Effect of Macroeconomic on Stock Return

Effect of Macroeconomic on Stock Return This research paper is conducted to measure and analyze the effect of macroeconomic on stock return of industrial product sector as compared to performance of Kuala Lumpur Composite Index. Several variables will be used to identify the relationship between the dependant variable which are three pre-specified macroeconomic variables the term structure of recession, interest rate, exchange rate and stock price movement that might give impact to the independent variable which is listed stock of industrial product sectors components in Kuala Lumpur Composite Index. Holding Period Return method will be used to measure the impact dependent variables to independent variable in this research. Secondary data will be used for this research paper, which are about 50 companies in industrial product sectors components that listed in Kuala Lumpur Composite Index; will be acknowledged as the sample for the previous year period from 2005 until 2009 to measure the performance of the sector in economi c condition during the period. It is expected that during the period, the industrial sectors performance that listed in Bursa Malaysia maybe will be affected by the economic condition during the period which will give impact on their stock return. CHAPTER 1 INTRODUCTION 1.0 INTRODUCTION Macroeconomic and stock prices are difficult to predict most of the times. These changes it appears that reflect the shifting demand for that stock or changing facts that it because of expectations of a companys profitability or some of government policy that effect on stock. Therefore, investors speculate how stock are determined most of them will look for to inexpensive share or expensive share with low price earning. Shares in most large established corporations are listed on organized exchanges like the Bursa Malaysia or Shanghai Stock Exchange. Every time a stock is sold, the exchange records the price at which it changes hands. If, a few seconds or minutes later, another trade takes place, the price at which that trade is made becomes the new market price, and so on. Organized exchanges like the Bursa Malaysia will occasionally suspend trading in a stock if the price is excessively volatile and also must legalize trade according their regulation, if there is a severe difference between supply and demand or if they suspect that insiders are intentionally manipulating a stocks price. But in ordinary circumstances, nobody is on purpose to control price. The market price of a stock is basically the price at which a keen buyer and seller agree to trade. Price is volatile when the enormous volumes of stock traders are made awake of professional traders who buy and sell shares each and every one day long. Since these traders do not grab stocks over the long pull, they are not terribly interested in such long-term considerations as a companys profitability or the value of its assets. Or rather, they are interested in such factors mostly trusty as news that would affect a companys long-term prospects might cause other traders to buy the stock, causing its price to raise. If traders believe that others will buy shares, then he/she will buy as well, hoping to sell when the price rises. If others believe the same thing, then the wave of buying pressure will, in fact, cause the price to rise. This trend will continue forever. When we look back to the famous economist John Maynard Keynes which has revealed the economic principle had compared the stock market to a competition then popular in British tabloids, in which rival had to look at photos and choose the faces that other contestants would choose as the prettiest. Each contestant had to look for photos â€Å"likeliest to catch the imagination of the other competitors, all of whom be looking at the difficulty from the same point of observation. similarly, stock traders try to speculation which stocks other traders will buy. The successful trader is the one who anticipates and outfoxes the market, buying prior to a stocks price rises and selling before it falls. 1.0.1 Screening criteria of KLCI Investor can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. KLCI has over 30 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market. The Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they indicate listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market Most huge matter regarding to the criterias are, high market capitalization on stock itself, it reflects how much share have been issues and its price per share. Blue chip company is resistance to weak market and it has permanently growth for example nestle it has stable growth in term of profit and cash flow. 1.0.2 History of stock Market The Kuala Lumpur Stock Exchange which was incorporated on December 14, 1976 as a company limited by guarantee took over the operations of KLSEB in the same year. The Kuala Lumpur Stock Exchange Berhad was demutualized pursuant to the Demutualization Act and converted into a public company limited by shares on January 5, 2007. Upon the conversion, the organization vested and transferred the securities exchange business to a new wholly-owned subsidiary, Bursa Securities, and became an exchange holding company and were renamed Bursa Malaysia Berhad on April 14, 2007. On 18 March 2005, Bursa Malaysia made its first appearance on the Main Board of Bursa Malaysia Securities Berhad. On 6 July 2009, the Composite Index has been replaced by FTSE Bursa Malaysia KLCI index which reflect the top 30 companies in the exchange. On 4 August 2009, the exchange has combined the main board and the second board into a single market which is called the Main Market. Mesdaq is also renamed into ACE market which provides lower listing requirements. 1.1 BACKGROUND OF STUDY Every time a share in, say, nestle is traded for example, the new price is used to revalue all outstanding shares-just as the value of your home appreciates when the house down the block sells for more than a similar house sold last week. But the value of your home wouldnt be so high if every house on your block were suddenly put up for sale. Similarly, if all ten billion outstanding shares even a small fraction of them-were put up for sale, they wouldnt fetch anywhere near the current market price. (Pirie and Smith, 2003) have say that relationships between accounting information, book values and share prices have significant implications for share prices in Singapore. Foreign exchange rate and interest rate risks are important financial and economic factors affecting the value of common stocks. Research by (King and Wadhwani, 1990) found that the volatility transfer hypothesis suggests that random shocks can induce higher volatility in financial markets and because of contagion effects which are highest in more volatile markets, investors may look abroad to invest in alternative financial assets. This study was aimed to point out whether the stock price behaviors and macroeconomic variables such as foreign exchange rate and interest rate is reflected in listed company stock return in the KLCI or not. Because one of them is accounting factor and other are economic factor. 1.2 PROBLEM STATEMENT The problem studied in this research is about the movement of the stock market and selected individual stock prices for investors usage. Caution should also be exercised in interpreting their results as the period of study includes the 2008 financial crises. It is possible that the severity of the crisis has influenced the statistical results. These papers empirically compares and see the share price of the companies before, during and after the recession and it covers only two macroeconomic factor that have give some effect to the stock return. During this period we will see the flow of the price movement in the market by using fifthly (50) listed company in property sector. Previous studies on stock market by Deshmukh et al (1983) banks can affect their exposure to interest rate and foreign exchange rate changes when they act as financial intermediaries for their clients. As such, their role as financial intermediaries can affect the sensitivity of investor assets and liabilities to interest rate and foreign exchange rate changes 1.3 RESEARCH QUESTION This research is conducted to inquire: 1.3.1 If there any changes of stock return on listed KLCI industrial company effect of macroeconomic? 1.3.2 If there any changes of stock return on listed KLCI industrial company effect of volatile market share price? 1.3.3 Which investment could offer better stock return to investor if using Holding Period Return? 1.4 RESEARCH OBJECTIVES This research is conducted to determine: 1.4.1 Macroeconomic factor have give impact to the stock return. 1.4.2 Changes of share price have give impact to the stock return. 1.4.3 The investment that could offer better performance using Holding Period Return. 1.5 SIGNIFICANCE OF STUDY This research is an observed study upon the macroeconomic factors and changes of stock price that give impact to the stock return of industrial product listed in KLCI. The study is significance for researcher, government and investors. Researchers can be benefit from this study by the information and acknowledge they from the previous to the current and future trend of movement either macroeconomic factors and changes of stock price that give impact to the stock return. As for the government, they can assist in organizing and stabilizing the economy to make the market will always gain some profit to the investors in attract more investment to come to Malaysia. Investors will gain benefit by knowing the current condition of Malaysia stock market as well as the shares before they can invest their pool of money in Malaysia especially in the industrial company. 1.6 SCOPE OF STUDY Macroeconomic and share price is the environment in which all firms operate. The ability to forecast the macroeconomic and share price can translate into spectacular investment performance. Some of the key economic variables are inflation, interest rate and exchange rate. In economics, a recession is a business cycle contraction, a general slowdown in economic activity over a period of time. During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; while bankruptcies and the unemployment rate rise. Recessions are generally believed to be caused by a widespread drop in spending. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. High interest rates reduce the present value of future cash flow, thereby reducing the attractiveness of investment opportunities. For these reason, real interest rate are the key determinants of business investment expenditures because sensitive to interest rate affect to interest payment. The foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world. Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates. In the foreign exchange market there is little or no inside information. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time. This study takes place in the subsistence of macroeconomic and changes of stock price in Malaysia as its field is the one to be explored. Moreover 50 listed companies were acknowledged as the sample for the previous five year period. The data of this research will be obtained from DataStream. 