Influence of Advanced Markets on the Malaysian Market
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Abstract
There is a general belief among investors and speculators in Malaysia that a small and thinly traded stock market (or an emerging market), such as the Malaysian market,is highly influenced by the big and advanced markets of the US and Japan. Specifically, this paper looks at the influence of the US (NYSE) and the Japanese (TSE) markets, on the Malaysian (KLSE) market. This study uses end-of-the-week Index changes (friday's and Saturday's performance of the US and Japanese markets, respectively) of the advanced markets and the begining-of-the-week (monday's performance of the Malaysian market) Index changes of the emerging market for a period from January 1983 to December 1990 In general, the results indicate some validity in the claim that the advanced markets of the US and Japan do influence the Malaysian market. However, the influence is not stable over time. ABSTRAK Terdapat kepercayaan umum di kalangan pelabur dan pespekulasi di Malaysia bahawa pasaran kecil dan nipis (atau pasaran membangun), seperti pasaran Malaysia, amat dipengaruhi oleh pasaran besar dan maju Amerika Syarikat dan Jepun. Kertas ini melihat kepada pengaruh pasaran Amerika (NYSE) dan Jepun (TSE) terhadap pasaran Malaysia (KLSE). Kajian ini menggunakan perubahan Indeks hujung minggu (prestasi hari Jumaat bagi pasaran Amerika dan prestas hari Sabtu bagi pasaran Jepun) pasaran maju dan perubahan Indeks awal minggu (prestasi hari Isnin bagi pasaran Malaysia) bagi pasaran membangun untuk tempoh dan Januari 1983 hingga Disember 1990 Secara amnya terdapat kebenaran pada pendapat yang menyatakan terdapat pengaruh pasaran Amerika dan Jepun terhadap pasaran Malaysia. Namun, pengaruh tersebut tidaklah stabil mengikut masa.