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.

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