Executive Research Methodology - Research Project Proposal

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Executive Research Methodology-Research Project Proposal

Feb. 2017 – May 2017

Prof. Jayaraman Krishnaswamy

Student Name: Choo Chiu Yen (Joyce)

ID: 0327597

Table of Contents

Abstract:        3

Purpose / Motivation        3

Research Paradigm / Approach        3

Findings        3

Introduction        4

1.1 Investing in the Stock Market        4

Heineken Malaysia Bhd        5

Company Background        5

Technical Analysis (Brief)        6

Independent Variables        7

Financial Ratios        7

Announcements        8

Dividend policy        9

Government Policy        10

Mediating Variable        12

Sentiments        12

Research Gaps        14

Confusion spotting        14

Neglect spotting        14

Application spotting        15

Knowledge spotting        15

Problem Statements        15

Supporting Financial Theories        16

Conceptual Framework        18

Hypotheses        18

Research Design        20

Methodology        20

Conclusion        20

Reference:        21

Abstract:

Purpose / Motivation

- This research methodology paper aims to study the factors influencing the share price of Heineken Malaysia Bhd.

Research Paradigm / Approach

- This is a time series research paper that utilises the quantitative approach and secondary data collection method using the annual reports of Heineken Malaysia over a 5-year period, from year 2012 – 2016.

Findings

- This research paper presumes that an increase in earnings, good dividend policy, positive sentiments and positive company announcements positively impacts the share price of Heineken Malaysia Bhd, while low earnings, negative sentiments and bad news negatively impacts the share price of Heineken Malaysia Bhd.

Introduction

1.1 Investing in the Stock Market  

The stock market refers to a platform where firms issue bonds and securities for trading to take place (Investopedia, n.d.). With the rise in the occurrence of financial crisis, countries’ economic and social aspects are affected adversely (Lestano & Kuper, 2016). The occurrence the 1929 Great Depression, Technology Bubble, 1997 Asian Financial Crisis, the 2008 financial crisis and the latest crash on Shanghai Stock Exchange in 2016 have sent waves of shock to many. In particular, the Asian Financial Crisis has affected many asian countries such as Thailand, Malaysia, Singapore and etcetera with stock markets dropping as much as 70% (The Balance, n.d.). For every country, the financial markets are one vital “part of the total infrastructure for every society, nation and stock market,” in which the financial markets are crucial for the economic development of a country (Baten et. al, 2014). The stock market is one of the most volatile markets compared to the real estate or human resources due to the trading of non-tangible assets rather than material goods, characterised by transaction period of as short as seconds, minutes or hours (Droj, Lancu & Popovici-Coita, 2016). Besides, market pricing in the financial market is largely subjective, influenced by factors such as investor expectations or sentiments on the profit and growth of firms (Droj, Lancu & Popovici-Coita, 2016). Furthermore, some managers and analysts have resorted to forecasting the stock market volatility with the aim to make more accurate investment decision (Ong & Lim, 2011).  

Investing in the global context can be intimidating at times as there are so much to research on before one arrives at the right investment decision that harbors profitable returns as there are so many different stock exchanges around the world, including but not limited to: the New York Stock Exchange (NYSE), the London Stock Exchange (LSE), Singapore Stock Exchange (SGX), the Kuala Lumpur Stock Exchange (KLSE) and many more.

The Malaysian stock exchange is the Bursa or the KLSE, set up with the aim to provide a balanced economic environment (Ong & Lim, 2011). Lean (2015) has done a studies on the preference of investing in the KLSE and findings show that investors who are risk-averse prefer to invest in indexed stocks, while risk-seekers look for long index futures for profit maximisation.

Heineken Malaysia Bhd

Company Background

Heineken Malaysia Bhd (HEIM) was listed on the Kuala Lumpur Stock Exchange (KLSE) in 1965. HEIM is a merger of two brewing giants – Guinness Malaysia Bhd and Malayan Breweries (Malaya) S/B. It was previously known as Guinness Anchor Bhd (GAB) and Dutch Brewer Heineken NV renamed the company as Heineken Malaysia Bhd upon a 100% acquisition of GAPL Pte Ltd stake in 2016, in which the latter currently holds 51% in GAB (Puspadevi, 2016). HEIM always ensures the smoothness of operation and quality of products, from the research of seeds to brewing, packaging and distribution HEIM through its holistic approach for sustainability (Annual Report 2016, Pg. 4). HEIM employs around 547 people currently (Annual Report 2016, Pg. 5). Its product mix currently consists of beer brands like Heineken, Tiger, Guinness, Anchor, and Strongbow. Despite the tough economic conditions both globally and in Malaysia, HEIM continues to perform through increased excise duties, competition from contraband products, regulatory tightenings and etcetera (Annual Report 2016, Pg. 24). In FY2016, Heim achieved double-digit growth of 11.1% in profit before tax to RM549 mln and a 4.9% growth in revenues to RM2.8 bln (Annual Report 2016, Pg.26). Heim continues to grow with a deep focus on innovation by introducing new product variants to its product portfolio, holding creative marketing campaigns to capture greater market share and to penetrate deeper into its customers’ lives, for instance, the latest marketing campaign has caught greater attention as the brewer set out RM2 mln worth of prizes for its Chinese New Year (CNY) 2017 campaign “Abundance of Prosperity” (The Star, 2017).