How Are Singapore Share Market Prices Getting Affected? |
Posted: February 27, 2017 |
There’s always a hot topic of discussion among the traders is – How SGX share market prices are getting affected? What are the factors affecting the prices? And how to plan for successful profit booking investment? Here, in this blog post, we have tried to answer you for these crucial questions. Which may definitely help you to build a better understanding of market and plan for a successful trading. In order to examine the fluctuations of stock prices in SGX market, microeconomic variables like interest rate, exchange rate, gross domestic product (GDP) and consumer price index (CPI) must be taken into consideration. Starting from the scratch- How can Interest Rates Affect Stock Market Prices?According to Gordon Growth model established by Myron J. Gordon in 1956. P=D1/ (k-g) Where, P = stock price, D1= dividends after the first period, the g= constant growth rate of the dividends, and k= required a rate of return on the stock. Stock prices are inversely proportional to the interest rate. Based on the above-stated model interest rate affect stock prices in 2 different manners they are-
How Singapore Economy affect SGX Stock?In order to analyze the effect of Singapore’s GDP on SGX stock market and marketer’s investment, a theory called “Wealth Effect” can be taken into consideration. This theory states that stock market exerts a reverse effect on economic activity. This can be understood as if the investor is having higher purchasing power and is willing to spend a greater part of his income on stock purchasing, the stock market level increases and ultimately the GDP of the country. Advance Announcements by MAS (Monetary Authority of Singapore)The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) work together with a common aim to strengthen the securities market in Singapore. Moving ahead with this aim they are responsible for-
Based on the above-discussed topics we can conclude that GDP and interest rate have a positive relationship with the Singapore stock price index. For further assistance and query and to access more valuable pragmatic sets of insights sign up with us at Equityprofit.com
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