International Conference on Eurasian Economies
10-12 July 2017 – Istanbul, TURKEY
Paper detail
Paper ID : 1878
Status : Paper published
Language : Turkish
Topic : Finance and Financial Crises
Presenter: Asst. Prof. Dr. Ensar Ağırman
Session : 4B Finans II
The Relationship of Petroleum Price and BIST Sector Indexes
Petrol Fiyatları ve BIST Sektör Endeksleri İlişkisi
- Prof. Dr. Reşat Karcıoğlu (Atatürk University, Türkiye)
- Dr. Muhammet Özcan (Atatürk University, Türkiye)
- Asst. Prof. Dr. Ensar Ağırman (Atatürk University, Türkiye)
Abstract
Energy is not only indispensable element of everyday life, but also underlies industrialization and manufacturing. Energy and manufacturing have become integral parts with the importance of mechanization since the Industrial Revolution. As a result of this emerging situation, businesses, have become sensitive energy and energy prices. For this reason, changes in energy prices directly affect businesses and are thought to have effects on fluctuations in stock prices. Changes in the prices of primary energy sources directly or indirectly affect capital markets. In energy importer countries including Turkey, high energy prices cause an increase in current account deficit and decrease in real national income by increasing the amount of energy imports. In addition, high energy prices lead to cost-based inflation increases as they directly affect raw material prices used in production. All these factors indirectly affect capital markets. Direct effect of energy price changes on the capital market is explained by the fact that energy is an indispensable input in industrial production. In cases where the energy price increase is not reflected to the consumer, the profitability of the enterprise is decreasing. A decrease in profitability affects firm's stock price as well. The aim of this study is to reveal the relationship between sector indices in the Stock Exchange Istanbul (BIST) and oil price changes. Weekly data set for the period for 2006:1 - 2016:4 is used. Johannes co-integration method is used to measure long term relationship in the study.
JEL codes: D53, P45, E44
Karcıoğlu, Reşat, Özcan, Muhammet , Ağırman, Ensar (2017). "The Relationship of Petroleum Price and BIST Sector Indexes" in Proceedings of International Conference of Eurasian Economies 2017, pp.301-306, Istanbul, TURKEY.
DOI: https://doi.org/10.36880/C08.01878
