Evaluating The Effects Of Price Fluctuations On Performance Of Oil And Gas Companies

One of the supportive policy that is applied to reduce investment risk on the stock exchange, is fluctuation limitation law. Proponents of this law argue that enforcing this law has reduced the volatility of the stock price and prevents excessive reaction shareholders. In this paper, the impact of regulation and loose constraints on the performance of oil and gas companies of the two aspects: (1) delays in reaching the actual price and (2) its impact on investors overreaction were investigated. Statistical tests showed that law of price limit by creating delays in reaching equilibrium price of its shares has delivered continued price change to next days. According to GARCH-M model results to consider the conditional volatility, we are seeing a decline in the performance of oil and gas companies after the swing limit law.