Cikgu, "This is very bad news!"
Student, "What, Cikgu?"
Cikgu, "I read from ProTradeShares.com that the Bursa Malaysia KLCI has dropped below 1,000 points."
Student, "What does that mean?"
Cikgu, "It is the lowest in the last 2 years. Although I don't buy any shares, I am concern."
Student, "How will the drop in Bursa KLCI affect us, Cikgu?"
Cikgu, "Generally foreign investors look at how well a country economy is by looking at how well the country's stock exchange perform. If the KLCI continue to drop, it will send the wrong signal that out country's economy is bad. Its a chicken and egg situation. Eventhough our country economy at this moment is not down, the effect of foreign perception on our economy can cause a drop in foreign investment. This drop in investment will eventually lead to a down turn in our economy."
Student, "If our economy is doing well, then why has the KLCI drop so much?"
Cikgu, "There are many factors. One of them is of course due to US problem with Lehman and AIG. Lehman Brothers, one of the largest investment bank in US has filed for bankruptcy. As for AIG, US government has to bail out AIG. When US government do that, it is to save the country from further economic problem. When our country take the same kind of action, its because to help some cronies. Well that's another story. The other reason our KLCI is doing badly is because of the local political instability due to the bickering of a few political leaders. "
Student, "When will all this end."
Cikgu, "Hopefully soon."
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