1.7 LIMITATION OF STUDY There are several drawbacks in pursuing this research. It includes: 1.7.1 Scope of study The research reference is restricted in the scope of Malaysia due to the field of study. As we know, Malaysia is an emerging country, thus the performance is still not matured compared with the developed countries, like the United States. 1.7.2 Period of the study This study is conducted by using the data from 2005 to 2009. Approximately 50 form 100 companies that listed in Bursa Malaysia, but not all the companies data was provided in that certain period. This constraint is affecting the calculation of portfolio performance. The length of the study also affected this study indirectly. This study used to use five years period of time. The result for five years study would be different if this study managed to use the longer period of time. 1.7.3 Secondary data In this study, we used the secondary data gathered from DataStream, Bursa Malaysia and the other articles references. Some of the data were not up to date to be the good references. For example, when we referred to Bursa Malaysia, some of the data is not currently in use and in DataStream; the problem was some of the data was not available (N/A). It became a limitation to the study because we cannot get the accurate result. 1.8 DEFINITION OF TERMS 1.8.1 KLCI Kuala Lumpur Composite Index or Bursa Malaysia is place where all sector company list their stock to get capital gain from investor that buy their stock. 1.9 SUMMARY There are many reason why this research been conduct but to know the real effect to the stock return many variable been use to meet the objective. For example interest rate, exchange rate, recession and stock price movement is the variables that have effect to the company or investor stock return. CHAPTER 2 LITERATURE REVIEW 2.0 INTRODUCTION Macroeconomics is a branch of economics that deals with the performance, structure, behavior and decision-making of the entire economy, be that a national, regional, or the global economy. Along with microeconomics, macroeconomics is one of the two most general fields in economics. Researcher study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets. 2.1 GENERAL LITERATURE REVIEW 2.1.1 MACROECONOMICS The effect of macroeconomic fundamentals on stock market volatility has generated a lot of interest. Research by Liljeblom and Stenius (1997) find that it is argued that if the value of corporate equity on the whole depends on the health of the economy, then uncertainty in macroeconomic conditions would affect volatility in stock returns assuming consistent discount rates. Studies have also shown that stock market volatility is driven by uncertainty in macroeconomic fundamentals Fama (1981, 1990), Fama and French (1989) and Chen et al. (1986). It is argued that there is an inverse relationship between interest rates and stock returns. Thorbecke (1997) and Smal and de Jager (2001) observe that a reduction in interest rates induces an injection of liquidity into the economy. This extra liquidity could be channeled to the stock market, driving up the demand and prices of stocks. Patelis (1997) notes that interest rate changes are helpful in predicting stock market returns over a long period. Thus, there is evidence to conclude that interest rate policies should also target stock market price movements. Goodfriend (2003) also notes that, since there is no stable correlation between stock-price returns and short-term interest rates, it would be difficult for interest rates to target stock-price changes appropriately. Bernanke and Kuttner (2003) also note that stock markets do not react much to interest rate changes. Throughout the years, the global economy has been transformed from a simplified financial architecture to a complex intertwined set of financial systems. From the Bretton Woods system to the advent of flexible exchange rate systems in 1973 until the present days, the environment of international markets had experienced substantial changes in the form of excessive variability in exchange rates, greater capital mobility and punctuated by a series of financial crises worldwide in recent years. Meese (1990) who studied the currency fluctuations in the post-Bretton Woods era found that the changes of macroeconomic variables alone could not explain major currencies movements. MacDonald and Taylor (1994) however noticed relationships between macroeconomic variables and exchange rate. A recent study by Rapach and Wohar (2002) meanwhile produced mixed results for the monetary model of exchange rate determination. In December, 2007 economic recession that began in the United States spread much of the industrialized world, and has caused a uncertainty of economic activity. This global recession has been taking place in an economic environment characterized by various imbalances and was sparked by the outbreak of the financial crisis of 2007–2009. However, Mitchell and Netter (1989) argue that the three-day decline preceding the crash was a large enough decline that it became the fundamental news and that shook the market. The theoretical model of Jacklin et al. (1992) (among others) shows how a surprise significant drop in the market could have provided information to the market that would directly lead to a crash. Among all macroeconomic factor stock price movement is also effect by changes in economic environments. CRR (1986) results are tested to see whether the factors priced in the US market are applicable in Turkey stock market, with adding new variable unemployment rate, because we expected a relation with the stock returns. 2.2 THEORETICAL FRAMEWORK Four factors are selected to test the relationships of these factors and stock return. The factors are recession, interest rate, exchange rate and stock price movement. 2.2.1 Recession Recession is one of the macroeconomic factors that effect to the listed company stock return in KLCI. Some of the researcher say that recession have give negative impact to stock return but some researcher found that recession is no relation with stock price. CRR (1986) shown that the tested macroeconomic variables do not affect the share price in the UK stock market. 2.2.2 Exchange Rate. Exchange rate is most been use by investor to do transaction to buy stock in market, because of that exchange rate is consider one of the factors that effect to the stock return. Movements of exchange rate are always a concern for various parties. In international currency markets, exchange rate plays a significant role and the variability of exchange rate, whichever way it sways, tends to give a significant impact on the economy. 2.2.3 Interest Rate. Interest rate also one of the factor that give impact to the stock return because some researcher say that interest rate give negative impact to the stock return. Anthony Kyereboah-Coleman and Kwame F. Agyire-Tettey (2008) mention that there negative real interest rates for extended period. 2.2.4 Stock Price Movement. Stock price move is most related to the stock return because every time changes in stock price effect to the outcome of stock return for investor investment but some of the researcher say that there is no effect on stock return. For example Martinez and Rubio (1989) tested the Spanish market return and they found that there were no significant pricing relationship between stock returns and the macroeconomic variables. 2.3 SUMMARY Literature review is the part where it shows where it show whether the variable will be strongly acceptance or not. From the previous study that has been done it has shown that, most of the variable has its own importance not only in affecting some issue but also in solving it. This literature reviews shows the effect of this study on the stock return as the dependent. It also has many researches done with the difference result. CHAPTER 3 METHODOLOGY AND DATA 3.0 INTRODUCTION This chapter discusses the research methodology used in the study. Methodology is one the important method that had been use to test the hypothesis on this study in order to get the finding at the end of the study. Research design and research methodology is most of the important part for this study since it provide a lot of useful information on how to get the data, how to conduct the survey and provide additional information in order to get better result and finding for this study. This chapter explains how the data for conduct the study is collected and carried out. It also explain on the method that is going to be use to get the finding at the end of the study. It also focus on the data sources, sample involved in the study and the methodology to be use in this study. In this study the variables that had been used was economic recession, exchange rate, interest rate and stock price which collected on the monthly basis for the period of 5 years ended in December 2005 until December 2009. This study consists of 50-industrial product firm and using time series period from 2005 to 2009. Focus for this study was more on the Regression Model analysis to test the finding. Since this study was investigate and identify the relationship between macroeconomic and stock price movement to profitability so using the regression data analysis model had done it for the past 5 years.. There are several key items such as data collection method, sampling frame, sources of data, variables and measurement, research design, theoretical framework, hypothesis statement, data analysis, and treatment which will clarify in detail in this chapter. 3.1 DATA COLLECTION The price indices at monthly frequency are collected for sectors in Bursa Malaysia: industrial product sector. All the closing prices of these sector indices sourced from the secondary data from Thomson Financial DataStream over five-year period from year 2005 to year 2009 (5 years). Meanwhile, for the independent variables of recession rate, exchange rate, interest rate and stock price will be extracted from Thomson Financial DataStream and Bank Negara Malaysia official release. 3.2 SAMPLING FRAME To secure an acceptable result, this study decided to use 50 samples out of all companies that went public and were listed on the second board within year 2005 to 2009. The decision to use this sample was due to the inability to collect more data due to the time constrain during research. Furthermore, this study wants to see the stock return for investor in industrial product sector. And at the same time, it also wants to observe the relationship between recession rate, exchange rate, interest rate and stock price. 3.3 SOURCES OF DATA The selected 50 stock sample being chose from the main board of BM KLCI .The data are collected on monthly actual stock price was collected from the Thomson Financial DataStream, which is provided the information about the companies financial situations over years. Each stock is already being issued from the companies issued until today. These samples were represented by 50 companies from the industrial product sector. 3.4 VARIABLES AND MEASUREMENT There are two types variables has been used in this study there are; the dependent and the independent variables. 3.4.1 Dependent Variables The dependent variable for this study is stock return of each company industrial product sector. 3.4.2 Independent Variables The independent variables will be measured by recession rate, exchange rate, interest rate and stock price. 