Research Strength: Capital Market Behaviour
(affiliated with the Malaysian Business Unit and the Banking & Finance Unit)
For full list of the Campus Research Strengths, please click here
A well functioning financial market is the main engine that drives the development and growth of any economy in the world. Financial markets encompass several institutions such as the money and capital markets; commodity and equity markets; interest rates and foreign exchange markets; and its relevant derivative markets.
Our interest lies on the functioning of capital markets that comprises primary and secondary debt and equity markets. Capital markets have the main function of discovering prices of financial assets (debt and equity) that moves other financial markets in an economy. Specifically the stock/equity market and its sensitivity to a wide range of factors often becomes the benchmark of a country’s economic wellbeing.
Besides that, the market value of a company’s equity is a sensitive variable that depends on the quality of corporate governance and reporting practices, corporate finance, company ownership structure and its board announcements, the legal and political policies and other aspects of investor’s protection.
The debt market (and monitoring role) on the other hand carries various forms of bond portfolios and financial loans that depend on interest rates structures, central bank policies on inflations and exchange rate regimes, external trade, gross domestic product, balance of payments and other economic policies