abstract - reviewed

8/13/2019 Abstract - Reviewed

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The Impact of Energy Crises on the Textile Sector of

Pakistan (2005-2010)

Textile industry of Pakistan has been most adversely affected by the energy crisis hence

affecting the exports and international investments in the textile sector. To study the impact of

energy crisis on the textile industry, the years under consideration have been divided into two

time periods i.e 2005-2007 which is the time period before crisis and 2007-2010 represents the

time period after energy crisis. The hypothesis to be tested is the performance of the textile

sector has declined after energy crisis. To test the hypothesis, secondary data was collected

from 1) annual reports of textile firms that had been chosen randomly as a sample 2) The

financial statement analysis report of State Bank of Pakistan (SBP). Ratio analysis was

conducted for each of the firm and their average of taken as industry average. Horizontal

analysis of profitability ratios, liquidity ratios, solvency ratios and turnover ratios was analyzedwhich supported the hypothesis being tested and hence it was concluded that the performance

of the textile sector has declined from 2007-2010. The paper only confirms that a relationship

exists between energy crisis and the textile sector and its direction is negative. However, the

intensity of their impact was not measured.

Problem Statement

Among many factors that directly impact stock prices, our area of research is whether energy

crisis can be regarded as one of the key determinant of fluctuation in stock market of Pakistan.

Why this Research is Worthwhile to Conduct

Many researches have been conducted that link energy crisis with profitability of different

industries in Pakistan like food industry, textile industry, etc. but such researches are limited to

determining the analysis regarding its economic aspect. But no formal research is done to

directly link the impact of energy crisis has on KSE index as a whole. So our research is primary

research and conducted with the intention to measure this impact as well as to determine that

to what extent, this crisis have led to fluctuations in stock prices in Pakistan.

This research will appeal to a wide range of individuals and groups especially investors who

have invested their money in trading securities. Other potential beneficiaries and users of this

research can be government because they apply legislations according to prevailing stock

market conditions, general public as they are interested in buying shares of companies,

potential new entrants and investors, and different companies as well.

Many factors are responsible for creating fluctuations in stock market which includes political

instability, business conditions, market psychology, supply and demand of shares, crisis in a

Comment [h1]: I think this is here by

This was an abstract of one of the studies

conducted.

Comment [h2]: Good start. Please try

or rephrase this to make it sound more r

oriented. WHETHER there is a connectio

the two and HOW much of a connection

two different things. Do not limit the sco

form an overall broad general statementexplains what is this project/research ab


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country, inflation and deflation, etc. But primary focus of our research is to quantify the impact

caused by energy crisis on the stock market and conducted with the intent to provide sufficientknowledge and deep understanding of this impact.

If we are going to list down major and potential factors that causes stock market to fluctuate

badly then we will see through our research that whether energy crisis comes in these major

factors or it has just minimal impact on KSE and further we are going to analyze that to what

extent, electricity and gas crisis can impact stock prices in Pakistan.

Major focus of our research is to analyze this impact as well as to determine the appropriate

methodology to determine the level of this impact.

A Brief Overview of the Paper

As mentioned earlier, since its a primary research no direct articles or literature review exists

which measures the impact energy crisis has on stock prices of companies in Pakistan. Our

research therefore intends to fill this gap by conducting theoretical paper in this area from FY-

2007 to 2013.

We intend on carrying out our research on two prime variables, energy crisis being our

independent variable which takes into account the electricity and gas shortfalls. While stock

market will be our dependent variable and KSE 100 will be the barometer for market behavior

pertaining to the stock prices. The fluctuations in the energy shortfalls will be measured against

the changes in KSE 100 index on semi-annual basis. We will study the impact of stock market as

a well as its effect on the individual sectors in the stock market. Regression, co relational and t-

test analysis will be used to measure the direction and to quantify the impact energy crisis hason stock market.

Our research will be using a number of public sources for data collection purposes to ensure its

authenticity. This includes Federal Bureau of Statistics of Pakistan (including figures from

WAPDA, KESC, KANUPP, CHASNUPP and other private undertakings such as KAPCO and

HUBCO), Pakistan Energy Handbook, Pakistan Economic Survey, Economic Indicators of

Pakistan issued by State Bank of Pakistan and website and information available from the site of

KSE itself.

General Feedback:

Good start.

Comment [h3]: Primary research doe

on slightly different but related topics.

Comment [h4]: Define the regions th

take for the purpose of measuring the cr

the shortage affected different regions d

Comment [h5]: Why semi-annual?? W

monthly or annual or weekly or daily?? J

basis.

Comment [h6]: Form a hypothesis ofsectors are more affected and which one

Comment [h7]: Have you consulted t

resources? Is the data easily available?


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Try to define your methodology more precisely. Think of some research models, factors and

variables that you can think of.

We dont only need to find a link between crisis and performance, we also need to precisely

measure the link in isolation from other factors. So try to think more on how can we better

explore the data we will get. Create a few hypothesis scenarios and then we can test them and

see if they hold or not and why..

Things to focus on

1. Limitations of your researcha. Data availabilityb. Scope (i.e. you cannot pinpoint the precise changes in the stock market and

isolate the factors affecting the market (govt policies, terrorism, company

financial performance, global recession etc).

c. More limitations2. Problem statement is a good start, but it needs to be a bit more comprehensive. It feels

limited to only exploring a link, but we want to do so much more than just find a link, we

need to look at what why and how etc..

3. Title of the project. Should summarize everything

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at: 0.5"

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