3.5 RESEARCH DESIGN This research is designed to see the relationship between dependent variable with independent variables. In this study, it analysis in hypotheses testing that will explain the certain significant correlations between KLIBOR and Treasury Bills rates and the stock performance 3.5.1 Purpose of the Study The purpose of this study is to determine the relationship between all the dependent and independent variable. By using descriptive study can know relationship between both of variable. Descriptive study will be able to describe the characteristics of the variable of the situation. By using data from DataStream would be able to compare monthly return for each of the companies. Besides that, this study also can help investor to make decision making and offer the idea for future problem and research. 3.5.2 Types of Investigation The study involved the correlation study types of investigation. The study involves determining the important variable associated with the situation. The important variable is between the recession rate, exchange rate, interest rate and stock price. Correlation studies done in the study are called field studies. This studies will conducted to establish cause and effect to the stock return using the same measurement in the market are called field experiments. The experiment done to establish the cause and affect of the studies so that can make corrective action to make any decision in the investment. 3.5.3 Unit of Analysis In this study, the unit of analysis is group of company and also industry. The group of company that involve fifthly (50) of the properties companies that has been selected in the main board of BM KLCI. The companies selected depend on the year of the companies is establish. The industry that has been selected is recession rate, exchange rate, interest rate and stock price will be compare with the return of each companies return during 5 years. 3.5.4 Time Horizon This study will be use cross-sectional studies to make the research. A study will be done with the monthly data are gathered over five years (5) from year 2005 to 2009, in order to get the result about these studies. 3.6 THEORETICAL FRAMEWORK Research studies indicate that relationship between KLIBOR and Treasury Bills rates and stock performance. Dependent variable: Effect of company Stock Return Independent variables: Recession rate, Exchange rate, Interest rate and Stock Price Movement. Figure 1: Schematic Diagram (Relationship Diagram) Independent Dependent Company Stock return listed in KLCI Stock price movement Interest rate Exchange rate Recession rate According to the schematic diagram above, it can be explaining relationship between stock return with Recession rate, Exchange rate, Interest rate and Stock Price Movement. 3.7 DATA ANALYSIS AND TREATMENT Multiple Linear Regression Model are the statistical tools that been use in this study. This model analysis examine about simultaneous effect between Recession rate, Exchange rate, Interest rate and Stock Price Movement (independent variable) Stock Return (dependent variable) which variable give biggest effect on the dependent variable. Where; Y = Dependent variable which represent Actual Stock Performance = The constant number of equation = Coefficient Beta value = Independent variable which represent Recession rate = Independent variable which represent Exchange rate = Independent variable which represent Interest rate = Error r = (EV – BV) + DIV X 100 BVStock price movement will be measure in Holding Period Return to determine the effect on stock return Where; r = Represent Rate of return EV = Represent Ending Value or end of stock price BV = Represent Beginning Value or beginning of stock price DIV = Represent income or dividend of company 3.8 HYPOTHESIS STATEMENT Some changes will affect the each stock return to the companies. By changing the stock price will affect the return to the companies its self its might be go higher or lower than what it expected will be. To analysis and to test whether this is applicable to the Malaysian Stock Market, the hypothesis has been developing. Hypothesis 1 H0 = Company stock return in industrial product sector outperform than KLCI H1 = Company stock return in industrial product sector underperform than KLCI Hypothesis 2 H0 = Macroeconomic factor does has significant impact in stock return of each company in industrial product sector in KLCI H1 = Macroeconomic factor does not has significant impact in stock return of each industrial product sector in KLCI Hypothesis 3 H0 = Stock price movement does has significant impact in stock return of each industrial product sector in KLCI H1 = Stock price movement does not has significant impact in stock return of each industrial product sector in KLCI SUMMARY This study will be measure according the objective that has been established in earlier chapter. This research can be use to help investors to make the investment decision. Its because this studies focuses on the data from year 2005 until year2009, it will give better overview of each of the properties company in order to take any corrective action in facing the problem and also overcoming the problem in the current situation to make an investment decision. Effect of Macroeconomic on Stock Return Effect of Macroeconomic on Stock Return This research paper is conducted to measure and analyze the effect of macroeconomic on stock return of industrial product sector as compared to performance of Kuala Lumpur Composite Index. Several variables will be used to identify the relationship between the dependant variable which are three pre-specified macroeconomic variables the term structure of recession, interest rate, exchange rate and stock price movement that might give impact to the independent variable which is listed stock of industrial product sectors components in Kuala Lumpur Composite Index. Holding Period Return method will be used to measure the impact dependent variables to independent variable in this research. Secondary data will be used for this research paper, which are about 50 companies in industrial product sectors components that listed in Kuala Lumpur Composite Index; will be acknowledged as the sample for the previous year period from 2005 until 2009 to measure the performance of the sector in economi c condition during the period. It is expected that during the period, the industrial sectors performance that listed in Bursa Malaysia maybe will be affected by the economic condition during the period which will give impact on their stock return. CHAPTER 1 INTRODUCTION 1.0 INTRODUCTION Macroeconomic and stock prices are difficult to predict most of the times. These changes it appears that reflect the shifting demand for that stock or changing facts that it because of expectations of a companys profitability or some of government policy that effect on stock. Therefore, investors speculate how stock are determined most of them will look for to inexpensive share or expensive share with low price earning. Shares in most large established corporations are listed on organized exchanges like the Bursa Malaysia or Shanghai Stock Exchange. Every time a stock is sold, the exchange records the price at which it changes hands. If, a few seconds or minutes later, another trade takes place, the price at which that trade is made becomes the new market price, and so on. Organized exchanges like the Bursa Malaysia will occasionally suspend trading in a stock if the price is excessively volatile and also must legalize trade according their regulation, if there is a severe difference between supply and demand or if they suspect that insiders are intentionally manipulating a stocks price. But in ordinary circumstances, nobody is on purpose to control price. The market price of a stock is basically the price at which a keen buyer and seller agree to trade. Price is volatile when the enormous volumes of stock traders are made awake of professional traders who buy and sell shares each and every one day long. Since these traders do not grab stocks over the long pull, they are not terribly interested in such long-term considerations as a companys profitability or the value of its assets. Or rather, they are interested in such factors mostly trusty as news that would affect a companys long-term prospects might cause other traders to buy the stock, causing its price to raise. If traders believe that others will buy shares, then he/she will buy as well, hoping to sell when the price rises. If others believe the same thing, then the wave of buying pressure will, in fact, cause the price to rise. This trend will continue forever. When we look back to the famous economist John Maynard Keynes which has revealed the economic principle had compared the stock market to a competition then popular in British tabloids, in which rival had to look at photos and choose the faces that other contestants would choose as the prettiest. Each contestant had to look for photos â€Å"likeliest to catch the imagination of the other competitors, all of whom be looking at the difficulty from the same point of observation. similarly, stock traders try to speculation which stocks other traders will buy. The successful trader is the one who anticipates and outfoxes the market, buying prior to a stocks price rises and selling before it falls. 1.0.1 Screening criteria of KLCI Investor can only invest in stocks through a stock exchange, an organized marketplace where stocks are bought and sold under strict rules, regulations and guidelines. KLCI has over 30 listed companies offering a wide range of investment choices to local and global investors. Companies are either listed on Bursa Malaysia Securities Main Market or ACE Market. The Stock Market was created by companies wishing to raise capital for their business. When someone says they have a listed company they indicate listed on Bursa Malaysia. All companies need cash to take advantage of growth opportunities. Many start-up companies however find themselves short of capital to fund expansion. One way to acquire this cash is to publicly float the company. This involves selling part of the company to private individual and institutional investors who are then able to freely exchange these stocks on an open market Most huge matter regarding to the criterias are, high market capitalization on stock itself, it reflects how much share have been issues and its price per share. Blue chip company is resistance to weak market and it has permanently growth for example nestle it has stable growth in term of profit and cash flow. 1.0.2 History of stock Market The Kuala Lumpur Stock Exchange which was incorporated on December 14, 1976 as a company limited by guarantee took over the operations of KLSEB in the same year. The Kuala Lumpur Stock Exchange Berhad was demutualized pursuant to the Demutualization Act and converted into a public company limited by shares on January 5, 2007. Upon the conversion, the organization vested and transferred the securities exchange business to a new wholly-owned subsidiary, Bursa Securities, and became an exchange holding company and were renamed Bursa Malaysia Berhad on April 14, 2007. On 18 March 2005, Bursa Malaysia made its first appearance on the Main Board of Bursa Malaysia Securities Berhad. On 6 July 2009, the Composite Index has been replaced by FTSE Bursa Malaysia KLCI index which reflect the top 30 companies in the exchange. On 4 August 2009, the exchange has combined the main board and the second board into a single market which is called the Main Market. Mesdaq is also renamed into ACE market which provides lower listing requirements. 