: Investments Analysis &Decision Making

4331 words - 17 pages

Question1Forecast of GDP in 2014

GDP at purchase prices

Changing of GDP purchases price

(RM)

2010

676,653

2011

711,351

= 0.05 (5%)

2012

751,471

=0.06 (6%)

2013

786,526

= 0.05 (5%)

Total percentage

16%

Average percentage

5.3%

Forecast of inflation rate in 2014

Inflation rate (%)

2010

1.7

2011

3.2

2012

1.6

2013

1.7

Total percentage

8.2

Average percentage

2.1

Forecast of interest rate in 2014

Average Interest rate in the year (%)

2010

2.45

2011

2.88

2012

2.99

2013

2.30**

Total percentage

10.65

Average percentage

2.67

** Average interest rate within eight month(January to August)Forecast of unemployment rate in 2014

Interest rate (%)

2010

3.3

2011

3.1

2012

3.0

2013

3.1

Total percentage

12.5

Average percentage

3.1

Forecast of FBMKLCI Index in 2014

FBMKLCI Index

Changing ofFBMKLCI Index

2010

1,518.91

2011

1,530.73

= 0.0078 (0.78%)

2012

1,688.95

= 0.1034 (10.34%)

2013

1861.06

= 0.1019(10.19%)

Total percentage

21.31%

Average percentage

7.1%

The overall of economy will be affecting the stock return. Therefore, analysis and forecast on the overall current and future stock market and country's economy is indispensable to the investors, which can base on historical event and data. Although this action cannot guarantee investors avoid the investment risk entire, however, it enables investor predicts the likely future outcomes, and avoided or minimize the risk that maybe faced. In this research, GDP, inflation rate, interest rate, unemployment rate and FBMKLCI are used as indicators of economy forecast.The gross domestic product (GDP) is identified as the market value of all finish goods and services that produced by the country during the specific period (book). It is includes all the individual consumption, private products, government spending, investment, foreign trading balance (the export minus the import) that occurred within the country. Generally, it is used to measure the economic health and strength of economic. In additional, the fluctuation of GDP is directly influence the companies' performance. If GDP growing slowly, the growing of company's revenue and profit will slowed, and then provides negative impacts to stock market because of lack interested by investor.It is clearly that the expected GDP Growth of Malaysia in 2014 will be 5.3% differ from 2013 GDP 5% from our research and calculation. With theuncertainty(election) politicshas beeneliminated,the governmentin the nextterm of officewill be able tofocus onmanagingthe economy.In any case,political stabilityis alsoan important factor inpromotingstableeconomic growth.Government to takeboldmeasuresto reduce thebudget deficitwill be able toincrease thepotential for economic growthin Malaysia, while avoidingthe creditrating wasdowngraded.For this reason, many research institutions stillthinkMalaysia willachieve goodeconomic...

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