scholarly journals Impact of Industry-Specific Risk Factors on Stock Returns of the Malaysian Oil and Gas Industry in a Structural Break Environment

Mathematics ◽  
2022 ◽  
Vol 10 (2) ◽  
pp. 199
Author(s):  
Mohammad Enamul Hoque ◽  
Soo-Wah Low
Keyword(s):  
Risk Factors ◽  
Exchange Rate ◽  
Stock Returns ◽  
Oil And Gas ◽  
Structural Break ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Specific Risk ◽  
Gas Price ◽  
Industry Risk

This study examines the impact of industry-specific risk factors such as oil price, gas price, and exchange rate on stock returns of Malaysian oil and gas firms in a structural break environment by employing the break least square approach of Bai and Perron (1998, 2003). Existing studies fall short of providing such empirical evidence. The results document evidence of structural breaks in the relationship between industry risk factors and the stock returns of the oil and gas industry. Industry-specific risk factors are shown to significantly affect the stock returns of oil and gas industry sub-sectors alongside market-based risk factors. The results reveal that the beta values of oil price, gas price, and exchange rate vary across sub-periods hence confirming that exposure of oil and gas stocks to industry risk factors varies over time and across sub-periods. The effects of oil, gas, and exchange rate risk factors also differ across the sub-industry, with impacts and directions largely dependent on the core business activities of the oil and gas sub-industries. The empirical results offer implications for asset managers and investors.

scholarly journals Do Oil and Gas Risk Factors Matter in the Malaysian Oil and Gas Industry? A Fama-MacBeth Two Stage Panel Regression Approach

Energies ◽  
2020 ◽  
Vol 13 (5) ◽  
pp. 1154 ◽  
Author(s):  
Mohmmad Enamul Hoque ◽  
Soo Wah Low ◽  
Mohd Azlan Shah Zaidi
Keyword(s):  
Risk Factors ◽  
Exchange Rate ◽  
Risk Premium ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Oil Price ◽  
Panel Regression ◽  
Gas Industry ◽  
Systematic Risk Factors ◽  
Gas Price

This study examines whether oil and gas risk factors are priced in the returns of Malaysian oil and gas stocks employing asset pricing model with improved version of Fama-MacBeth two-stage panel regression. The findings reveal that oil price risk, gas price risk, and exchange rate risk are priced factors in the returns of oil and gas stocks, alongside market-based risk factors. Oil price, gas price and exchange rate factors are found to be associated with positive risk premium implying that they are systematic risk factors in the Malaysian oil and gas industry. Investors demand compensation for exposure to changes in oil price, gas price and exchange rate, implying that the risk cannot be eliminated through diversification. The risk premium for common systematic risk factors such as market, book-to-market, and momentum factors are found to be negative. The results suggest that in the Malaysian oil and gas industry, momentum driven strategy produces negative returns and investors receive higher returns from investing in growth oriented oil and gas stocks. Our results offer implications for asset pricing and portfolio management.

scholarly journals Industry Risk Factors and Stock Returns of Malaysian Oil and Gas Industry: A New Look with Mean Semi-Variance Asset Pricing Framework

Mathematics ◽  
2020 ◽  
Vol 8 (10) ◽  
pp. 1732
Author(s):  
Mohammad Enamul Hoque ◽  
Soo-Wah Low
Keyword(s):  
Risk Factors ◽  
Risk Factor ◽  
Exchange Rate ◽  
Asset Pricing ◽  
Stock Returns ◽  
Oil And Gas ◽  
Negative Relationship ◽  
Downside Risk ◽  
Total Risk ◽  
Pricing Framework

This study employs a mean semi-variance asset pricing framework to examine the influence of risk factors on stock returns of oil and gas companies. This study also examines how downside risk is priced in stock performance. The time-series estimations expose that market, size, momentum, oil, gas, and exchange rate have significant impacts on oil and gas stock returns, but effects are heterogeneous depending on an individual stock. The two-stage cross-section estimations provide new insights about investors’ risk-return trade-off when facing downside risks. The results show that downside risk exposures to market, momentum, oil, and exchange rate factors are negatively priced in the Malaysian oil and gas stocks. This implies that investors are penalized for their downside exposure to these risk factors, and such inference is consistent with the risk preference explanation of prospect theory. Liquefied natural gas (LNG) is the only risk factor found to be positively priced in the returns of oil and gas stocks. Additionally, we find a negative relationship between LNG factor and total risk. This suggests that as the risk exposure to LNG increases, the total risk decreases, implying that the LNG risk factor is an idiosyncratic risk and not a systematic risk factor. Such interpretation is consistent with the correlation result, which shows no association between LNG and the market risk factor.

scholarly journals The Effects of Oil and Gas Risk Factors on Malaysian Oil and Gas Stock Returns: Do They Vary?