1.1 BACKGROUND OF STUDY Every time a share in, say, nestle is traded for example, the new price is used to revalue all outstanding shares-just as the value of your home appreciates when the house down the block sells for more than a similar house sold last week. But the value of your home wouldnt be so high if every house on your block were suddenly put up for sale. Similarly, if all ten billion outstanding shares even a small fraction of them-were put up for sale, they wouldnt fetch anywhere near the current market price. (Pirie and Smith, 2003) have say that relationships between accounting information, book values and share prices have significant implications for share prices in Singapore. Foreign exchange rate and interest rate risks are important financial and economic factors affecting the value of common stocks. Research by (King and Wadhwani, 1990) found that the volatility transfer hypothesis suggests that random shocks can induce higher volatility in financial markets and because of contagion effects which are highest in more volatile markets, investors may look abroad to invest in alternative financial assets. This study was aimed to point out whether the stock price behaviors and macroeconomic variables such as foreign exchange rate and interest rate is reflected in listed company stock return in the KLCI or not. Because one of them is accounting factor and other are economic factor. 1.2 PROBLEM STATEMENT The problem studied in this research is about the movement of the stock market and selected individual stock prices for investors usage. Caution should also be exercised in interpreting their results as the period of study includes the 2008 financial crises. It is possible that the severity of the crisis has influenced the statistical results. These papers empirically compares and see the share price of the companies before, during and after the recession and it covers only two macroeconomic factor that have give some effect to the stock return. During this period we will see the flow of the price movement in the market by using fifthly (50) listed company in property sector. Previous studies on stock market by Deshmukh et al (1983) banks can affect their exposure to interest rate and foreign exchange rate changes when they act as financial intermediaries for their clients. As such, their role as financial intermediaries can affect the sensitivity of investor assets and liabilities to interest rate and foreign exchange rate changes 1.3 RESEARCH QUESTION This research is conducted to inquire: 1.3.1 If there any changes of stock return on listed KLCI industrial company effect of macroeconomic? 1.3.2 If there any changes of stock return on listed KLCI industrial company effect of volatile market share price? 1.3.3 Which investment could offer better stock return to investor if using Holding Period Return? 1.4 RESEARCH OBJECTIVES This research is conducted to determine: 1.4.1 Macroeconomic factor have give impact to the stock return. 1.4.2 Changes of share price have give impact to the stock return. 1.4.3 The investment that could offer better performance using Holding Period Return. 1.5 SIGNIFICANCE OF STUDY This research is an observed study upon the macroeconomic factors and changes of stock price that give impact to the stock return of industrial product listed in KLCI. The study is significance for researcher, government and investors. Researchers can be benefit from this study by the information and acknowledge they from the previous to the current and future trend of movement either macroeconomic factors and changes of stock price that give impact to the stock return. As for the government, they can assist in organizing and stabilizing the economy to make the market will always gain some profit to the investors in attract more investment to come to Malaysia. Investors will gain benefit by knowing the current condition of Malaysia stock market as well as the shares before they can invest their pool of money in Malaysia especially in the industrial company. 1.6 SCOPE OF STUDY Macroeconomic and share price is the environment in which all firms operate. The ability to forecast the macroeconomic and share price can translate into spectacular investment performance. Some of the key economic variables are inflation, interest rate and exchange rate. In economics, a recession is a business cycle contraction, a general slowdown in economic activity over a period of time. During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; while bankruptcies and the unemployment rate rise. Recessions are generally believed to be caused by a widespread drop in spending. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. High interest rates reduce the present value of future cash flow, thereby reducing the attractiveness of investment opportunities. For these reason, real interest rate are the key determinants of business investment expenditures because sensitive to interest rate affect to interest payment. The foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world. Some of the participants in this market are simply seeking to exchange a foreign currency for their own, like multinational corporations which must pay wages and other expenses in different nations than they sell products in. However, a large part of the market is made up of currency traders, who speculate on movements in exchange rates, much like others would speculate on movements of stock prices. Currency traders try to take advantage of even small fluctuations in exchange rates. In the foreign exchange market there is little or no inside information. Exchange rate fluctuations are usually caused by actual monetary flows as well as anticipations on global macroeconomic conditions. Significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time. This study takes place in the subsistence of macroeconomic and changes of stock price in Malaysia as its field is the one to be explored. Moreover 50 listed companies were acknowledged as the sample for the previous five year period. The data of this research will be obtained from DataStream. 1.7 LIMITATION OF STUDY There are several drawbacks in pursuing this research. It includes: 1.7.1 Scope of study The research reference is restricted in the scope of Malaysia due to the field of study. As we know, Malaysia is an emerging country, thus the performance is still not matured compared with the developed countries, like the United States. 1.7.2 Period of the study This study is conducted by using the data from 2005 to 2009. Approximately 50 form 100 companies that listed in Bursa Malaysia, but not all the companies data was provided in that certain period. This constraint is affecting the calculation of portfolio performance. The length of the study also affected this study indirectly. This study used to use five years period of time. The result for five years study would be different if this study managed to use the longer period of time. 1.7.3 Secondary data In this study, we used the secondary data gathered from DataStream, Bursa Malaysia and the other articles references. Some of the data were not up to date to be the good references. For example, when we referred to Bursa Malaysia, some of the data is not currently in use and in DataStream; the problem was some of the data was not available (N/A). It became a limitation to the study because we cannot get the accurate result. 1.8 DEFINITION OF TERMS 1.8.1 KLCI Kuala Lumpur Composite Index or Bursa Malaysia is place where all sector company list their stock to get capital gain from investor that buy their stock. 1.9 SUMMARY There are many reason why this research been conduct but to know the real effect to the stock return many variable been use to meet the objective. For example interest rate, exchange rate, recession and stock price movement is the variables that have effect to the company or investor stock return. CHAPTER 2 LITERATURE REVIEW 2.0 INTRODUCTION Macroeconomics is a branch of economics that deals with the performance, structure, behavior and decision-making of the entire economy, be that a national, regional, or the global economy. Along with microeconomics, macroeconomics is one of the two most general fields in economics. Researcher study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific markets. 2.1 GENERAL LITERATURE REVIEW 2.1.1 MACROECONOMICS The effect of macroeconomic fundamentals on stock market volatility has generated a lot of interest. Research by Liljeblom and Stenius (1997) find that it is argued that if the value of corporate equity on the whole depends on the health of the economy, then uncertainty in macroeconomic conditions would affect volatility in stock returns assuming consistent discount rates. Studies have also shown that stock market volatility is driven by uncertainty in macroeconomic fundamentals Fama (1981, 1990), Fama and French (1989) and Chen et al. (1986). It is argued that there is an inverse relationship between interest rates and stock returns. Thorbecke (1997) and Smal and de Jager (2001) observe that a reduction in interest rates induces an injection of liquidity into the economy. This extra liquidity could be channeled to the stock market, driving up the demand and prices of stocks. Patelis (1997) notes that interest rate changes are helpful in predicting stock market returns over a long period. Thus, there is evidence to conclude that interest rate policies should also target stock market price movements. Goodfriend (2003) also notes that, since there is no stable correlation between stock-price returns and short-term interest rates, it would be difficult for interest rates to target stock-price changes appropriately. Bernanke and Kuttner (2003) also note that stock markets do not react much to interest rate changes. Throughout the years, the global economy has been transformed from a simplified financial architecture to a complex intertwined set of financial systems. From the Bretton Woods system to the advent of flexible exchange rate systems in 1973 until the present days, the environment of international markets had experienced substantial changes in the form of excessive variability in exchange rates, greater capital mobility and punctuated by a series of financial crises worldwide in recent years. Meese (1990) who studied the currency fluctuations in the post-Bretton Woods era found that the changes of macroeconomic variables alone could not explain major currencies movements. MacDonald and Taylor (1994) however noticed relationships between macroeconomic variables and exchange rate. A recent study by Rapach and Wohar (2002) meanwhile produced mixed results for the monetary model of exchange rate determination. In December, 2007 economic recession that began in the United States spread much of the industrialized world, and has caused a uncertainty of economic activity. This global recession has been taking place in an economic environment characterized by various imbalances and was sparked by the outbreak of the financial crisis of 2007–2009. However, Mitchell and Netter (1989) argue that the three-day decline preceding the crash was a large enough decline that it became the fundamental news and that shook the market. The theoretical model of Jacklin et al. (1992) (among others) shows how a surprise significant drop in the market could have provided information to the market that would directly lead to a crash. Among all macroeconomic factor stock price movement is also effect by changes in economic environments. CRR (1986) results are tested to see whether the factors priced in the US market are applicable in Turkey stock market, with adding new variable unemployment rate, because we expected a relation with the stock returns. 