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National Research University Higher School of EconomicsStudent ThesesChange in the Capitalization of the Largest Oil Companies under Oil Prices Falling Conditions

Student
Title
Supervisor
Faculty
Educational Programme
Final Grade
Year of Graduation
Evgeniy Busygin
Change in the Capitalization of the Largest Oil Companies under Oil Prices Falling Conditions
World Economy
(Master’s programme)
9
2017
Evaluation of the company's capitalization is a key factor in the investment decision making process. In order to make a qualitative assessment, it is necessary to take into account the fundamental factors that influence stock prices. The problem of assessing the capitalization of oil companies is quite urgent now, when oil prices have significantly fallen since 2014, that decline have made a serious impact on the shares of these companies.

The decline in the DJ US Oil & Gas Index from August 2014 to February 2016 was 43%. Many funds that held shares of oil companies suffered from serious losses: Einhorn's fund recorded a loss of 12% in 2014, Icahn's fund - 22% at the end of 2014.

The purpose of the work is to identify a system of factors that influence the market value of the largest oil companies; comparison of the theoretical approaches, hypotheses and actual (statistical) indicators. The goal is achieved by making a panel regression that will solve the following problems:

- assessment the impact of the sales profitability in upstream, downstream sectors on the market value of the largest oil companies;

- assessment the impact of M & A transactions on the share price of oil companies;

- assessment the impact of financial indicators (including return on equity, financial stability, etc.) on the share price.

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