Special Topics in Economics Econ. 491 Chapter 11: Stock Exchange Market Report

I. Stock Exchange Market Developments Report  The report analyzes the developments about Stock exchange market during a particular period of time (week, month, quarter, year).  The report consists of three sections; stock exchange developments, factors affecting stock exchange market during the given period, and expectations about the performance of the stock exchange market.

II. Stock Exchange Developments  In this section, the changes in the main stock market index are described based on numerical data.  A numerical table is used in this section to show the changes in the main index between two periods.  Sources of the main stock market index can be obtained from different places but mainly from Bloomberg, and Reuters. Bloomberg

The “Country” Stock Exchange Developments Report   The “country” stock exchange performs …..(strongly/poorly) at the end of month X compared to month Y. The “country” stock market is influenced by many economic and other developments during the month X. First; Stock Exchaneg Developments “The main index for the …….(increases / decreases) at the end of month X. Particularly, the index closed at…..……(higher / lower) rate by ….% in month X compared to the month Y closing points”. “The main index for the “country” stock exchange market …….(increases / decreases) at the end of month X. Particularly, the index closed at…..……(higher / lower) rate by ….% in month X compared to the month Y closing points”. Source: Reuters StatementClosing index in the last month (Y) Closing index in the current month (X) Change rate (%) Kuwait Stock Exchange Index %-

According to the table, What is happening to sectors related stocks in the stock exchange market? “ Reflecting the market trend, most sectors closed in red (green) during the month of X. Oil and gas slipped by 0.97 %. Basic materials rose by1.65 %, whereas industrials declined by 4.46 % list sectors here…… ” Source: Reuters SectorPerformance Oil and Gas-0.97% Basic Materials1.65% Industrials-4.46% Consumer Goods1.93% Health Care3.00% Consumer Services-0.86%

Second; Factors Affecting “country” stock exchange market “There are many reasons causing the …..(downward/upward) trend in “country” stock exchange market during the month of X, the following are the main reasons”: 1- Announced Companies’ Profits (losses) “…….Talk about the main leading companies only that might affect the index because they have high weights in the index…………….” 2- Political instability

3- Some announced economic indicators Inflation----  Inflation can have an adverse effect on stock market.  Inflation is the rate at which the price of goods and services increases, which leads to a rise in the cost of manufacturing, transporting and selling goods.  High inflation causes investors to think that companies may hold back on spending; this causes an across the board decrease in revenue. The higher cost of goods coupled with the drop in revenue causes the stock market to drop.  When inflation is at a low rate, the stock market responds with a surge in selling.

Interest Rates Interest Rates----  Interest rates as set by the central bank can have an affect on the stock market.  Higher interest rates mean that money becomes more expensive to borrow. To compensate for the higher interest costs, companies may have to cut back spending or lay off workers.  Higher interest rates also mean that company can not borrow as much as it used to, and this has an adverse affect on company earnings.  All of this adds up to a drop in the stock market.  The decrease in the interest rate makes the opposite conclusion.

Foreign Market Foreign Market----  Economic trends in foreign markets can have an effect on the stock market.  When the economies in foreign countries are down, local companies cannot sell as many goods overseas as they used to.  This causes a drop in revenue, and that can show up as a drop in the stock market.  Foreign stock exchanges also have an effect on the local stock market.  If foreign exchanges start to fail or experience sharp drops, then that kind of activity can cause local investors to anticipate a ripple effect, resulting in a drop in the local stock exchange.

“On the other hand, there are other factors that limit the (increasing / decreasing) trend for the “country” stock exchange market during the month X. These factors are as follows:“ 1- “ list them here” 2- “ list them here” 3- “ list them here”

Third; Expectations 1- Expected economic indicators “The …… expects in its monthly report released on the 12 th of month X that …………” 2- Expected Projects for listed companies “The …… expects in its monthly report released on the 12 th of month X that …………”