"There is a strong historical correlation between the performance of the Saudi stock market, oil prices...

"There is a strong historical correlation between the performance of the Saudi stock market, oil prices and global financial markets."

1- Discuss in detail how accurate this link is?

2- What is your personal assessment of the financial market situation in the Kingdom?

Expert Solution

Ans-

•The oil prices and prices of shares and securities in stock market are going in the same direction.
•It means both are increasing continuously so the performance of both are affected to both oil market and foreign exchange market.
•There is a strong historical correlation between stock market,oil prices and global financial market.

1] This link is accurate because when the prices of oil increases in Saudi, which is a major oil exporting country; The export price of oil they charge is so costly for importing country that much foreign exchange reserve is spending in importing of oil and the effect of that share and security prices in Saudi also increases simultaneously and it creates much impact in global financial market.

2] Financial market situation in United Kingdom is uncertain due to fluctuations in prices of securities and investments. Prices are not determined accurately due to improper situation by disasters.

Rahul Sunny answered 8 months ago

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