Influence of Oil Price on Non-Oil Sector Stocks in Saudi Arabia Research Paper

Influence of Oil Price on Non-Oil Sector Stocks in Saudi Arabia - Research Paper Example The intention of this study is oil as one of the most important economic resources in world’s economy today. Fluctuations and shocks in oil prices have been studied intensively by many leading economists and several theories in economics point to the impact of oil price changes in world economies. The context of oil is even more important in the Saudi Arabian economy as it is has one of the biggest reserves of oil (one-fifth of world’s total) and is the second largest producer (behind Russia) of oil in the world. Saudi Arabia has proven oil reserves of 264.52 billion barrels of oil and was only recently surpassed by Venezuela who claimed their oil reserves had risen to 269.5 billion barrels of oil. In terms of oil production, Saudi Arabia has a quota allocation of just over 30% of production among Organisation of the Petroleum Exporting Countries (OPEC) countries. The Saudi Arabian oil production in 2010 was 9.1 million barrels per day which accounted for 13% of worldâ €™s total oil production. Oil is also a major driver of economic activity in Saudi Arabia. Oil related activities accounted for 47% of the GDP in 2010, and petroleum products exports amounted to $193 billion and accounted for 84% (by value) of total exports in Saudi Arabia. Therefore, oil prices play an important role in the Saudi Arabian economy. However, from the perspective of an investor or an enterprise in Saudi Arabian market, it is also important to know whether oil prices have a major role to play in stock prices of non-oil sector companies too. If there is a high positive correlation between oil prices and non-oil sector stocks, an investor can used these stocks a hedge on their investments in oil. The outcome of this study could therefore be very useful for investors and enterprises already present or planning to enter the Saudi Arabian market. II. Literature Review Stock markets are largely dependent on economic activity in the country. In Saudi Arabia, as oil is a major component of the economy, stocks in Saudi Arabia are expected to indirectly depend largely on oil price movements. The influence of oil is however not limited to Saudi Arabia or other OPEC countries alone. Oil supply and price shocks have been a field of study for many economists globally. Therefore, a lot of research has been previously done on understanding the effect of oil prices on stocks. Where some studies have focussed on impact of oil price shocks on the stock market others have focussed on the general impact of oil prices on stocks. Most of thes e studies are focussed on the US market and there are only a few studies look into this aspect in Saudi Arabia. Because detailed study of oil shocks is out of scope of the current research, the literature review will focus only on studies that have been done on regular influence of oil prices on stock markets. Several studies have been done to understand the impact of oil prices on stock markets. Some of the notable ones among these are Sauter & Awerbuch (2003), Sari and Soytas (2006),

A Study of Fashion Clothes Brand Essay Example | Topics and Well Written Essays - 1750 words

A Study of Fashion Clothes Brand - Essay Example The paper "A Study of Fashion Clothes Brand" analyzes the impact of peer pressures on brand choice between Chinese and UK’s young consumers. There have been instances where it has been noticed that peers influence young consumers’ behaviour. Fashion brands of clothes reflect a symbolic meaning. A young customer wearing a branded cloth is believed to belong to a rich family. They are seen as popular and are allowed to mingle with their peers. This implies that it also indirectly influences the business operations of the companies. Very few research works have been undertaken on this subject. All these constitute the rationale behind selecting this topic. China is considered as the largest consumer markets for clothing industry (Tai, 2005). However, the Chinese brands are still in its initial phase of making their fashion industry international. Men’s clothing is catching up with the international brands in the domestic market. Some famous brands are Shanshan, Bosi deng, Youngor, etc. However, their capacity of revenue earning is low compared to the international brands. Earlier the Chinese fashion industry was fragmented. In recent times, the retail market of China is characterised by the existence of ZARA, GAP, Jack and Jones, etc. Most of the casual wears are locally manufactured. UK market has always been up to date when it comes to fashion. It has been a fashion hub to many renowned international fashion brands from Armani, Gucci, Tommy Hilfiger to Burberry, Tiffany & Co..