Do Money Supply, Inflation, and Interest Rate Matter Towards Influencing Malaysian Stock Market Performance?
Do Money Supply, Inflation, and Interest Rate Matter Towards Influencing Malaysian Stock Market Performance?

Summary/Abstract: This paper investigates the relationship between macroeconomic indicator and Shariah Compliant stock performance in Malaysia for two different periods which are before and after Bursa Malaysia joined forces with FTSE from 1999 to 2013. After controlling for multi-collinearity problem, the findings indicate that macroeconomic variables play an important role in determining Shariah Compliant stock performance in the Malaysian economic. One of the notable finding is that only money supply (M3) seems to significantly and negatively associate with the KLSI before FTSE join forces with Bursa Malaysia. After joining FTSE and Bursa Malaysia, only money supply (M3) has a positive and significant relationship towards FBMES. However, variables such as exchange rate, interest rate, and consumer price index have a significant negative relationship with FBMES. Furthermore, Crude Oil Price (COP) does not significantly influence Shariah Compliant stock performance in Malaysia for both periods.

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