A study on FTSE Bursa Malaysia KLCI using minimum spanning tree and degree centrality during state elections

Rosli, Siti Hajar Nur A’easiah Natry and Bahaludin, Hafizah (2024) A study on FTSE Bursa Malaysia KLCI using minimum spanning tree and degree centrality during state elections. In: Final Year Project 2023/2024 Seminar, 13th December 2023, Kuantan, Pahang, Malaysia.

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Abstract

A financial network comprises nodes that are connected by links to represent the correlation between the stocks. Many researchers have been using the financial network to show the intercorrelation between stocks, especially during major events such as the global financial crisis. Even so, there are too little researchers conducted to observe the consequences of state elections that were held on 12th August 2023 towards the Malaysian Market. Therefore, this paper aims to construct a financial network of the top 30 companies listed in FTSE Bursa Malaysia KLCI. The study analyzed the data one month before and one month after the state elections where it covers from 11th July 2023 until 13th September 2023. The state elections involved six states which were Selangor, Kelantan, Terengganu, Negeri Sembilan, Kedah and Penang. A minimum spanning tree (MST) technique is used to visualize the structure of financial markets. Other than that, the degree centrality method is used to compute the number of connections of the stock where it represents the level of influence of a stock. The findings showed that there are significant differences towards the financial network structure in terms of the main clusters, and the most influential stocks. Before the state elections, there were five main clusters that were formed with one domain node and after the state elections, the clusters group decreased to four with three domain nodes. For future studies, it might be possible to include all stocks that are listed in Bursa Malaysia and adopt a longer period such as covering all state elections that have happened. The results might be more precise since it can exhibit extensive effects within broader industries and more extended periods.

Item Type:	Proceeding Paper (Poster)
Uncontrolled Keywords:	Financial network, minimum spanning tree, degree centrality, state election
Subjects:	Q Science > QA Mathematics
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Science Kulliyyah of Science > Department of Computational and Theoretical Sciences
Depositing User:	Hafizah Bahaludin
Date Deposited:	25 Apr 2024 17:00
Last Modified:	25 Apr 2024 17:25
URI:	http://irep.iium.edu.my/id/eprint/111940

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