Determinants of Stock Performance for Selected Asia-Pacific Economic Cooperation Countries (APEC)

Asia-Pacific Economic Cooperation (APEC) held its 27th summit in 2020 and emphasized facilitating trade and investment in the Asia-Pacific region. This creates trading opportunities for investors in the stock market, allowing for potential financial growth and economic development. However, it becomes a challenge for investors to participate in the stock market due to APEC consisting of multiple countries with different risks and opportunities. The main objective is to find, analyse and determine the independent variables that can potentially affect the stock performance of all selected APEC countries in a significant manner. The independent variables included in the study are stock volatility, inflation rate, real interest rate and market capitalization. The study uses underpinning theories to support the independent variables, including Dow Theory, Cost-Push Inflation Theory, Liquidity Preference Theory and Free-Float Methodology. A static panel analysis takes place following the Random Walk Model with the adjusted formula to fit the study. The results suggest that all four independent variables have achieved significant probability values for all selected APEC countries. The significant outcomes may be the result of integration and interdependence among APEC economies, which has indeed created opportunities for investors to gain an advantage over the stock market.