Energies ◽  
2020 ◽  
Vol 13 (15) ◽  
pp. 3901 ◽  
Author(s):  
Mohammad Enamul Hoque ◽  
Soo-Wah Low ◽  
Mohd Azlan Shah Zaidi
Keyword(s):  
Risk Factors ◽  
Stock Returns ◽  
Oil And Gas ◽  
Market Value ◽  
Negative Effects ◽  
Firm Level ◽  
Stock Size ◽  
Positive Effects ◽  
Oil And Gas Firms ◽  
Gas Price

This study explores Malaysian oil and gas stocks’ exposure to oil and gas risk factors, paying special attention to subindustry classification, stock size, book-to-market value, and volatility state. The study employs firm-level weekly frequency data of oil and gas firms and several multi-asset pricing models within a GARCH (1,1)-X and Markov-switching framework. The empirical findings reveal that oil price, gas price, and exchange rate exhibit positive effects on the stock returns of all oil and gas sub-industries, but they exhibit negative effects on gas utilities sub-industry stock returns. The empirical findings also reveal that the extent of this effect varies across sub-industry, stock size, book-to-market value, and volatility states. Thus, the findings suggest the existence of asymmetric, heterogeneous, and non-linear exposures.

scholarly journals International Oil Companies Sustainability after Oil Price decline

2017 ◽  
Vol 11 (1) ◽  
pp. 157-167
Author(s):  
Adrian D. Tantau ◽  
Mohammadreza Khorshidi ◽  
Ali Asghar Sadeghi Mojarad
Keyword(s):  
Business Models ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Green Energy ◽  
Gas Industry ◽  
Oil Companies ◽  
Market Situation ◽  
Important Challenge ◽  
Gas Price ◽  
Sustainability Report

Abstract International Oil Companies (IOC’s) had been playing a major role in oil industry at the beginning of 20th century. They had many volatility during last century and faced with many obstacles which forced them to change their business models and improve their outcome to satisfy their shareholders. One of the most important challenges was oil nationalization in oil producer countries which were happened by establishment of NOCs. Later green energy issue which came from CO2 emission problem happened and recently, oil and gas price diminish challenges, involve all IOCs with the most important challenge in last century after all. Among all those events, one of the most important key values which have been observed by IPIECA, API and IOGP associations every year is Sustainability. The objectives of the research are study all issues and indicators of sustainability in IOCs. Each indicator has faced with different strategy via IOCs in different market situation. The importance of this key value cause that it is observed by some important association like IPIECA, API and IOGP each year. As the scarcity of related references for business model in oil and gas industry, literature review of some resources and annual sustainability report followed by a questionnaire as a survey are also selected methods for recent major challenges to achieve required result.

scholarly journals THE ROLE OF MONETARY AND FISCAL FACTOR IN THE FORMATION OF INCOMES FROM THE OIL AND GAS INDUSTRY OF RUSSIA

2019 ◽  
Vol 2 (5) ◽  
pp. 184-189
Author(s):  
Anna Komarova
Keyword(s):  
Exchange Rate ◽  
Russian Federation ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
The Russian Federation ◽  
The Impact

This research assesses the impact of monetary (exchange rate) and fiscal factors (oil and gas taxes, MET on oil) on the dynamics of revenues of the oil and gas industry of the Russian Federation.

scholarly journals Risk Management in Oil and Gas (EPC) Industry

2021 ◽  
Vol 9 (9) ◽  
pp. 1255-1264
Author(s):  
Prashant Pralhad Kadam
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Oil And Gas ◽  
Safety Management ◽  
Management Strategies ◽  
Oil And Gas Industry ◽  
Construction Costs ◽  
Defective Items ◽  
Gas Industry ◽  
Risk Management Strategies

Abstract: The five most important risk factors identified in the design phase are 1] scope uncertainty, 2] failed management and planning, 3] changes in errors and omissions, 4] inadequate projectS team structure, 5] inadequate quality requirements. The top five risk factors determined by the procurement category are 1] Inadequate online resources and equipment, 2] Distribution of suppliers, 3] Uncertainty in design and style, codes, requirements and standards, 4] Defective items, and 5] Compromise. The 5 most important risk factors identified in the construction phase are 1] weak project capability, 2] excessive construction costs, 3] major construction delays, 4] strong project plan, and 5] poor safety management .This was initiated by the link between risk factors and the effects on price, quality and timing, as well as the potential for expensive, common, and high-quality outcomes. Keywords: Disaster risk management, risk management strategies, project risk management, oil and gas industry.

