Abstract
Financial networks can be built to observe complex stock market dynamics through the analysis of stock closing price data. In this study, networks of three major events are constructed to compare their impacts on the Consumer Products and Services sector of Bursa Malaysia. Using the threshold method, the 2008 global financial crisis, 2015 stock market crash in China and COVID-19 pandemic networks are built upon 134, 156 and 162 stocks respectively. To comprehend embedded network structures during volatile periods of time, topological properties of the networks are examined. Consequently, this study reveals that stock market networks tend to have high global clustering coefficient values as they herd together during major events. The networks also have small average path lengths, leading to the revelation that this sector of the market possesses small-world properties. Furthermore, fluctuations in the magnitude of negative correlation coefficients are found as a good indicator of triggering events taking place. Networks in the Malaysian stock market tend to have heavy-tailed degree distributions that signify the presence of hubs. While the Travel, Leisure and Hospitality subsector emerges as the epicenter of the sector during normal and calm periods, the hubs identified via centrality measures have a tendency to shift over time, reflecting an evolving market structure. Overall, the impacts brought forth by COVID-19 are more drastic than that of the other two major events. In exploring the intrinsic properties of the Malaysian stock market, the right measures in administering market policies and making data-driven portfolio decisions can be made.
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The data sets used and/or analysed during the current study are available from the corresponding author on reasonable request.
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This work was financially supported by the grant FRGS/1/2020/STG06/UKM/02/8 from the Malaysian Ministry of Higher Education and by the Universiti Kebangsaan Malaysia (UKM) grant GUP-2021–046.
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Conceptualisation: Alyssa April Dellow, Fatimah Abdul Razak; data curation: Alyssa April Dellow, Hafizah Bahaludin; formal analysis and investigation: Alyssa April Dellow; funding acquisition: Fatimah Abdul Razak; methodology: Alyssa April Dellow, Fatimah Abdul Razak, Hafizah Bahaludin, Munira Ismail; project administration: Alyssa April Dellow, Fatimah Abdul Razak, Munira Ismail, Hafizah Bahaludin; resources: Alyssa April Dellow, Fatimah Abdul Razak; software: Alyssa April Dellow; supervision: Fatimah Abdul Razak, Hafizah Bahaludin, Munira Ismail; validation: Fatimah Abdul Razak; visualisation: Alyssa April Dellow; writing—original draft: Alyssa April Dellow; writing—review and editing: Fatimah Abdul Razak, Munira Ismail, Hafizah Bahaludin, Alyssa April Dellow. All authors read and approved the final manuscript.
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Dellow, A.A., Ismail, M., Bahaludin, H. et al. Comparing the Impacts of Past Major Events on the Network Topology Structure of the Malaysian Consumer Products and Services Sector. J Knowl Econ (2024). https://doi.org/10.1007/s13132-024-02038-0
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DOI: https://doi.org/10.1007/s13132-024-02038-0