Macroeconomic Variables, Financial Ratios and Property Stock Prices in Malaysia

International Journal of Business and Innovation. Vol. 3, Issue 1, 2017

Title: Macroeconomic Variables, Financial Ratios and Property Stock Prices in Malaysia

Author: Wong Kan Shin, Hassanudin Mohd Thas Thaker

Abstract
This study aims to investigate the relationship that property stock price has with macroeconomic variables (GDP growth, exchange rate, and oil prices – model one) and financial ratios (debt ratio and return on equity – model two). Multiple regression analysis was carried out to test the data with KL property index (KLPR) and stock price of 30 property companies listed and active on Bursa Malaysia for the year 2010 to 2014. The results showed that model one variables are significantly related to property stock price. Gross domestic production (GDP) growth has a negative relationship, while exchange rate and oil prices are positively related to property stock price in Malaysia. For model two, debt ratio was not found to be related to or predict property stock price, while return on equity has a significantly positive predictor.

Keywords: Gross domestic production growth, exchange rate, oil prices, debt ratio, return on equity, property stock price, Malaysia.

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