Title: Crude oil price and stock markets in major oil-exporting countries: evidence of decoupling feature

Authors: Ibrahim A. Onour

Addresses: Department of Business Administration, School of Management Studies, University of Khartoum, Sudan, P.O. Box: 5834 Safat 13059, Kuwait

Abstract: This paper investigates common cyclical feature between crude oil market and stock markets in major oil-exporting countries including Saudi Arabia, United Arab Emirates (UAE) and Kuwait. The results of the paper show the evidence of common cyclical association between oil price and each of the stock prices at low levels of oil prices, below $40 per oil barrel, but no evidence of such cyclical association between the two asset prices at the high oil price levels above $72 per barrel. This implies that the capital markets in these countries and oil market respond in different pattern to cycle generating shocks, as high oil prices may raise global investment risk.

Keywords: common trends; shared cycles; nonlinear cointegration; crude oil prices; stock markets; oil exporting countries; oil exports; Saudi Arabia; United Arab Emirates; UAE; Kuwait; investment risks.

DOI: 10.1504/IJMEF.2012.044464

International Journal of Monetary Economics and Finance, 2012 Vol.5 No.1, pp.1 - 10

Received: 13 Oct 2010
Accepted: 26 Jan 2011

Published online: 26 Dec 2011 *

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