International Journal of Enterprise Computing and BusInternational Journal of Enterprise Computing and BusInternational Journal of Enterprise Computing and BusInternational Journal of Enterprise Computing and BusinessinessinessinessSystemsSystemsSystemsSystemsISSN (Online) : 2230ISSN (Online) : 2230ISSN (Online) : 2230ISSN (Online) : 2230----8849884988498849
Vol. 1 Issue 2 January 2011
The story that Asia is becoming the growth centre of the world economy is in circulation forsome time. The dynamics of the world economy are changing. China and India happen to bethe 2
and the 4th largest economies respectively in the world in terms of GDP atpurchasing power parity (Euro monitor 2010, Appendix A). The equity markets in emergingeconomies are on a high since 2005. The Asian economies are advancing technology wiseand are acting as an attraction for foreign capital. The increasing regionalization of economicactivities and the liberalization of financial markets since the late 1980s resulted in regionaleconomic integration, i.e., integration among the markets within the same region e.g. greaterco-movement in the stock prices of South East Asian countries due to economic ties, lowergeographical distance, and foreign investments or due to a common movement offundamentals which is called the
factor (Mukherjee and Mishra 2007). Due to theincreasing interdependence of major financial markets all over the world, the transmission ofstock return movements among major national markets has become a necessary researchtopic and is commonly termed as
international stock market integration.
The degree of acountry’s economic openness or capital control throws light on the degree of association withthe financial markets in the world. Greater integration would mean a free or relatively freeraccess to foreign financial markets. This better access would provide many firms a broadersource for fund raising.The distribution of stock returns is important for a variety of trading problems. The scientificportion of risk management requires an estimate of the probability of more extreme pricechanges. In statistics, normality tests are used to determine whether a data set is well-modelled by a normal distribution or not, or to compute how likely an underlying random