Market Capitalization in Southeast Asia: An Analytical Perspective on Trends, Influences, and Economic Impacts: Insights from Indonesia and Malaysia

Market Capitalization in Southeast Asia: A Comparative Analysis of Indonesia and Malaysia (1995-2022).This research by Alvine Dongmo Tebou examines the evolution and interconnection of market capitalizations in Indonesia and Malaysia over nearly three decades. It highlights market capitalization as a vital indicator of financial health and investor confidence.Key events such as the Asian Financial Crisis (1997-1998), the Global Financial Crisis (2008), and the COVID-19 pandemic (2020) are analyzed for their impact on stock market performance and resilience. The study employs Ordinary Least Squares (OLS) regression and the Capital Asset Pricing Model (CAPM) to explore the relationship between the two markets. Using reliable data from sources like the World Bank, the research identifies a strong correlation (Pearson coefficient of 0.899) and reveals Indonesia's significant influence on Malaysia’s market capitalization.The findings demonstrate how Indonesia's market growth and Malaysia's financial stability contribute to regional economic integration. For investors, the study offers insights into risk management, while policymakers are guided on enhancing financial stability.