The price of oil for future use as an indicator of prices of stock exchanges

9/19/2016 0:00

BAGHDAD - Imad Emirate
World oil markets have seen dramatic developments represented a broken record oil prices that have been made at the end of the seventies of the last century, more than once, but it came to be seen through several world records per day, the oil price movement accompanied by similar movements in the prices of international stock indexes in the exporting countries crude oil, raising many questions addressed by some research and economic studies.

As part of this trend among academic d. Haider Frejee of the Faculty of Administration and Economics at the University of Mustansiriya, the importance of the two sides (the oil and stock indices), commented that the study of this relationship represents an important area of ​​theoretical and applied fields in the financial management field may represent a starting point for studies of a deeper and more sedate in this area.

He Frejee in an interview with «morning« if to prove this relationship we will have an important factor that can be used to predict the movements of the financial markets indicators through the identification of future oil prices, stressing the need to study the nature of the relationship between oil prices and indices of international stock exchanges, and the similarity between all markets, enabling the price of oil for future use as an indicator of stock market prices.

He Frejee the reality of the emergence of some global financial markets, including specifically the New York Stock Index Securities, which opened in 1817 and is currently dealing with more than 3,700 paper and approximately from 3040, the largest stock exchange in the world and sometimes called the (grand council).

Adding that this market is managed through conservative council elected by the stock exchange members and consists of representatives from listed companies and brokerage firms, and government representatives, and comparable to the market area of ​​a football pitch, and customized to handle stocks with strong activity, while the rest of the securities are traded in the attached hall market New York's index is an indicator of the leading companies that are selected by the management of the market and according to specific criteria, so the number of these companies varies from year to year.

And it went, the New York Stock Exchange index prices in the years of work saw limited volatility between the rise and fall in the fact that there are a lot of factors governing price index especially with regard to the US economy, but this did not prevent the emergence of the impact of oil price fluctuations in the index as it highlighted the rise in prices oil pressure on the US economy as a whole, which is reflected on the US financial markets, the average value of the index stood at 6945 points, while the highest point 7517, which is higher than the value of the index in the base period by 6 percent, while achieved the lowest level of the market amounted to 6935 points, its lowest of the base period by 2 percent.

He concluded Frejee saying: figures show, and through graphical indicators, the New York market was relatively low due to the stability in the market and the possibility of not affected directly volatile oil prices, due to the sheer size of the market and the multiplicity of factors affecting them and to diversify great in their sectors.