Effect of Oil Price on Kuwait Stock Market Index Dissertation

Effect of Oil Price on Kuwait Stock Market Index - Dissertation Example In any country, the fact of presence or absence of oil will always have an effect on the lives of the people because there are different values that people cannot overlook in the establishing of an economy of the country. Oil in many countries in the world is the idea behind industrialization and development of transport systems, which are important aspects of life of the lives of the people. For this reason, oil in any economy has a crucial role because it influences the productivity of the different companies and organisations greatly, either in direct or indirect ways. This essentially means that every country in the world depends on oil as a source of energy to that enhances their production and growth in different perspectives because its prices affects the amount of products a company can have. The analysis of the importance of change in oil prices on the stock market of any country is possible because stock markets depend on the industrialisation and various factors that influ ence the people. The research will focus on the Kuwait Stock Market Indices and it will seek to establish the relationships that exist between the two factors of the economy (Arouri, Jawadi, and Nguyen, 137). Kuwait as a producer of oil, industries in the country have ease of access of the product because it is availed to them through other refinery companies that operate within the country. However, the issue comes in when prices rise or fall because it influences the home and foreign companies.... In this research, there will be two hypotheses; null hypothesis, which will be that Kuwait stock market index, is not affected by change in oil prices and the alternate hypothesis will be that the Kuwait Stock market index is heavily affected by change in oil prices. The Scope of the research The research will be restricted to Kuwait stock market index but to enable a comparison, the research will review the literature of the some previous researches in other oil producing countries’ stock markets indices. The research will rely on that information from different research to come up with an objective view of the idea of the influence of oil prices on the Kuwait Stock Market. Research Objective To establish the relationship between the trend of oil prices and those of Kuwait stock market indices Significance of Study The research will be used to inform the factors that cause change in indices in the stock market and will be used to make recommendations on the various things tha t the government can implement so that they can prevent losses in the stock market. The findings of this research will be important to the investors who would like to invest or who have invested in the Kuwait Stock Markets because it will give them a means to predict the indices at different times of the year. The research will be important to different banking institutions because they will be able to understand the various effects of rending money to their customers so that they can ensure ease of repayments. Literature Review In any country, the fact of presence or absence of oil will always have an effect on the lives of the people because there are