IN THE NAME OF ALLAH THE MOST

POWERFUL AND THE MOST BENEFICIAL

Research proposal Presentation slides

Proposal submitted on:

HOW THE STOCK EXCHANGE INDEX

INCREASES AND DECREASES WHAT ARE THE FACTORS RESPONSIBLE FOR IT"

INTRODUCTION OF THE TOPIC

Many kinds of factors affect the stock market. Social unrest can cause the market to drop, while a company discovering a new source of renewable energy can cause stock market prices to soar. Several economic factors affect the stock market that every investor should be aware of before getting involved in market investing.

VARIABLES TO STUDY:
Inflation and deflation:
Inflation can have an adverse affect on the stock market, according to the article titled "Forces that Move Stock Prices" as published on the financial website Investopedia. Inflation is the rate at which the price of goods and services increases. It is the result of several factors, including a rise in the cost of manufacturing, transporting and selling goods.

Interest rates:
Interest rates as established by the Federal Reserve Board and individual banks can have an affect on the stock market, according to an informational pamphlet titled "What Drives Stock Prices" published by the New York Stock Exchange. Higher interest rates mean that money

Foreign markets :
Economic trends in foreign markets can have an effect on the stock market in the United States, according to the article titled "Riding the Economic Roller Coaster" published in "Inc." magazine. When the economies in foreign countries are down, American companies cannot sell as many goods overseas as they used to.

OBJECTIVE OF THE STUDY

To To

understand the stock exchange practices

provide knowledge to new investors about the market the company performance increase its share worth on the stock exchange index

How

IMPORTANCE OF THE STUDY

The study has importance for the students doing their specialization in the field of finance as well as for the new investors who are willing to invest in the stock exchange. The study is important to know the market forces and factors responsible for the change in stock index so that the investor may be aware of the forces which can bring the share price up or down

LITERATURE REVIEW
Inflation or recession - which do stock investors fear the most? Since most well-allocated stock investors are also bond investors, the question becomes even more important. Rising Interest Rates The most common treatment for inflation is for the Fed to raise interest rates. Rising interest rates play havoc with bonds since new bonds pay more interest than older bonds. To compensate for the difference in interest rates, bond prices fall. Interest rate increase slows down stock exchange A surprise interest rate cut of one percentage point can send stock prices up by seven to nine percent, says Bjorn land, professor of economics at BI Norwegian School of Management. This is a stronger link than in other similar analyses of data from the US. The relationship between trading volume and volatility is of some importance. For example, transaction taxes are often proposed as a mechanism for reducing the e ects of speculation on asset prices (Summers and Summers(1989), Niehans(1994)).

RESEARCH METHODOLOGY/ DESIGN

Secondary data will be analyzed to understand the history of stock exchange. Investment books and internet material will be analyzed. The focus of study will be to analyze the stock market of Pakistan specially Karachi Stock Exchange KSE100 index as benchmark. This research is partly qualitative and partly quantitative. The data of different industries companies will be analyzed in accordance with their share values and the factors responsible for it and the effect of those factors on the performance of stock exchange. The history of the companies will also be taken into consideration. It will also be analyzed that how the companies business practices effect their share value and their share to the stock market.

CONTENTS OF THE RESEARCH

of the stock exchange Research methodology Literature review Findings Conclusion and recommendations
Introduction

SCHEDULE OF THE WORK

As it is mention in the research methodology the data will be collected through secondary sources (books, internet, and research articles literature review) initially I will emphasize on the current mechanism of the stock exchange and analyze its current performance and position. I will review the literature available about stock exchange Then I will analyze the finding and on the basis of findings conclusion and recommendation will be made. It is estimated that it will take five to six weeks to complete this project

REFERENCES
"Inc." Magazine: Riding the Economic Roller Coaster New York Stock Exchange: What Drives Stock Prices Investopedia: Forces the Move Stock Prices PBS Online News hour: Economic Downturn http://lanles.williams.edu/ tdvorak Kim and Wei(2000) and Choe et al(1999) Stieglitzs (1998) article in the Financial Times and Krugmans(1997) in Fortune. (Tobin(1984), Eichengreen and Wyplosz(1996)). Tsar and Werner (1995)). Summers and Summers(1989), Niehans(1994)).

PRESENTED BY:

Mohammad Irfan Malik MBA III Section A Roll Number 51 Federal Urdu University Karachi