How weather events in the UK may impact the share prices of UK energy companies in the stock market

Student, A. (2016) How weather events in the UK may impact the share prices of UK energy companies in the stock market. Undergraduate thesis, University of Chichester.

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Abstract

The aim of this research project was to asses if weather events in the UK have
an impact on the share prices of energy companies in the stock market, in order to
advise investors on when to buy and sell shares in the industry. This was done by
analysing the previous share prices of energy companies before and after the
announcements of weather events which took place in the past. The differences in
share prices before and after the announcements were then examined in order to
determine if these weather events had an impact on share prices in the past; and to
identify how the effects of different types of weather events differed.
Existing literature suggested that weather events did have an impact on the
share prices of energy companies. However, it also revealed that energy company
share prices are impacted by a number of factors, which would have made the
results somewhat limited. Some of these limitations were minimalised. Comparing
the behaviour of energy company share prices with those of the market in general
for example, helped to show whether share price behaviour was specific to the
energy industry or not.
The main findings of the research project were that, in accordance with the
literature, weather events do have an impact on energy company share prices. It was
discovered that snowy weather events caused the most positive effects on share
prices, and hot weather events caused the biggest decreases in share prices.
These results allowed the researcher to provide recommendations to
investors on when the best times to invest into the energy industry are, and when
the best times to sell shares in the industry are, in relation to weather events. The
results suggest that times of snowy weather seem to be the most beneficial times for
investors to sell their shares, as this is when they increase most significantly. In
contrast, times of hot weather and heavy rainfall/flooding seem to be the ideal times
to invest, as prices tend to drop.

Item Type: Thesis (Undergraduate)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Departments > Business School
Undergraduate Dissertations
Depositing User: Gail Graffham
Date Deposited: 13 Jan 2017 16:32
Last Modified: 13 Jan 2017 16:32
URI: http://eprints.chi.ac.uk/id/eprint/2421

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