2.2 THEORETICAL FRAMEWORK Four factors are selected to test the relationships of these factors and stock return. The factors are recession, interest rate, exchange rate and stock price movement. 2.2.1 Recession Recession is one of the macroeconomic factors that effect to the listed company stock return in KLCI. Some of the researcher say that recession have give negative impact to stock return but some researcher found that recession is no relation with stock price. CRR (1986) shown that the tested macroeconomic variables do not affect the share price in the UK stock market. 2.2.2 Exchange Rate. Exchange rate is most been use by investor to do transaction to buy stock in market, because of that exchange rate is consider one of the factors that effect to the stock return. Movements of exchange rate are always a concern for various parties. In international currency markets, exchange rate plays a significant role and the variability of exchange rate, whichever way it sways, tends to give a significant impact on the economy. 2.2.3 Interest Rate. Interest rate also one of the factor that give impact to the stock return because some researcher say that interest rate give negative impact to the stock return. Anthony Kyereboah-Coleman and Kwame F. Agyire-Tettey (2008) mention that there negative real interest rates for extended period. 2.2.4 Stock Price Movement. Stock price move is most related to the stock return because every time changes in stock price effect to the outcome of stock return for investor investment but some of the researcher say that there is no effect on stock return. For example Martinez and Rubio (1989) tested the Spanish market return and they found that there were no significant pricing relationship between stock returns and the macroeconomic variables. 2.3 SUMMARY Literature review is the part where it shows where it show whether the variable will be strongly acceptance or not. From the previous study that has been done it has shown that, most of the variable has its own importance not only in affecting some issue but also in solving it. This literature reviews shows the effect of this study on the stock return as the dependent. It also has many researches done with the difference result. CHAPTER 3 METHODOLOGY AND DATA 3.0 INTRODUCTION This chapter discusses the research methodology used in the study. Methodology is one the important method that had been use to test the hypothesis on this study in order to get the finding at the end of the study. Research design and research methodology is most of the important part for this study since it provide a lot of useful information on how to get the data, how to conduct the survey and provide additional information in order to get better result and finding for this study. This chapter explains how the data for conduct the study is collected and carried out. It also explain on the method that is going to be use to get the finding at the end of the study. It also focus on the data sources, sample involved in the study and the methodology to be use in this study. In this study the variables that had been used was economic recession, exchange rate, interest rate and stock price which collected on the monthly basis for the period of 5 years ended in December 2005 until December 2009. This study consists of 50-industrial product firm and using time series period from 2005 to 2009. Focus for this study was more on the Regression Model analysis to test the finding. Since this study was investigate and identify the relationship between macroeconomic and stock price movement to profitability so using the regression data analysis model had done it for the past 5 years.. There are several key items such as data collection method, sampling frame, sources of data, variables and measurement, research design, theoretical framework, hypothesis statement, data analysis, and treatment which will clarify in detail in this chapter. 3.1 DATA COLLECTION The price indices at monthly frequency are collected for sectors in Bursa Malaysia: industrial product sector. All the closing prices of these sector indices sourced from the secondary data from Thomson Financial DataStream over five-year period from year 2005 to year 2009 (5 years). Meanwhile, for the independent variables of recession rate, exchange rate, interest rate and stock price will be extracted from Thomson Financial DataStream and Bank Negara Malaysia official release. 3.2 SAMPLING FRAME To secure an acceptable result, this study decided to use 50 samples out of all companies that went public and were listed on the second board within year 2005 to 2009. The decision to use this sample was due to the inability to collect more data due to the time constrain during research. Furthermore, this study wants to see the stock return for investor in industrial product sector. And at the same time, it also wants to observe the relationship between recession rate, exchange rate, interest rate and stock price. 3.3 SOURCES OF DATA The selected 50 stock sample being chose from the main board of BM KLCI .The data are collected on monthly actual stock price was collected from the Thomson Financial DataStream, which is provided the information about the companies financial situations over years. Each stock is already being issued from the companies issued until today. These samples were represented by 50 companies from the industrial product sector. 3.4 VARIABLES AND MEASUREMENT There are two types variables has been used in this study there are; the dependent and the independent variables. 3.4.1 Dependent Variables The dependent variable for this study is stock return of each company industrial product sector. 3.4.2 Independent Variables The independent variables will be measured by recession rate, exchange rate, interest rate and stock price. 3.5 RESEARCH DESIGN This research is designed to see the relationship between dependent variable with independent variables. In this study, it analysis in hypotheses testing that will explain the certain significant correlations between KLIBOR and Treasury Bills rates and the stock performance 3.5.1 Purpose of the Study The purpose of this study is to determine the relationship between all the dependent and independent variable. By using descriptive study can know relationship between both of variable. Descriptive study will be able to describe the characteristics of the variable of the situation. By using data from DataStream would be able to compare monthly return for each of the companies. Besides that, this study also can help investor to make decision making and offer the idea for future problem and research. 3.5.2 Types of Investigation The study involved the correlation study types of investigation. The study involves determining the important variable associated with the situation. The important variable is between the recession rate, exchange rate, interest rate and stock price. Correlation studies done in the study are called field studies. This studies will conducted to establish cause and effect to the stock return using the same measurement in the market are called field experiments. The experiment done to establish the cause and affect of the studies so that can make corrective action to make any decision in the investment. 3.5.3 Unit of Analysis In this study, the unit of analysis is group of company and also industry. The group of company that involve fifthly (50) of the properties companies that has been selected in the main board of BM KLCI. The companies selected depend on the year of the companies is establish. The industry that has been selected is recession rate, exchange rate, interest rate and stock price will be compare with the return of each companies return during 5 years. 3.5.4 Time Horizon This study will be use cross-sectional studies to make the research. A study will be done with the monthly data are gathered over five years (5) from year 2005 to 2009, in order to get the result about these studies. 3.6 THEORETICAL FRAMEWORK Research studies indicate that relationship between KLIBOR and Treasury Bills rates and stock performance. Dependent variable: Effect of company Stock Return Independent variables: Recession rate, Exchange rate, Interest rate and Stock Price Movement. Figure 1: Schematic Diagram (Relationship Diagram) Independent Dependent Company Stock return listed in KLCI Stock price movement Interest rate Exchange rate Recession rate According to the schematic diagram above, it can be explaining relationship between stock return with Recession rate, Exchange rate, Interest rate and Stock Price Movement. 3.7 DATA ANALYSIS AND TREATMENT Multiple Linear Regression Model are the statistical tools that been use in this study. This model analysis examine about simultaneous effect between Recession rate, Exchange rate, Interest rate and Stock Price Movement (independent variable) Stock Return (dependent variable) which variable give biggest effect on the dependent variable. Where; Y = Dependent variable which represent Actual Stock Performance = The constant number of equation = Coefficient Beta value = Independent variable which represent Recession rate = Independent variable which represent Exchange rate = Independent variable which represent Interest rate = Error r = (EV – BV) + DIV X 100 BVStock price movement will be measure in Holding Period Return to determine the effect on stock return Where; r = Represent Rate of return EV = Represent Ending Value or end of stock price BV = Represent Beginning Value or beginning of stock price DIV = Represent income or dividend of company 3.8 HYPOTHESIS STATEMENT Some changes will affect the each stock return to the companies. By changing the stock price will affect the return to the companies its self its might be go higher or lower than what it expected will be. To analysis and to test whether this is applicable to the Malaysian Stock Market, the hypothesis has been developing. Hypothesis 1 H0 = Company stock return in industrial product sector outperform than KLCI H1 = Company stock return in industrial product sector underperform than KLCI Hypothesis 2 H0 = Macroeconomic factor does has significant impact in stock return of each company in industrial product sector in KLCI H1 = Macroeconomic factor does not has significant impact in stock return of each industrial product sector in KLCI Hypothesis 3 H0 = Stock price movement does has significant impact in stock return of each industrial product sector in KLCI H1 = Stock price movement does not has significant impact in stock return of each industrial product sector in KLCI SUMMARY This study will be measure according the objective that has been established in earlier chapter. This research can be use to help investors to make the investment decision. Its because this studies focuses on the data from year 2005 until year2009, it will give better overview of each of the properties company in order to take any corrective action in facing the problem and also overcoming the problem in the current situation to make an investment decision.

