The impact of macro economic factors on the stock Prices: a case study of Kuwait

Abstract

1. examine the impact of the macro economic variables on the stock prices in Kuwait, and 2. build a forecasting model for the stock prices in Kuwait. Ordinary least squares regression analysis has been used to examine this relationship. The results confirm that there is a significant relationship between stock prices and some macro economic variables such as government expenditure, sight deposits, oil revenues, $ /KD exchange rate. Ml and M2.The results for the relationship between money supply and stock prices in Kuwait, indicate that this relationship in Kuwait is similar to that in any other country where stock prices increase as a result of an increase in the money supply. Also, the results show that the best forecasting model for stock prices in Kuwaitis the random walk model. Finally, some recommendations for re-organizing and strengthening the stock market in Kuwait are presented for consideration by the government of Kuwait. [math mode missing closing $]