THE POTENTIAL FOR A STOCK INDEX FUTURES IN MALAYSIA: AN EMPIRICAL STUDY OF THE OPINIONS AND PERCEPTIONS OF MALAYSIAN FUND MANAGERS

Abstract

This study was conducted with the objective of identifying and analysing the opinions and perceptions of Malaysian fund managers towards the use of a stock index futures contract based on the Kuala Lumpur Stock Exchange Composite Index (KLSECI). The study utilised a survey method, and the analysis was conducted in three stages: among all respondents, among potential non-participants, and among potential participants. The general findings indicated that all fund managers, irrespective of their sector, held similar opinions and perceptions regarding factors relating to incentives, deterrents, and administrative problems. Among potential non-participants, the findings revealed a lack of awareness of the economic uses of futures trading and of the mechanics of trading futures. Among potential participants, the results showed that they shared similar perceptions of the trading activities considered of great concern when dealing with futures.