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IN THE NAME OF ALLAH THE MOSTPOWERFUL AND THE MOST BENEFICIAL

Research proposal

Presentation slides

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HOW THE STOCK EXCHANGE INDEXINCREASES AND DECREASES WHAT

ARE THE FACTORS RESPONSIBLE FOR

IT"

Proposal submitted on:

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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 everyinvestor should be aware of before getting

involved in market investing.

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VARIABLES TO STUDY:

Inflation and deflation:Inflation can have an adverse affect on the stock

market, according to the article titled "Forces that MoveStock Prices" as published on the financial websiteInvestopedia. Inflation is the rate at which the price ofgoods and services increases. It is the result of severalfactors, including a rise in the cost of manufacturing,transporting and selling goods.

Interest rates:Interest rates as established by the Federal ReserveBoard and individual banks can have an affect on thestock market, according to an informational pamphlettitled "What Drives Stock Prices" published by the New

York Stock Exchange. Higher interest rates mean thatmoney

Foreign markets :Economic trends in foreign markets can have an effecton the stock market in the United States, according tothe article titled "Riding the Economic Roller Coaster"published in "Inc." magazine. When the economies inforeign countries are down, American companies cannotsell as many goods overseas as they used to.

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OBJECTIVE OF THE STUDY

To understand the stock exchange practices

To provide knowledge to new investorsabout the market

How the company performance increase itsshare worth on the stock exchange index

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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

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LITERATURE REVIEWInflation 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 compensatefor 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 fromthe 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 eects of speculation

on asset prices (Summers and Summers(1989), Niehans(1994)).

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RESEARCH METHODOLOGY/DESIGN

Secondary data will be analyzed to understand

the history of stock exchange. Investment booksand 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 stockexchange. 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.

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CONTENTS OF THE RESEARCH

Introduction of the stock exchange

Research methodology

Literature review

Findings

Conclusion and recommendations

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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 analyzeits 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

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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)).

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PRESENTED BY:

Mohammad Irfan Malik

MBA III Section A

Roll Number 51

Federal Urdu University

Karachi