Effects of Trailers in Film Campaigns

Effects of Trailers in Film Campaigns As the main function of a film trailer is to market the film and promote to a range of audiences film trailers are also a form of persuasive art and promotional narrative, they are designed to make you want to go and see the film being shown at the cinema. As film trailers do give you the free sample of the film being advertised they also function as a tool to allow us to be aware of what films have been released on cinema and as Lisa Kernan states, ‘Trailers are a cinema of (coming) attractions.’ And this essentially means film trailers are individual events allowing us to also see upcoming events in the future. Film trailers permit the viewers to generate opinions of their own so they can decide which films to go and watch. Trailers are my chosen topic for this dissertation, it will focus on the principle features of the film trailers, where I will analyse case studies to highlight the use of classic American film techniques and in return the analysis will answer the questions, what is a film trailer? How does a film trailer create meaning? Film trailers brought to my attention the ability they have to reconfigure a feature length film narrative into a short cinematic film. It is this factor which brings me to analyse film trailers closely. I will be closely paying attention to a chosen element of the extensive range the marketing campaign. In particular I have chosen to look into film trailers. From Marketing I will move on to film trailers, where I am going to call attention to the design of film trailer, which will consist of analysing and identifying the principle features. These are its bare essentials, the Narrative, the Genre, the Sound; they are combined to create a film trailer. Each of these elements will be analysed along with several case studies to provide examples for the use of these elements. I will be looking for the use of editing techniques to determine how they create meaning and desired effects, such techniques include transitions, types of shot and bridging devices along with the use of captions. Other such techniques that will be brought up are the emphasis on the unique selling point of a film and using the star system to sell the film. These techniques in return will show how the narrative, the genre are some of the principle features constituting to the overall design of a film trailer. Further more into the analysis I will look at sound techniques such as voice over narration, the sound track and sound effects created for the film trailers. These techniques will determine the meaning Sound brings to the film trailer. Overall by looking at these techniques in different film trailers I will show how these principle features create effects and show how they function and what meanings they generate. Once I have established the meanings of the design of a film I will look at the functions of a trailer in its intended market. I will talk about the functions of the marketing campaign as a total strategy. I will broadly look into the marketing campaign to explain its importance in the film industry. Within in marketing I will be looking at the functions and effects of Distribution, promotion and advertising as the broader context in which film trailers fit into. I will consider factors such as market research into social cultures and why it is necessary, in addition with internet advertising and distribution as a tool for the mass audience. Moving on from the marketing of film trailers to the actual creation and techniques used in trailers known as the design. First I am going to look at the film trailer in general and state briefly what elements are used to construct the film trailer this will give us the groundwork’s and background information for film trailers so I can start to distinguish the finer elements in detail. In general film trailers tend to show us the most interesting images from a film; the scenes that will appeal to the viewers or make them laugh or create a sense of fear, any thing to excite the audience. To define a trailer to its bare essentials, I ask the question what makes a film trailer distinct and special. I believe that when certain key features are put together they create a powerful persuasive form of mini film. It is the use of techniques in which the trailers are created in there style that makes them distinct, as later I will prove in my analysis that each trailers approaches the design and style in showing the film in a unique and individual way while still employing classic Hollywood film techniques. The use of different shots and combining these shots to emphasize the films best features as well as the use of transitions and graphics are some classic Hollywood techniques used in promoting a film trailer. My research in film trailers has lead me to believe that the use of montage sequences and shot selection are the elements that bring together the narrative, genre and sound to create the film trailers. ‘It is the capacity of film trailers to convey information non-verbally through mise-en-scene, editing, camera movements and facial expressions that provides the power to promote in such a big way’ Narrative The first principle feature of film trailers is the narrative. The film trailer creates a separate narrative to present the narrative of the feature length film. Narration is the telling of a story, and the plot of a film trailer implies story information. It is the narrational component of trailers which is significant to their production of meaning. Some trailers focus more on this feature as the film most likely covers important issues or contain a meaning of some importance these types of narratives are known as non-fictional. Fictional films tend to focus on explaining the background information to establish the story, I am going to look at a specific genre of film trailers, I have chosen action films spanning over the 1970’s 80’s and 90’s. The Terminator film is a perfect example of a trailer that employs a specific technique of plot development. The narrative function is to introduce the character, in this case study it is ‘The Terminator’ where the story implies a search and destroy plot. The voice over states what the plot is going to be about by saying a few facts, the last few words that are said explain the type of plot development you can expect in the film, It will have only one purpose, to return to the present and prevent the future. This weapon will be called The Terminator. With out this information the audience would be confused and the trailer would become arbitrary; it is the narrative that gives the film context first along with the images which reveal more of the plot. The use of narrative to explain the films meaning and purpose is essential, the function of narrative in this trailer shows the technique of a goal orientated plot. †¦there are goal orientated plots, in which a character takes steps to achieve a desired object or state of affairs Plot development is a technique employed in many other action film trailers as I have noticed. The Die Hard film trailer reveals a plot where the central character John McLain is trying to save his wife who has been taken hostage among many others in a building. This plot reveals patterns of repeated action. Trailers use plot patterns to allow the audience to expect a certain type of plot, the audience create their own more specific intentions, as the trailer goes on revealing the audiences expectations become more precise. Aliens is a perfect example of a search and destroy plot pattern that is identified in the first scene of the movie where the female heroine known as Sigourney weaver asks a question and gets a simple reply. This small amount of dialogue explains the development of plot you can expect to see in the film itself. Just tell me one thing Berk, we’re going out to destroy them†¦rite, not to study, not to bring back, but to wipe them out? †¦That’s the plan! Although this dialogue alone is unjustified until you see the action that follows it. This statement implies that there is something out there and not of a friendly nature, Sigourney’s intentions are to go out there and destroy something. It is clear that narrative in trailers plays an integral role in the creation of meaning in delivering the narrative plot of the feature length film correctly, without revealing too much but making it interesting enough. The two trailers mentioned above use voice over to narrate the story information where as my next example employs the use of inter titles. The inter titles are words on a blank screen or superimposed over images, which contribute to the meaning of the plot or story information. In addition they are used as a transition between time and space, the connotative meanings of the words are interpreted by social cultures who relate the words to the nature of the society in which they live in. The trailer lets the images reveal more about the style and dialogue of the film, while the inter titles connote different meanings and informs the audiences of what to expect in the film. This is a different technique to inform the audience of the type of plot development they can expect. In addition to the narrative development of plots, the middle portion of the trailer displays the events that define action and adventure are the causes of the delays of expected outcomes. These events may cause suspense, fear, excitement and surprise. For example in the Die hard film trailer the number of obstacles John McLain has to fight through to save his wife are just the delayed expectations, creating suspense and progressing through to the final climaxes of the film. Although this true film trailers differ slightly in the fact that scenes are shown leading up to the climax but you have to remember it is only a trailer and its purpose is to interest you, so the climax is never shown. This brings me to talk about the narrative in its effect of making audiences want to experience the action and fear created buy viewing through the safe environment of the cinema. By only seeing certain key scenes in a film trailers they allow you to create affective expectations and generate your own intentions of what the full feature will contain. These expectations from the audiences are what Wolfgang Iser calls ‘Textual Gaps’. The film industry assume the audience will generate there own desired intentions, emotions and expectations after viewing the trailers. For example a trailers principle features or rhetoric might highlight a films quality of music or sound and spectacle or narrative. This is vital in terms of audiences having there own intentions and wanting to go and see a film they desire rather then seeing the real film. The point being, plot developments in trailers only reveal a certain amount and their purpose is to inform but then entice audiences to fill in the remaining information with intentions then effectively the trailer has fulfilled its job in attracting the viewer. Genre The narrative explanation of story plot and information is closely related to the genre in terms of the style in which this narrative is represented and in a form that audiences can recognize. Some trailers focus more specifically on the dialogue, sometimes the trailer will focus more on the spectacles or just show who stars in the film and name the most famous actors. This usually identifies quickly the genre and type of film trailer you are viewing. For instance the Die Hard film sets the narrative and then the remainder of the trailer focuses more on display of the established conventions recognised by the American society such as the use of guns and explosions that are emphasized on. Another film that I will analyse approaches the genre in a similar manor. Alien V Predator Requiem starts of by presenting a very calm environment then suddenly turns to show action and gun fire. To show the audience the genre of the film both these trailers employ similar techniques. Both these trailers point to the use of Tzvetan Todorov’s narrative theory, in which the narrative situations take transformational steps in the process of cause an effect principle. This is evident in Alien Vs Predator Requiem trailer where equilibrium is stated with an establishing scene of the town location, a disruption is outlined in the trailer by the entrance of an unknown object through the sky and the following scenes displays the killing of a father hunting in the forest with his child. As a search party make there way through the forest to find a body, becomes the recognition of the disruption. The footage that follows, display the attempt to repair the disruption caused in the earlier stages of transformation of the narrative. Anomaly with film trailers is that the last stage on transformation known as the reinstatement of the initial equilibrium is not shown as this lures the audiences into going to see the full story. Although I have analysed a film trailer with the use of a narrative theory while talking about genre, it is relevant for the following reason. The nature in which the story follows the stages of transformation also shows that action has to be taken against the disruption of the equilibrium. This allows the images to focus on the action and genre of this film trailer. It is the formation of selected shots which appear to present itself in the form of this ‘causal transformation’ All film trailers will have establishing scenes with a message clearly showing the films genre, either by showing particular scenes or putting emphasis on the story and actors. I will be closely analysing the Die Hard trailer as a case study to distinguish the meaning of