The study is to examine the effect on the stock market of Gulf Council Countries due to the fluctuations of the oil prices. The stock market condition for a period will analyze by the statistical tools and the conclusion would be whether the oil prices affect the stock markets of the gulf council countries or not…
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The author has rightly presented that energy is one of the most important factors of global economy. A country, which has enough sources of energy, can be one of the richest countries of the world. At present oil is the primary and most used sources of energy in world. Gulf countries are the major sources of oil, so their economy is one of the strongest in the world. The changes of the world economy majorly depend on the changes of oil prices. When the oil price increases, then the manufacturers around the world has to incur more cost in the manufacturing process. The cost of transportation also increases. Because of the increment in the operating cost, the profit of the company decreases. A country’s economy mostly depends on the performance of the companies. When the performance of the company decreases that is the profit of the company decreases, then the economy of the country also get affected. The foreign investors also feel less attracted for the economy of the oil importing country. The investors feel that if they invest that amount of money elsewhere then they can generate more return as the efficiency of the oil importing countries have been decreased due to the oil price hike. However, it is also a fact that the present era is the era of globalization. In this era of globalization, the economy of one country has certain effect to the economy of other country. As the oil price hikes so, the country, which imports oil from some other country, found problem in manufacturing. They have the problem in the manufacturing of the products, which are the need of the oil exporting countries. (Aliyu, pp. 8-9). The product price will also be high. The inflation increases and the price of the goods and services increases. The value of the currency comes down for the oil importing countries. For the oil exporting countries the price of goods, which they have to import from any other country increases. Though they make huge profit by exporting oil to other countries, they also have to pay more than the normal for the goods they import from the other countries. The oil price hike does not only increase inflation, but also it affects other macro economical factors like gross domestic product, unemployment rate of the country. As the productivity of the companies decrease due to the hike of oil prices, the gross domestic product of the country also decreases (OECD, pp.5-6). As the productivity of the companies decreases, the unemployment rate also increases. If the productivity of the company decreases and the unemployment rate increases, the economy would suffer huge blow. The capital inflow in the market would decrease. The stock market of the countries would have less capital flow and the market indices will be down, as it was in the case of the global recession of 2007-2010. In the era of globalization, when the stock market of one country depends on the performance of the performance of the stock market of some other country, then the stock market of the richest countries even get affected. This happens in case of the gulf Council Countries also. The gulf council countries are consisting of Qatar, Baharin, United Arab Emirates, Saudi Arabia, Oman and Kuwait. All are the countries from Middle East. The countries of the Middle East are one of the largest oil producing countries (International Monetary Fund, “The Impact of Higher Oil Prices on the Global Economy”). Though they get benefit from the price hike of oil, their stock market also get affect from the events. Objective of the Project The objective of the study is to examine the effect on the
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“The Impact of Oil Price Changes on the Gulf Council Countries (GCC) Dissertation”, n.d. https://studentshare.org/finance-accounting/1395771-the-impact-of-oil-price-changes-on-the-gulf.
A comparison will then be made to ascertain the reasons for variations in any of results obtained as the price of crude oil varies. Analysis of liquidity, solvency, asset anagement and leveraging results will form part of this process.The research will provide undisputable evidence to support the proposed hypothesis.
The dissertation, An Investigation of the Impact of Oil Price Changes on the GCC Stock Markets, aims to investigate the impact of oil price fluctuation upon the stock market index of the GCC countries over the last five years. The world has a voracious and an insatiable appetite for oil. It is the rudimentary raw material to drive our economies.
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The year has come and gone, and the decade leading up to the deadline saw a flurry of studies on the likely success or failure of the union. Studies in the nineties and early in the new millennium tended to polarize views to either strongly favour or disfavour the eventual success of the union.
Purpose of the Study--------------------------------------------------------------p.15 3. Review of Literature----------------------------------------------------------------p.16 4. Methodology-------------------------------------------------------------------------p.36 5.
The research will establish the different causes of rise or drop of the stock market index in Kuwait and relate the findings with the oil prices at different particular situations. The research will assess the various issues that determine the direct effect of changes in oil prices in the Kuwait and compare it with others countries.
The background will pave way for a discussion of the research problems and the formulation of core research questions and research processes. The chapter will also provide an exegesis to the scope of study and the outline and structure of the research that will be conducted in the entire study.
The price of oil has decreased significantly. This has created economic risks in the GCC region due to massive effects on the stock in member states. The paper addresses the effects of decline in oil prices
There have been several studies trying to establish this relationship and more so how the prices influence the stock market activity.
Past studies indicate that there is a possible link between changes in oil prices and
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