Research On The Impact Of RMB Exchange Rate And International Oil Price Fluctuation On Stock Prices Of Listed Airlines In China

After the reform of RMB exchange rate regime, the RMB is not only greatlyappreciated, but also showing a two-way volatility characteristic. Since Chinabecame a net oil importer in1993, the rapid development of the domesticeconomyresults in imbalance between oil supply and demand. Meanwhile,oil imports graduallyrose year after year and the dependenceof foreignoilbecame deeper. With the deepening of reform in China’s stock market,stock index futures and financing business has been launched. These changesenhance the effectiveness of the stock market and improve the degree offinancial markets. The impact of exchange rate and energy marketsincreasingly cannot be ignored on China’s stock market.China’s economic developmentincrease demand for resident travelling,business contacts, public demand for air trade. The development also promoteChina’s air transport industry. Due to the specificity of Chinese airlinecompanies’ business development, which is deeply influenced by the foreignexchange market and the the energy market. Fluctuations in the RMBexchange rate will generate foreign exchange gains and losses, fluctuations ininternational oil prices will affect operating costs. However, will thefluctuation of RMB exchange rate and international oil prices affect thefundamentals of China’s listed airline and business performance? If thefactors have an impact, what path their impact is? Does these can affectairlinestockprices?This paper firstly discusses the impact of the RMB exchange rateandinternational oil price fluctuations on the listed airline companiesand itsshares price by using qualitative analysis and quantitative analysis methods.Secondly, the author will usingeconometric models, through ADF stationarytest, cointegration test, Granger causality test, VEC model and the impulseresponse function analyzingthe impact of RMB exchange rate and international oil price fluctuations on behalf ofSHENWAN Air TransportIndex. Finally, according to research findings, combined with the specificconditions of China’s listed airlines, givingsome feasible policyrecommendations on how to prevent exchange rate risk and oil price risk.