IMPACT OF INTEREST RATE ON STOCK MARKET IN KINGDOM OF SAUDI ARABIA

Abstract

Investment is regarded to have a substantial role to play for the stock market in developing its growth and stock returns. Nevertheless, this impact was not apparent in the general stock market index in Saudi Arabia. Thus, this work has analyzed the impact of investment on the stock market in Saudi Arabia. In this work, the impact of investment on the financial stock market in Saudi Arabia during the period of 1985 to 2013 was examined.  This work was done based on quantitative method. This study was carried out in two parts. The first part comprised of analyzing previous stock market data from the period of 1985 to 2013. The second part comprised of survey analysis. For the survey analysis, the sample population consisted of 50 representatives of the bank division in Saudi Arabia.  Questionnaire was utilized as a medium for data collection.  The findings of this work have shown that there is a positive relationship between investment and the stock market in Saudi Arabia. Furthermore, the findings have shown that stock markets are also affected by loans.