The objective of this study is to analyze the influence of macroeconomic variables (volatility foreign exchange rates, foreign exchange rate returns & inflation rates) and world crude oil price factors on stock market returns for nine selected sectors in Malaysia. By adapting the Ordinary Least Square Method (OLS) in developing the estimating modeling, the monthly-frequency time series data from September 2003 to November 2016 is used. The results showed that world crude oil prices have different influences across sectors. World crude oil prices have a positive and significant impact on the Plantation sector ( = .315, <.01). On the contrary, it exerted a negative and significant influence on the Trade & Services ( = -.076, <.01), Technology ( = -.591, <.01), Real Estate ( = -.184, <.01), Mining ( = -.251, <.01), Industrial ( = -.0327, <.01), Consumer Products ( = -.151, <.01) and Construction ( = -.079, <.01). In addition, the findings show macroeconomic variables also give different roles across sectors. In conclusion, most of the sector's returns in Malaysia are influenced by the world crude oil price factor. However, there is no doubt that macroeconomic factors such as rate volatility, foreign exchange and inflation rates can also have an impact on sector returns in Malaysia. The implication of this study is important for investors and prospective investors, as it can help in making investment decisions for a sector.
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In-Text Citation: (Yusof & Rambeli@Ramli, 2020)
To Cite this Article: Yusof, M. K. A., & Rambeli@Ramli, N. (2020). The Influence of World Crude Oil Prices and Selected Macroeconomic Factors on Stock Market by Sector in Malaysia. International Journal of Academic Research in Business and Social Sciences, 10(3), 656–664.
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