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The purpose of this study is to review and evaluate the salient features of stock market manipulation in Malaysia. The research questions used are: Who was involved? How it happened? What were the consequences?

This study has been conducted using content and thematic analysis. This study includes multiple sources of information to help establish the stylized facts and it uses cases that have been prosecuted in Malaysia for 2005-2015.

This study presents arguments and empirical data supporting the view that the stock market manipulation was conducted by those in a privileged position and with access to information. Ethical failure, involving greed, self-interest, dishonesty and a preoccupation with a quick profit, could explain why stock market manipulation happened. Manipulation harms legitimate investors, as share prices and earnings of companies are affected.

A better understanding about the prevalence, characteristics and consequences of the market manipulation problems will be useful for stakeholders, investors and policymakers in the financial industry for promoting and maintaining a fair, efficient and transparent stock market.

The originality of this paper lies in examining and presenting interpretations based on contemporary phenomenon within the real-life context of Malaysia. There is little study or literature that focuses on Malaysia, especially in examining stock market manipulation by integrating finance and management perspectives to form a comprehensive understanding of the issue.

This study aims to investigate Granger-causal relations between the Ringgit-USD exchange rate and selected domestic and international economic variables after the flotation of the Ringgit beginning with 25 July 2005.

The study uses lag-augmented vector autoregression (LA-VAR) developed by Toda and Yamamoto (1995) to test for Granger-causality. To visualize short-run dynamics in the Malaysian Ringgit (RM)-USD exchange rate to shocks in predictor variables, generalized impulse-response functions (Pesaran and Shin, 1998) are derived from the estimated LA-VAR models.

Results based on LA-VAR generalized impulse responses and data measured in daily frequency indicate strong Granger-causal relationships with the Dow Jones Industrial Average and oil prices. Evidence is also indicative for a causal relationship with the Shanghai Composite Index. Positive shocks in these three variables lead an appreciation of the Ringgit.

These results provide insights for policymakers in East Asia in their attempt to manage the floating of their currency.

The paper adds to existing empirical literature in three ways. First, it investigates the RM-USD exchange rate after its managed flotation beginning with 25 July 2005. Second, the study provides results for exchange rates measured in two frequencies, namely, daily and monthly. Third, the empirical LA-VAR model applied includes variables capturing economic and financial conditions in China. Prior literature puts a focus on macroeconomic conditions in the USA. Yet, since 2009, China has been the largest trading partner of Malaysia.

This report examines the recent developments and trends relating to the Chinese government’s policy actions and the key issues that determine the choice of exchange rate regime in China. An up-to-date “stock-take” of the economic indicators is conducted to determine what is suitable for China in light of the rapidly evolving nature of the world economy and trading environment. This paper discusses the role of economic development, trade competitiveness, capital flow, foreign exchange reserve, and RMB internationalization in the determination of the RMB exchange rate regime.

This research uses an inductive approach to gain a fine-grained understanding of the complex, multifaceted aspects of China’s exchange rate policy. A combination of statistical analysis, including basic descriptive statistics, trend analysis, and a correlation study are used to explore the association between various indicators and their implications. The report also draws on analysis of a broad range of data sources and the work of numerous researchers and research institutions.

A more flexible exchange rate regime can play a complementary role towards rebalancing the Chinese economy by raising the buying capacity of families, rebalancing growth towards domestic consumption, and reducing reliance on export. China’s price elasticity of the demand for exports was relatively low that the appreciation of the Chinese currency has almost no influence on optimizing China’s trade balance. A more flexible two-way flow in RMB would be suitable under the current cash flow scenario in China. Reduced intervention will facilitate further adjustment in reserves. Lastly, in the early stage of RMB internationalization, flexibility in the exchange rate is one of the factors that influences its growth prospect as a reserve currency.

The findings and conclusion are derived based on the latest empirical information, statistical evidence, and economic theory. This inquiry does not build on a theory, and aims to neither verify a theory, nor test hypotheses. Rather, it aims to demonstrate, assess, and explain significant roles that various economic factors play in shaping the future exchange rate regime of China.

This paper presents the rationale behind a more flexible two-way exchange rate, by assessing the latest empirical data and theoretical explanation that support such a move.

The aim of this paper is to investigate the circumstances and events surrounding bull runs in Malaysia from 1990 to 2015. The research question posed here is: What were the historical circumstances and events surrounding bull runs in Malaysia?

Case study approach is used. This research resorts to multiple resources such as academic journals, macroeconomic statistics, official publications, stock broker reports, annual reports of listed companies as well as articles from regional newspaper and magazines.

The results show that the bull runs in recent years happened with lower volatility after the Asian Financial Crisis. It can be conjectured that the specific environment in which the bull runs occurred can be somewhat different from period to period. Based on stylised facts and historical evidence, this study identified five major themes that were behind the bull markets in Malaysia, which include capital flow, spill-over effect from global development, change in ratings, speculative activities and investors’ sentiment, as well as government policies announcement. The findings have practical implications for investors who seek to understand and predict stock market boom through lessons learned from historical perspective.

The analysis in this paper may have limitation, as the facts gathered are from secondary sources, which sources are derived from the observations of others. Therefore, secondary sources inevitably reflect the assumptions and biases of the people who wrote them. As the availability of data is limited by factors that are not under the control of the researcher, results may likely be limited in their generalizability. This case study does not attempt to establish causality or relationship between macroeconomic variables and stock prices. Further studies would therefore be necessary to examine the evolving nature of the relationship that may exist.

The findings of this study have significant policy implications for Malaysia, and also for other emerging markets. First, a prudent macroeconomic measures and concerted stance on fiscal, monetary and exchange rate policy to improve fundamentals and smooth volatility in the business cycle is vital for a bullish stock market. Second, the stock market derived significant benefits from openness to foreign capital and its resilience can be enhanced by fostering deeper and more liquid capital markets with diverse institutional investors, including domestic and foreign participants. Third, the environment that affects a stock market could be related to the political, regulatory and global environments. Malaysia stock market is susceptible to extreme events, capital flow, speculative activities and government interventions. Having a good grasp of which themes are operative at any point in time is central to investment decision making. Continuous rebalancing of portfolios based on information arriving in the market is also vital.

Previous studies on Malaysian stock market movement focus on quantitative analysis based on macroeconomic variable. This research is original in terms of giving background information and additional context to explain phenomena missed by quantitative research methods. The construction of quantitative model is also constraint by the measurability of non-quantitative data and data with different frequencies (such as annual, quarterly and monthly data). Therefore, it is important to contemplate the importance of non-quantitative factors, such as political, legal, regulatory and governance considerations. This study seeks to fill in this void.