DYNAMIC RELATIONSHIP BETWEEN
MACROECONOMIC VARIABLES AND FINANCE SECTOR MARKET INDICES
MOHD SHAFIQ BIN BOHARI 2011645402
SHAHIZA BINTI MOHAMMAD 2011823014
BACHELOR OF BUSINESS ADMINISTRATION (HONS) (FINANCE)
FACULTY OF BUSINESS MANAGEMENT UNIVERSITI TEKNOLOGI MARA
MALACCA CITY CAMPUS
JULY 2013
ii DECLARATION OF ORIGINAL WORK
BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE
FACULTY OF BUSINESS MANAGEMENT UNIVERSITI TEKNOLOGI MARA
MELAKA.
“DECLARATION OF ORIGINAL WORKS”
I, MOHD SHAFIQ BIN BOHARI, 900919-14-5533 Hereby, declare that,
This work has not previously been accepted in substance for any degree, locally or overseas and is not being concurrently submitted for this degree or any others degrees.
This project paper is the result of our independent work and investigations, except where otherwise stated.
All verbalism extract have been distinguished by quotation and sources of our information have been specifically acknowledge.
Signature:……….. Date: ………..
iv LETTER OF SUBMISSION
25TH JUNE 2013
EN. AMIRUDIN BIN MOHD NOR Senior Lecturer
Bachelor of Business Administration with Honors (Finance) Faculty of Business Management
Universiti Teknologi Mara 40450 Melaka
Dear Sir,
SUBMISSION OF PROJECT PAPER
Attached is the project paper titled “DYNAMIIC RELATIONSHIP BETWEEN MACROECONOMIC VARIABLES AND FINANCE SECTOR MARKET INDICES” to fulfill the requirement as needed by the Faculty of Business Management, Universiti Teknologi Mara.
Thank you.
Yours sincerely,
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MOHD SHAFIQ BIN BOHARI SHAHIZA BINTI MOHAMMAD
2011645402 2011823014
Bachelor of Business Administration (Hons) (Finance)
xii ABSTRACT
The aim of this study is to investigate the relationship between Exchange Rate, Inflation Rate, Money Supply, and Interest Rate to the Finance Sector Market Indices. The study used Simple Linear Regression and Multiple Linear Regression in order to find the relationship among those indices. The monthly closing data were collected from January 2005 until December 2012. From the result, it reveals that certain variables have a significant negative relationship towards Finance Sector Market Indices and the others are insignificant. It means that there are macroeconomic variables that interdependence towards the Finance Sector Market Indices.
Based on the results, it shows further understanding of the relationship between the macroeconomic variables to the Finance Sector Market Indices and it may be useful for regulators, investors, and speculators.
vi Table of content
List of content Pages
Title page i
Declaration of Original Work ii
Letter of Submission iv
Acknowledgement v
Table of Contents vi
List of Tables ix
List of Figures x
List of Abbreviations xi
Abstract xii
CHAPTER 1 – INTRODUCTION
1.0 Background of study 1
1.2 Problem Statement 4
1.3 Research Objectives 5
1.4 Research Questions 5
1.5 Significant of Study 6
1.6 Scope of Study 7
1.7 Limitation of Study 8
1.8 Definition of Terms 9
1.9 Research Reporting Structure 10
CHAPTER 2 – LITERATURE REVIEW
2.0 Introduction 11
2.1 Literature Review 11
2.2 Conclusion 16
