Investigation Into the Key Factors Impact on Gulf Cooperation Council Stock Markets Performance

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Investigation into the key factors impact on Gulf Cooperation Council stock markets performance.???
Gulf cooperation council is made up of six member countries which are Qatar, Bahrain, Kuwait, Oman, Saudi Arabia and united emirates. The main aim of this cooperation is to regularly check the performance and the factors that affect the stock markets. Stock market is the key indicator or the economic growth of any country. There are many factors that influence the stock market and they include:
1. Money supply and Interest rates
Money supply is the most important parameter in the economy and it tries to measure the abundance of money or the scarcity of money. Money supply is generally the amount of money in circulation. It provides the purchasing powers of commodities in the economy. When the money supply is high the stock prices are high and when the money supply is low the stock prices are low. Interest rates are affected by money supply, increase in money supply reduces the interests’ rates and this makes investment favorable. When money supply is high the investment in stocks is high because of the reduced interest rates.
2. Inflation rates and oil prices
Inflation increases the money circulation and this makes the interest rates decrease and this favors the engagement in the stock markets. Oil prices have some correlation with the stock markets. When prices of crude oil increase money in its refinery and this reduces the money available for stock market investment. GUCC member countries are oil producing countries and changes in prices of refining crude oil makes them spend more money in refining. Oil costs influence macroeconomic variables of nations, they are vital determinants of securities exchange return.
3. Political instability
Political instability provides an environment that is not conducive for business activities to be undertaken, this makes involvement in stock market not convenient. When their political stability there is room for stock market participation.
GUCC deals with the exchange of securities among other duties. It checks how different factors affect the stock market and how they can be mitigated.

References
Hammoudeh, S., and Choi, K. (2005). Characteristics of the permanent and transitory returns
in the oil-sensitive emerging stock markets: the case of the GCC Countries. Drexel University,Philadelphia, Unpublished working paper.
Hammoudeh, S., Ewing, B., and Zhao, G. (2003). Oil and natural gas sensitivity, asymmetry,
systematic risk and skewness in the Russian stock market. Working paper, Drexel University,Philadelphia, PA.
King M., and S. Wadhwani. (1994). Volatility and links between national stock markets.
Econometrica, Vol. 62/4, pp. 901–33.
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