RISK FACTORS FOR THE DEVELOPMENT OF DISEASES OF THE CIRCULATORY SYSTEM IN EMPLOYEES OF THE OIL AND GAS INDUSTRY AND THE MAIN PRINCIPLES THEIR MINIMIZATION

2021 ◽  
Author(s):  
V.E. Bulanov ◽  
◽  
N.I. Simonova ◽  
Keyword(s):  
Risk Factors ◽  
Arterial Hypertension ◽  
Oil And Gas ◽  
Healthy Lifestyle ◽  
Circulatory System ◽  
Oil And Gas Industry ◽  
Prevention Programs ◽  
Gas Industry

Abstract: The prevalence of risk factors for the development of diseases of the circulatory system in 1452 employees of the organization of the oil and gas holding was studied. A high (up to 97%) prevalence of the main risk factors, as well as diseases of the circulatory system, mainly arterial hypertension, was established. The necessity of developing comprehensive prevention programs, which include measures to improve the health of employees and the formation of a healthy lifestyle in them, is shown

Theoretical review on critical risk factors in oil and gas construction projects in Yemen

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mukhtar A Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Risk Factor ◽  
Literature Review ◽  
Construction Projects ◽  
Oil And Gas ◽  
Project Success ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Content Type ◽  
Oil And Gas Sector

PurposeThe oil and gas construction projects are affected negatively by the drop in oil price in recent years. Thus, most engineering, procurement and construction (EPC) companies are opting to optimize the project mainly to mitigate the source of risks in construction to achieve the project expectation. Risk factors cause a threat to the project objectives regarding time, cost and quality. It is additionally a vital component in deviating from the client's expectation of productivity, safety and standards. This research aims to investigate the causes of risk in the oil and gas construction projects in Yemen.Design/methodology/approachA comprehensive literature review from various sources including books, conference proceedings, the Internet project management journals and oil and gas industry journals was conducted to achieve the objectives of this study. This initial work was predicated strictly on a literature review and the judgments of experts to develop the risk factor framework for the oil and gas construction projects in Yemen.FindingsThe authors found a few studies related to risk factors in oil and gas construction projects and shared a similar view about general construction projects. However, only a fraction of the factors accepted have included the variances of other studies on a regional basis or specific countries, such as the Yemen situation, due to the differences between the general construction industry and oil and gas industry. Moreover, the factors of these attributes were still accepted due to their applicability to the oil and gas industry, and no significant variances existed between countries. Research has indicated that 51 critical factors cause risks in the oil and gas construction projects in Yemen. Such risk factors can be divided into two major groups: (1) internal risk factors, including seven critical sources of risks, namely client, contractor, consultant, feasibility study and design, tendering and contract, resources and material supply and project management; and (2) external risk factors, including six sources of critical risk factors, namely national economic, political risk, local people, environment and safety, security risk and force-majeure-related risk factors. A risk factor framework was developed to identify the critical risk factors in the oil and gas construction projects in Yemen.Research limitations/implicationsThis research was limited to the oil and gas construction projects.Practical implicationsPractically, this study highlights the risk factors that cause a negative effect on the success of oil and gas construction projects in Yemen. The identification of these factors is the first step in the risk management process to develop strategic responses for risks and enhance the chances of project success.Social implicationsThe identification of risks factors that cause the failure of construction projects helps develop response strategies for these risks, thereby increasing the chances of project success reflected in the oil and gas sector, which is a main tributary of the national economy in developing countries.Originality/valueThis research is the pioneer for future investigations into this vital economic sector. Given the lack of resources and studies in the field of construction projects for the Yemeni oil and gas sector, the Yemeni government, oil companies and researchers in this field are expected to benefit from the results of this study. The critical risk factors specific to the oil and gas construction projects in Yemen should be further investigated with focus only on Yemen and its oil and gas industry players.

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