Indonesia which is one of the oil suppliers receive a great impact in relation with the conflict that happen in Libya. The riot that happens in Libya start to spread up to the other country in the middle east, this incident really boost the price of the oil and straighten the Indonesian Rupiah for a while. in addition, reduced oil supplies from Libya and the prospect of a popular uprising spread in the energy-rich Middle East, has made the world oil prices increased to the highest record on wednesday since 2 years ago. Furthermore, in London and New York the price of the oil is reaching into 100 dollar Us per barrel that never happen since 2008. The increase of the oil price happens due to panicking from the oil suppliers in concern with the accident that happens in Libya.
In relation with Indonesia, they might be no impact in the short-term economics due to straighten in Indonesian Rupiah. Since this tragedy happens the price of rupiah is increase from Rp8875.00 to Rp8845.00 on 28 February 2011. According to Indonesian Secretary of the Treasury Agus DW Martowadojo they might be an increase of the price of Indonesian oil from 80 dollars US per barrel into 83 dollars US per barrel. In addition, he also stated that if the price of the oil keep increasing there might be also increase in the subsidize of the oil in Indonesia.
While in my opinion, if the price of the oil keep increasing from time to time and the Libya government could not handle their internal problem there might another global crisis happens. Even though we are an oil suppliers, Indonesia has more than 100 millions people that using oil and in certain circumstances for sure we are still import some oil in order to cover the demand of the country. Hence, it will also impact to the import goods to indonesia that will boost the price of the imported goods and also there might be and inflation that happens in indonesia. In relation with that, the Indonesian government really monitor on the price of the oil each and every second intended when the price of the oil boosting up again. More importantly, most of the imported and exported goods is really depending on US dollars when there is an increase or decrease in of the price of US dollars it does really matter to the internal economics problems in Indonesia.
Sunday, 27 February 2011
Sunday, 20 February 2011
Raising Finance for L&T Infrastructure
Most of the international company are having a difficulty in funding their finance in order to operate their company. During this fourth week the lecture are explaining about the fundamental of raising finance for multinational enterprise, collaborative ventures & foreign subsidiaries. In addition, there are some objective through in learning this topic which are;
- Considering the idea that the method of financing and the cost of financing might have a consequence on the profitability of the company
- Introduce the basic concepts of equity finance and debt finance
- Examine the project finance as a method of financing a collaborative venture
- Discussing the strategic reasons why companies may decide to source equity capital internationally
- Identifying and discussing the international debt finance instruments
It is believe to say that by selling bonds or using debt financing rather than equity financing it is much more useful strategy in financing their company. By selling bonds this company will get a quiet a lot of money for their operation and not-like and investment that force the company to change their management structure but trough using this method the company will be working based on the management structure that they already form. Furthermore, despite the advantages of bonds that has a minimal of 5 years for the return but also bonds are usually form the company into much more liquid and therefor it helps the cash flow of L&T.
In conclusion, by having a good strategy in financing a company it eventually decrease the un-employent rate in India and hence it will improve the standard of living inside the country. Moreover, if the L&T Infrastructure projects works well it will develop the infrastructure in India and it might also attract more foreign investors.
Sunday, 13 February 2011
Learning the stock market and stock market efficiency is an important subject for finance student. Knowing what the triggers and how they move believed as decent knowledge for us. During this week we were study about stock exchange and how efficient is the stock market response.
During this third week we have learn a lot of reason how efficient is the reaction of the stock market and actually what I can conclude from this lecture is there is no such things you can predict the movement of the share price as it been supported by the random walks philosophy that Kendal stated.
In relation with that statement, i have relate our subject into a big news that has been a "trending topic" during this month which is the the effect on the price of the oil as Mubarak (President of Egypt) resign. Mubarak has become a president of Egypt for 30 years and people in Egypt do believe that during his leadership most of the people are really facing a bad economic problem.
As we all know that Egypt especially in Suez Canal is becoming the main source of oil, while during this month went there is a anti-government protest it is really affect the price of the oil and also force the share price movements of the international company is going down. it can be seen that
"US light sweet crude lost $1.12 (70p) to $85.61. In London, Brent crude fell 31 cents to $101.13. It had initially fallen further but pulled back" (BBC News, 2011), through evaluating at this statement it can be conclude that based on the economic issues that has been arising in world wide it is really affecting the share price of companies and also it is believed to say that the reaction of stock exchange can be consider as quiet effective. Since this news raised the oil price is automatically going up because the supply of the oil is decreasing and eventually the share price of most of the oil company especially the one that really dependable from Egypt is going down. Although most of people predict that there will be an increase the share price movements of the oil company but there is no exact prediction to this question. It might be some other issues that might rise will affect the share price of this oil company.
according to BBC today FTSE 100 suffer from a loss of 0.7% higher at 6,062.9 points, while the key French and German markets also enjoyed late surges because of this reason because of this issues. on the other hand, it is belived to say that Mr Mubarak's resignation had helped make Egypt's political future a little clearer, boosting investor sentiment. We can only predict what happen to the share price movement but the actual movements is walking randomly.
During this third week we have learn a lot of reason how efficient is the reaction of the stock market and actually what I can conclude from this lecture is there is no such things you can predict the movement of the share price as it been supported by the random walks philosophy that Kendal stated.
In relation with that statement, i have relate our subject into a big news that has been a "trending topic" during this month which is the the effect on the price of the oil as Mubarak (President of Egypt) resign. Mubarak has become a president of Egypt for 30 years and people in Egypt do believe that during his leadership most of the people are really facing a bad economic problem.
As we all know that Egypt especially in Suez Canal is becoming the main source of oil, while during this month went there is a anti-government protest it is really affect the price of the oil and also force the share price movements of the international company is going down. it can be seen that
"US light sweet crude lost $1.12 (70p) to $85.61. In London, Brent crude fell 31 cents to $101.13. It had initially fallen further but pulled back" (BBC News, 2011), through evaluating at this statement it can be conclude that based on the economic issues that has been arising in world wide it is really affecting the share price of companies and also it is believed to say that the reaction of stock exchange can be consider as quiet effective. Since this news raised the oil price is automatically going up because the supply of the oil is decreasing and eventually the share price of most of the oil company especially the one that really dependable from Egypt is going down. Although most of people predict that there will be an increase the share price movements of the oil company but there is no exact prediction to this question. It might be some other issues that might rise will affect the share price of this oil company.
according to BBC today FTSE 100 suffer from a loss of 0.7% higher at 6,062.9 points, while the key French and German markets also enjoyed late surges because of this reason because of this issues. on the other hand, it is belived to say that Mr Mubarak's resignation had helped make Egypt's political future a little clearer, boosting investor sentiment. We can only predict what happen to the share price movement but the actual movements is walking randomly.
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