genre and how it is created in trailers. An important technique to describe here is the unique selling point of film trailers in which the films most attractive features are shown and emphasized on. I believe this technique is directly linked in identifying the genre of action films. This is evident in the Die Hard trailer as the big spectacles are emphasized on to present the action in a loud and interesting manner, therefore the unique selling point of the trailer being the action. This leads to the use of conventional genre ideas that are recognised by many audiences in the broader perspective. These conventional genre ideas being such features as guns, big car chases as well as car crashes and explosions of some nature. These events inform the audience of particular attributes that allow viewers to distinguish action films from horror films. These traits are quickly recognisable features within a cultural society of film viewers. Further more one technique of defining a film trailer through genre is the selection of shot types used in creating the trailer. The editing technique is very important in the creation of the trailer, because the selection of shot determines the effect achieved on screen and also the use of shot can explain clearly what the scene is showing. As the die hard trailer starts, Christmas music is playing, the setting and environment looks natural as the equilibrium has been set, until the trailer changes its mood. A close up shot of the villain shows him shooting a number of bullets into the air. This scene of a gun being fired defines the trailer as an action film, as the scenes to follow show more action. The audience only know this through past cinematic experience which implies action films have a number of set agreed cinematic conventions to which the audience identify film trailers through. Another action genre film trailer also employs the same techniques of unique selling points and the use of shot selection to present the action such as Alien Vs Predator Requiem. The trailer begins with a slow tempo and an establishing shot to show the peaceful environment, at this point the genre is fairly unclear. Around the middle of the trailer the mood changes and a medium shot shows a ball of fire entering the scene, this implies an object has shot past from outer space. This is the definitive scene in the trailer because it shows a change in the narrative. The following scene show more action and the trailer then goes on to show the films unique selling point, the Alien. In addition actors are also used to sell films because of their star status. This is evident in my next case study Pulp Fiction. The scenes in this trailer are used to show the large cast starring in the film, while still showing the film in a clever design. The unique selling point of this film trailer is the use of the actor’s star status as well as the action in the film. While this film lacks big spectacles it is still an action movie but focuses more on the dialogue and narrative. The trailer introduces the idea of different stories taking place while putting the emphasis on the cast. The trailer uses intertitles to bridge the first story from the second, in between these scenes the trailer uses inter titles to display the words ‘loyalty’, ‘betrayal’ and ‘crime’ to separate the stories, at the same time very little is revealed. By introducing the cast through each of the stories, the use of the inter titles using words associated with the stories the film trailer sets the genre as well as the unique selling point of the film. Because the focus is directed more on the cast and the narrative the action comes across as equal as the other features. The trailer ends with a voice over reading out the names of the actors that star in the film, the scenes also follow each other rapidly and are timed with the names being read out. This type of sequence is known as the montage sequience. A montage sequence is where a series of shots are arranged in a particular order for a particular purpose. The sequence is more about presenting the footage in a different way rather that providing the illusion of natural continuity. In the Pulp Fiction trailer this sequence was used to show the actors when their names where being read out. At the same time this sequence was used to show more scenes from the film. Overall the trailer doesn’t reveal much about the story but highlights the Genre and actors very well. I think the trailer is cleverly created in the sense that very little is revealed yet enough is seen along with the three descriptive words giving a definition of the story for the audience to associate what is seen with the tittles describing what will occur in the film. These words leave the narrative open for the audience’s imaginations to build up a film they would like to see. In effect the use editing techniques such as montage sequences and selection of specific shots and transitions trailers form ways of presenting the narrative of a film with aesthetic. Sound As genre and narrative work hand in hand to show the plot and genre another principle feature of a film trailer is the use of Sound. Sound in film trailers is very important, it forces the viewers to use more then just the visual sense, and instead the sound engages the aural senses of the viewers. As sound is as important as the visual footage it can achieve very strong effects and yet remain unnoticed, it is very unlikely a spectator comes out the cinema and acknowledges the film for its aural efforts. As Sergei Eisenstien called ‘synchronization of senses’ known as combining the image and the sound to create a single rhythm or expressive quality. I have picked a trailer for my case study where I think the synchronization of sound with image is important in the creation of meaning and overall mood of the film. The sound used in films is known as the film sound track for example the Rocky film trailer. This trailer uses music to create emotion and mood in away that emphasizes the emotion created in the scenes, this emotion is used to reach out to the audience for them to engage with the characters feelings. The Rocky trailer uses a specific sound track to create emotion around the story for example the tempo and rhythm changes according to the images. The music changes dramatically in the scene with rocky and the women kissing, this scene implies romance but the music sets a specific mood that an audience can relate to, it creates an atmosphere to go with the scene. The next scene shows a man having a talk with Rocky, the music changes instantly to imply chance, possibility and the intention of something happening (Cause and Effect) the music here changes from the piano to a kind of tower clock bell ringing. This trailer uses music to create emotion but it is in excess of change, the mood in the trailer changes to often and switches from romance to opportunity then back to sad music then to energetic music, the positive side to this music is it displays an emotional plot and the Rocky’s struggle to make something of his life. This kind of sound is known as nondiegetic sound. Nondiegetic sound is represented by sources existing outside the story world. As I carrying out analysis on action film trailers nondiegetic sound is important as music is the most commonly used type of sound in action films to create effective emphasis on the action: ‘Viewers understand that the â€Å"movie music† is a convention and does not issue from the world of the story’ A trailer is defined as a brief film text that uses images from a specific feature film while asserting its excellence, its purpose being to project in theatres to promote a films theatrical release. A film trailer is an essential marketing tool and the nuclei of the promotional effort being an advert for a film the trailers design features are as important as its other functions. The most important principle of a film trailer is what it functions as best, its distribution, promotion and marketing of an upcoming film. This process occurs before the product reaches the viewers. ‘There are many forms through which we can communicate.’ I consider this statement as a starting point linked to film trailers because trailers are presented in many mediums to a wide range of audiences to different cultures. This is also where the idea of promoting trailers and marketing them begins correctly. There are many different processes to consider in knowing the target audience and what type of category the film fits into. As I am going to be looking at the action genre in film trailers, the target audience will be a ‘core audience’ who is attracted by the varying story lines but the essential action is what appeals to them. Films are put into certain categories known as genres, these films having different attributes which in turn address different audiences. Attracting a huge audience starts with knowing the genre and type of film, this leads to the right distributor who is required to get the film to the exhibitors. The marketing campaign also lets the audience know the film is in the process of being produced and when the release date has been set for. The idea of releasing the trailer early is to create a fan base or create enough interest for a potential audience and to generate enough hype up until the film is finished and ready to premiere. The importance of marketing a film can affect the overall outcome of the film in theatres. The marketing of a film includes the total strategy required to sell a film. This strategy includes the different types of advertising, promotion and distribution of a feature length film. Marketing is the strategy employed to find the most effective way to get to your audience or buyer Once a film is complete, marketing supplements the various forms of conventional advertising (Trailers, Television, Radio, Press, Poster Campaigns and the Internet). The idea of marketing lies around creating a positive image around the film which has been produced. As quoted above the conventional advertising practices, one has not been mentioned, name tie-ins. Tie-ins are contracts between companies selling consumer products with distribution companies. The consumer products can be of everyday use such as food labels carrying images and titles of the films, toys and cloths, all of which promote the film. Although advertising is a specific strategy to expose a feature length film, the marketing is more about the total exposure to the general public on the whole. An important part of the marketing process is known as Market research. This element is vital to the success of a blockbuster movie of contemporary cinema. Its function is to monitor the response of the public’s reception towards an advertised film and to change the marketing strategy accordingly. The three most significant events in selling a film are the pitching of a film idea, finding the distributor and finding an exhibitor. First the distributors or financiers have to finance a movie where a script has been written by someone who wants it to be made into a film. The financiers or the distributors are known as the first buyers. From this the distributor must market the film further and pitch the finished film to an exhibitor. Just as the distributor brought the script and idea of the film so does the exhibitor wish to view the completed film before deciding to show the film in all of its chain of theaters. The Exhibitors are known as the Second Buyers. Finally the advertising and promoting a film to an audience is known as the third buyers.The promotion and the advertising is the job of the distributor and the publicist. All these processes fit together as the marketing (selling) of the film to a potential audience. Trailers are basically another form of advertising a product, where the film is the product and the trailer being the advert. ‘Attempts were made to advertise films with trailers as early as 1912.’ Promotion is a form of advertising; the devices involved in promoting haven’t changed drastically since the exhibitors first started promoting in the film industry. I believe that the function of promotion is to inform society and different cultures that a product is out and available. It was the arrival of Nickelodeon around 1905, which fundamentally changed the advertisement strategies. Promotion of feature length films began when the amount of exhibitors grew and the competition for the amount of films released also grew. The exhibitors felt the need to advertise their films so as to attract the public to their theatres. The exhibitors put up posters, made flyers and distributed them to the homes of the general public as well as even hiring barkers to shout out information about their films. From 1908 onwards promoting products seemed the only way to reach out to the public to seek there attention and compete against other exhibitors. At this point only the exhibitors were concerned about promoting there products and fighting of other competition the studios and producers of the films were more concerned about the machines that made films. As promotion became increasingly important so did there efforts in seeking the publics attention. Weekly or monthly bulletins were produced listing up coming features; they focused on the plots, sets and stories of the films. Exhibitors set the trend with promotion of films, studios quickly caught on and opened up advertising departments in their companies. These departments controlled the production of posters and other advertising tactics; they supplied these in the form of press books to theatres during the silent and classical eras. These advertising departments established there promotional practices which also continued on into the classical era. Companies such as MGM also began using promotional campaigns; it became the standard procedure to promote films. Trailer on the other hand started appearing around 1912 but didn’t become coherent until a few years later. It is clear that within a decade of Hollywood cinema the promotional campaign was the most important element in the film industry. Moving towards the classical era, trailers are the one practice where they have changed according to the lengths and qualities of the feature length films. As in the silent era films were not long enough to have trailers but in the classical era trailers generally consisted of voice over narrating on top of film footage, including text over the image using hard-sell tag-lines to sell the picture. I came across an example of a classic film containing these hard-sell tag-lines. The King Kong (1933) trailer is a perfect example of these inter titles emphasizing the film as a must see feature, one of the inter titles reads: ‘Still†¦the most amazing show on any screen! Although this function was more important in the silent area the voice over was more relied on in the classical era. The basic premise, of reminding viewers that trailers are only a quick guide to the full length feature, are still proving that these inter titles are promotional messages. I believe this promotional practice is the most effective out of the whole marketing campaign. Most of the promotional tactics that exist today-trailers, print advertisements, press books, posters, promotional tie-ins, and star premieres- were in place by 1915, although their forms have changed since then. Before internet advertising, the conventional Hollywood marketing campaign consisted of successfully advertising through well known mediums such as the Posters, the Radio, through newspapers and the T.V. These practices had remained consistent and familiar with the American cultures until 1995 media and advertising took a major leap and began a new type of advertising tactic. This tactic was known as internet promotion. In the summer 1995, media and advertising executives announced that the internet had become the â€Å"new frontier† in film productions. The internet plays an important role in the marketing of films, it is such a big platform for a film to be advertised. As genre is concerned it would be difficult to direct a film trailer towards a specific audience, the internet is such a level playing field that the trailer would be open at any and everyone. As Vinzenz Hediger notes, in the contemporary market, trailers are very cost effective since they utilize approximately 4.5% of the advertising budget of a given film, while generating at least 20% of the films box office revenue. This is fact adds to the reason why film trailers are my chosen topic of interest, I consider them the most effective feature in a marketing campaign. It is the visual elements and the free sample of the actual event that attracts social cultures. The internet has a big role in this. Although the internet had been around since the 1960’s the main use for it was text based. Towards the late 1990’s faster connections were produced opening up the opportunities to promotions and advertisement to a mass audience over a new platform. The reason for this being the internet allowed for communication through to the social cultures as well as society being able to communicate with each other. Trailers come in many formats over the internet; they can be downloaded, watched online and even downloaded to mobiles. In a professional context companies are competing on the same level, as a website nowadays can be put up fairly quickly, the only implication here is that some websites get more attention and visits then others. Marketing Batman Forever (1995) was the first major Hollywood feature to get advertised using a website as the centre piece for the campaign. As the arrival of the T.V. disrupted the flow of the film industry it seemed like the internet could possibly do the same for advertising on the T.V. This website contained more information about the films sets, plots and textual narrative all on the same website. This type of promotional campaign became more of an interactive activity which encouraged society to engage with the film experience. Through my research I have learnt that the promotional campaign has always had to adapt to the arrival of new mediums, but I have also learnt that society has adapted to. Th

New Orleans - Before The Civil War :: essays research papers

New Orleans is a city in southern Louisiana, located on the Mississippi River. Most of the city is situated on the east bank, between the river and Lake Pontchartrain to the north. Because it was built on a great turn of the river, it is known as the Crescent City. New Orleans, with a population of 496,938 (1990 census), is the largest city in Louisiana and one of the principal cities of the South. It was established on the high ground nearest the mouth of the Mississippi, which is 177 km (110 mi) downstream. Elevations range from 3.65 m (12 ft) above sea level to 2 m (6.5 ft) below; as a result, an ingenious system of water pumps, drainage canals, and levees has been built to protect the city from flooding. New Orleans was founded in 1718 by Jean Baptiste Le Moyne, sieur de Bienville, and named for the regent of France, Philippe II, duc d'Orleans. It remained a French colony until 1763, when it was transferred to the Spanish. In 1800, Spain ceded it back to France; in 1803, New Orleans, along with the entire Louisiana Purchase, was sold by Napoleon I to the United States. It was the site of the Battle of New Orleans (1815) in the War of 1812. During the Civil War the city was besieged by Union ships under Adm. David Farragut; it fell on Apr. 25, 1862. And that's what it say's in the books, a bit more, but nothing else of interest. This is too bad, New Orleans , as a city, has a wide and diverse history that reads as if it were a utopian society built to survive the troubles of the future. New Orleans is a place where Africans, Indians and European settlers shared their cultures and intermingled. Encouraged by the French government, this strategy for producing a durable culture in a difficult place marked New Orleans as different and special from its inception and continues to distinguish the city today. Like the early American settlements along Massachusetts Bay and Chesapeake Bay, New Orleans served as a distinctive cultural gateway to North America, where peoples from Europe and Africa initially intertwined their lives and customs with those of the native inhabitants of the New World. The resulting way of life differed dramatically from the culture than was spawned in the English colonies of North America. New Orleans Creole population (those with ancestry rooted in the city's colonial era) ensured not only that English was not the prevailing language but also that Protestantism was scorned, public education unheralded, and democratic government untried.

Comparing Half Caste and Search for my Tongue Essay examples -- John A

Comparing Half Caste and Search for my Tongue Culture. It’s a very complicated term, with many different interpretations, but what does it actually mean? In this essay I will compare two poems from completely different cultures to see if we get any comparisons, the poems I have chosen to write about are Half-Caste by John Agard and Search for my Tongue by Sujata Bhatt, I have chosen these because I feel they raise some very significant points. But back to the question mentioned earlier, what is culture? Everyone has a different view on culture, but to me it is a huge influence on our everyday lives, many different issues contribute to the term ‘Culture’ from the way we dress, to our beliefs, attributes, how we live, and even what we eat. It affects us all differently depending on how we understand it, for example, if we were to believe that culture was just a religious matter we would only be affected by what that religion tells us, whereas if we were to believe that culture was a whole way of life we would be affected in a completely different way. Culture is important to us all, regardless of how we feel about it, it gives us a guide to our lives and shows us some boundaries; it can also give us advice and help us to be a better person. The word ‘different’ can be used in two contexts; we can say it both complimentarily and offensively, my understanding of this is that some people are afraid of what’s different and therefore have to make comments to feel safe. But when we say ‘different’ cultures we are referring to the way other people live, and if we are afraid of this we must all seriously reconsider ourselves. As I have already mentioned one of the poems I will be studying is Half-Caste by John ... ... the end of the poem though she seems to have won the fight. In conclusion, everyone looks upon culture differently; there are those who take it seriously and those that don’t. But whether or not we like it we are all part of a culture and should therefore respect other’s. Of course culture can be seen as something to fight with, there are so many people in the world with different views it would be surprising if it wasn’t! In my opinion both authors use language as something to fight with and against in their own unique ways. Both of these poems use some sort of violence to get a message across, this to me is a type of fighting, so the answer to my question is ‘YES’ we could see culture as something to fight with or against because of the language both poems use, for instance the taunting that John Agard uses and the metaphors that Sujata Bhatt uses.

Identity and Belonging Context Essay Essay

A strong sense of identity & belonging are vital for personal happiness. Intro; Imagine youre a child on a playground who is bullied. You feel rejected and left out. At home with your family you are comforted and warm, and you are able to play games and do what you like, be yourself. Although you do not feel as though you belong at school, you feel as though you belong. This makes you happy. You can be yourself and your identity is not lost when you are at home. Some could argue that this is personal happiness. However it could be stated that because you have not got a strong sense of a identity in the outside world, it is difficult to understand your public identity, therefore perhaps not even have one. Some have multiple identities for different communites in their lives. Humans are not meant to belong to every group there is, our likes and dislikes form our identity and who were are. In saying this, it is important to have a strong sense of who you are and where you belong, regard less of who this is and where this person belongs. Belonging to multiple groups means sometimes changing your identity for these groups. You might be the confident coach of a soccer team, but also the quiet and demure listener of a book reading evry week. Identity is formed around what a person is like. gaga. To not understand oneself adds difficulty in finding where you belong. Perfect chinese children; ‘ Erica doesn’t speak to [her] for the rest of the day. Without knowing why, [she is] ashamed’. Vanessa is ashamed because Erica saw her as resembling the Australians more than an Asian, but she doesn’t understand when she is just as ridiculed as Erica is. This puts Vanessa in a confusing and upsetting place, not knowing who she is and who she belongs with. She doesn’t understand if she is Asian or aussie, and in her world those seem to be the only two places to fit in. If you don’t have an identity, how are you supposed to know where you belong? Youre identity is like a key to your own happiness. If you know who you are, and what you like or don’t like, you know where you belong. An identity crisis can cause you to feel lost and unknown

Argumentative text about education at home Essay

Education means school, classrooms and annoying teachers- for me. But it does not mean this any more. There is an increasing number of parents now who teaches their children at home. Education at home has advantages and disadvantages. One advantage is that children can study flexible. Their parents can give them a different timetable every day to make studying more interesting. Secondly the children won’t be affected by criminal classmates and wouldn’t learn bad things. But there are disadvantages too. First of all, children could finally feel lonely if they study at home every day. At school, they would study together and have fun in the break with other students. That’s an easy way for children to find friends. However, studying at home with their parents, children may hard find a friend. see more:paragraph writing on my school Secondly, children might find it difficult to work with others, because they’re used to study or work alone. But sometimes you have to work with colleagues as a group in your job. But if you have problems with team members, you could lose your job. Finally, children could be worse in their study, comparing with children who have classes at school. Their parents can not give a guarantee, the quality of education of their children. Sure, there are many people who graduated from university but that does not mean that they are good teachers. In addition, parents also have to focus on their work, which means they can’t spend all day with the education of their children. In conclusion, children can learn more and have a lot of friends when they go to school. Furthermore, children can also easily deal with a team work. Therefor parents shouldn’t assume a huge responsibility to teach their children at home.