Influence Of The End-Of-The-Week Performances of The New York Stock Exchange And The Tokyo Stock Exchange On The Beginning-Of-The-Week Performance Of The KLSE

Abstract

Malay past studies suggested that considerable gains were available to investors who diversify ent portfoliointernationally. This is due to the low positive or negative correlations the world's stock markets. On the other hand, if a market is highly influenced by market, which means that the correlation between these markets is high and positive, international diversification involving these two markets will not result in considerable However, if an earlier performance of a market is highly correlated with the current ¢ of another market, the this relationship can be exploited profitably. In this we look atthe issue of stock market time lag correlation between the advanced markets U.S and Japan) and the Kuala Lumpur Stock Exchange (KLSE), and the influence advanced markets might have on the KLSE. Specifically, this paper focuses on of the end-of-the-week performances of the New York Stock Exchange (NYSE) Tokyo Stock Exchange (TSE) on the beginning-of-the-week performance of the KLSE. sud covers a period from January 1983 to December 1990. In general, the results do some degree of influence of the NYSE and TSE on the KLSE, but the influence stable over time.