected macroeconomic variable such as MS, ER, IR and COP in Malaysia. This study aims to investigate the monthly movement of KLCI stock returns which is influenced by selected macroeconomic variables in Malaysia. This chapter will cover seven subsection which included background of study, problem statement, research questions, research objectives, significance of the study, definitions of the key terms and organizational of research.

1.1 Background of the study
Malaysian stock market is one of the largest stock market …show more content…

Hence, it had created the uncertainty due to the event of instability as well as disrupt the performance of the stock market itself. This paper will focus on the Malaysian stock market returns in the monthly basis. Kuala Lumpur Composite index (KLCI) is used as the indicator to the stock market returns. KLCI which represents the top 30 companies and recognize as a stock market index since 1986. It was upgraded to the FTSE Bursa Malaysia KLCI and it serves as an accurate performance indicator for the Malaysia stock market. The stability of the macroeconomic variables will help to stabilize KLCI returns as …show more content…

The policy maker or government should be careful when attempt to influence the economy through changes in macroeconomic variables such as money supply, interest rates, or the exchange rate. They may unintentionally suppress the stock market and reduce capital formation which itself would lead to further slowdown of the economy (Syaheera & Shaari, 2011).

This paper evaluates the dynamic interactions among four variables such as MS, ER, IR and COP and stock market return whether have significant impact or not. If there has significant relationship, it can conclude that the fluctuation of Malaysia stock market is strongly associated with the economic activities. On the contrary, if there has no significant relationship, it shows and proves that the volatility of Malaysia stock market is not correlated with the economic activities.

1.2 Problem

Show More
Related

  • Explain How Does The Federal Government Regulate The Economy

    279 Words  | 2 Pages

    How does the federal government regulate the economy for the benefit of the public? Discuss specific policies and programs, including their effects. The federal government has many programs and abilities to regulate the United States economy. On of which is the fiscal policy which allows government to raise and spend money.

    Read More

  • Dollarama Company Case

    990 Words  | 4 Pages

    This is the measurement of the levels of investor confidence which influences the value of a firm in the

    Read More

  • Great Depression Dq

    643 Words  | 3 Pages

    Investors tried to withdraw their reserves and unfortunately even the banks had invested in stock. Firstly, this essay will discuss and look at the monetary

    Read More

  • Business Cycles Affecting America's Economy

    319 Words  | 2 Pages

    One important aspect that affects the nation's economy is the Aggregate supply and demand business cycles and GDP. The total request is the amount somebody will spend on merchandise and ventures which is aggregate supply. Total supply is how much item is accessible to the business sectors. Business cycles are the cycles of financial development. Gross domestic product is the total national output.

    Read More

  • The Presidential Cycles Influence On The Stock Market

    797 Words  | 4 Pages

    New York Stock and Exchange Board was found March 8, 1817. In the years that followed, people from all walks of life have developed beliefs that define their logic about the stock market cycles. Throughout human history, humans have attempted to relate cycles (natural and artificial) to all aspects of life as we know it. These beliefs range from planetary alignment, prophesy, modern computations, outcome of sport events, and even presidential elections.

    Read More

  • Similarities And Differences Between The Single Index Model And Capital Asset Pricing Model

    1217 Words  | 5 Pages

    Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.

    Read More

  • Factors Affecting Business In Brazil

    1044 Words  | 5 Pages

    Business Implications Politics: A political unstable environment can be a deterrent for many organisations. Businesses rely on forecasts to predict their future. In a political unstable environment; inflation, taxes and the price of labour can all rise quickly and the government can also introduce many rules and regulations that affect businesses. The current political situation in Brazil makes the economy difficult to predict which can leave businesses uncertain to which direction the company is moving.

    Read More

  • Efficient Market Hypothesis Essay

    1444 Words  | 6 Pages

    Several studies in the 1950s documented features of stock market that resembles those of an efficient market. Friedman (1953) found that efficient market can exit in a situation where trading strategies of investors are correlated, due to the existence of arbitrage. Kendall (1953), analyzing 22 weekly price series, found that stock prices movement at a close interval moved randomly. He mentioned that prices behaved like wondering series and showed very low serial correlation. Since individual stock price was not found differ significantly with the average, prediction of stock prices even a week ahead became very difficult.

    Read More

  • The Four Causes Of Inflation In Trinidad And Tobago

    1729 Words  | 7 Pages

    Inflation is the rate at which the general level of prices for goods and services is rising, and, then purchasing power falling over a period of time. When price level rises, dollar buys fewer goods and services. Therefore, inflation results in loss of value of money.

    Read More

  • The Standards 500 Index

    643 Words  | 3 Pages

    (S&P Dow Jones Indices,

    Read More

  • Macroeconomic Factors Affecting Apple Company

    2241 Words  | 9 Pages

    MACRO ENVIORNMENT: Macro environmental factors are those irrepressible external factors that affect the company’s decision making process. These factors include demographic, socio-cultural, economic, political-legal and also the natural factors. Demographic factors – Demographic factors include age, sex, religion, location, thickness, occupation etc. Apple Company has 217 stores in United Stated and about 273 stores worldwide.

    Read More

  • Capstone Reflection

    1612 Words  | 7 Pages

    With the recent complicated economic financial environments, there may be some abnormal relationships comparing with the theories. We cannot examine them in the project. 3.

    Read More

  • Single Index Model And Capital Asset Pricing Model

    1129 Words  | 5 Pages

    Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.

    Read More

  • Factors Affecting Macro Environment

    1022 Words  | 5 Pages

    Micro Environment consists of factors or elements close to business that have a direct impact on the business operations and success. It also affects the business performance and various other decisions that are critical to business. Some of the micro-environmental factors include customers, employees, distribution channels, suppliers, media and the general public. Macro Environment are the major external and uncontrollable factors that influence an organization 's decision making, and affect its performance and strategies. The macro-environment consists of forces that originate outside of an organization and generally cannot be altered by actions of the organization.

    Read More

  • Roles Of Money In Macroeconomics Essay

    1772 Words  | 8 Pages

    ROLE OF MONEY IN MACROECONOMICS 1. Introduction Money can be seen as the medium of exchange which is acceptable while transaction is being undertaken between two parties. Some of the common forms of money are: - Commodity money: This is when the value of the good represents its value in terms of money like gold or silver. - Fiat money: This is when the value of the good is less than the value it represents - Bank money: It is the accounting credits that can be used by the depositor Money serves a variety of crucial functions in the economy and this is why it has gained an unparalleled influence in the matters of economy at micro as well as macro levels. Some of the features of money that make it so important for any economy are as follows:

    Read More

More about Macroeconomic Variables

Open Document