Track: Business Management

Abstract

The economic growth in developed countries, including Southeast Asia, has a significant effect on economic growth in every region. Of these, all of the countries are agreed to cooperate with each other, for instance, ASEAN.  The economic sector's cooperation is one type of ASEAN collaboration, such as the movement of capital. It is one of the pillars that has been the precursor of the growth of capital market integration in ASEAN countries. It is a financial instrument that trades securities. Thus, the present paper seeks to examine the canonical correlation of global capital index, exchange rates and gold price between two ASEAN countries, namely Indonesia and Malaysia. This quantitative study uses secondary data collected from world bank databases and the central bureau of Indonesia's statistics from 2015 to 2019, consisting of 260 samples. The data analyzed using canonical correlation technique. The analysis results found that the global index, exchange rates and commodity prices between Indonesia (IHSG) and Malaysia (KLCI) have significantly correlated. In conclusion, this study successfully proved that the economic growth of one country is associating with others. This study also confirmed that global index, exchange rate, and gold price have significantly correlated between Indonesia and Malaysia.

Keywords:

Financial Instruments, global capital index, exchange rate, gold price, Indonesia and Malaysia