Stock market returns has increasingly become a leading indicator of a country�s economic\nperformance. This explains academia�s growing interest in determining factors affecting stock\nreturns. A majority of recent studies on Singapore�s economic performance focused centrally\naround policy impact or property prices, and not specifically on stock returns. This study\naimed to fill this gap, by examining if, and how, historical movements in the Straits Times\nIndex (STI) were explained by the S$NEER, Monetary Supply, CPI, Balance of Payments,\nCrude Oil Prices, Electricity Generated, GFCF, Industrial Production, Merchandise Trade, or\nLabour Cost. By utilizing a Structural Vector Auto regression (SVAR) Model, approximately\n48% of the STI�s variance was collectively attributable to these ten macroeconomic variables,\nall of which had short-term impact on the STI. Looking forward, further research could be\nconducted examining the impact of said variables on individual sectoral stock indices, for\ngreater insight on the dynamics of their relationships.
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