Sunday, March 15, 2020
World Stock Market Essays
World Stock Market Essays World Stock Market Essay World Stock Market Essay 1.        What has happened to the main World Stock Markets during this week? Give     brief reasons for the main stock market movements in the United States, UK,   Europe and Japan.The world of finance has a very strong tendency to fluctuate at slightest of the changes to major world currencies. The same behavior was observed in first week of March’07 beginning on 5th of the month. The market opened with strong yen and hence depreciated dollar, euro and other major currencies (Dennis, 2007). The US dollar showed a slump of 1.2 percent with one dollar yielding Y115.43. Euro also slumped to Y151.57 with yen gaining strength the global equity market. The stock markets all around the world showed a steep fall. Tokyo Nikkei225 fell to 16,642.25 and observed one of the biggest single-day losses for the current financial year and lost up to 3.3 percent.  Similar fall was observed in almost all major exchanges of Asia with Hong Kong’s Hang Sang Index leading the chart. This exchange suffered one of the highest single day losses of the history with index losing almost 4 percent. Major           exchange of Singapore, Taiwan and India also observed a fall of 3.1percent, 3.7 percent and 3.7 percent respectively. European stocks responded in the same manner following the fall of Asian markets. The major mining corporations and banks were the biggest loser and London’s FTSE 100 lost around 1.2 percent and slide to 6,043.5.us market losses were a bit mild and Dow Jones Industrial average shed 0.2 percent and at the same time NASDAQ composite lost 0.8 percent (Dennis, 2007). So stock market in almost all major industrial as well developing nations saw a fall. The rise of Yen caused major loss of wealth of investors both retail as well as institutional investors losing a considerable amount of money.But the global financial market continued to show its e rratic behavior and as a surprise for everyone, it calmed on the very next day. Though equities market gave varying results, the currency and bond markets got stabilized to a larger extent. The market surveyors had paused and very much unsure of how is it going to react now. The release of critical US employment data could be released on the very next day and the report will have its own effect on the performance of the markets comprising of equity as well as bonds and securities.On March 06, 2007, world equity market showed remarkable recovery and staged a rally with the end of yen’s rise (Shellock, 2007).The fastest among all were Asian stocks with Nikkei 225 in Tokyo ended 1.2 percent higher. This rise was mainly due to yen weakness and recovery observed in some sectors hence this gain was achieved after a five session losing streak. Other major markets which recorded a gain of 2 percent or more were Hong Kong, Seoul, Sydney, Mumbai and Shanghai European and us stocks also followed the same trend with new York’s NASDAQ composite saw a gain of 1.7 percent and the Dow Jones industrial average increased by 1.5 percent and Brazilian Bovespa index was 3.2 percent higher. In the end its was the end it’s was the recovery made by dollar and euro gains yen caused the improvement (Shellock, 2007).2.        Briefly discuss the main developments in the foreign exchange markets and the  interest rates. Include references to the performance of the sterling and levels of            interest rates at home and abroad. Discuss developments and forecasts.Changes in the interest rate of different during the week starting 5 marches’07   and ending on 10 March’07, made by different national central banks played on      important role in the foreign exchange markets. Market performances also  become a reason behind speculation of internet rate hike U.K. re tail sector saw 5.6            percent growth causing 0.3% rise in sterling (Shellock, 2007). The sterling rise   kept forwarded another case to bank of England to raise U.K. interest hike.     Japanese’ yen’s rapid            rise caused the face in almost all major exchanges of the          world. Japanese investor preferred to invest abroad for better return. With japans            interest rate at just 0.5 percent, investors’ interest in overseas market got a         overshoot. But the very next day, yen’s lost its momentum and the market          showed some recovery, with           European shared showing better performance. at the          end of last session on march            07, the previous forecast of bank of England raising           its benchmark rate become untrue and rate of interest remained at 5.25%.but     European central bank as suggested in a new forecast, was expected to raise   its benchmark interest rate by 25bp taking the rate to 3.75% so, the market          trend suggests the lower risk appetite among investors and even a minor rise of        25 bp by a national central banks keeps the investors within the country (Dennis,         2007).3.        Look at the section that lists all new international bond issues each day (Company         and Markets Section). Discuss a few examples of major bond issues that were  launched this week. Highlight any special features of these bond issues.The week of March 5-9 2007, was abuzz with issue of a number of international bond each day with total number expanding to 42. out of 42 international bonds          25 were issued in euro with republic of France issuing bonds of worth 4 billion       euro with maturity in 2040.other major euro bonds were of the value 2 billion by      Daimler Chrysler 1.2 billion each by ATT and Commerzbank and santanfer            insurance issued a bonds of the value 11.5 billion euros with maturity in march  2017. ATT also raised almost 600 pound sterling with maturity in march 2027.     similarly Deutsche bank raised 22 billion yen on floating rate note with maturity        in march 2012and 38 billion yen again with maturity in march2012. Deutsche           bank also raised around 150 million Swiss France with maturity in October 2011.  US dollar international bond were issued by only two borrowers with JBIC being           the first and the value 750 million and maturity in march 2012 and Pusan Bank of      South Korea issued international bonds of value 200 million with maturity in            march 2017.4.        Choose any article in the FT this week that relates to the role of the IMF or the   World Bank and provide a short explanation of the key aspects of the article.The financial Times on March 02,07 published an article â€Å"The Economy need to            damp demand and boost investment†  by Christopher condom giving details of a           robust performance of Romanian Economy .it joined the European Union and           double digit growth in wages with rapidly increasing purchasing power of  common Romanian Public fuelin g massive growth in demand. the later pact of the            article took a condition note of the above cautious note of the above mentioned growth with an IMF mission using Romania’s Central Bank and government to            make some change in Monitory and fiscal policy of the nation so that rising     demands caused (Condon, 2007).The article has talked massive foreign direct investment and remittance from      Romanians settled abroad thereby strengthening the Romanian currency against        the Euro and making the Import a cheap proposition. Romanian investment sector    is abuzz with several investors namely Ikeas, a Swedish furniture retailer, Selgros         and Tengelman of France. The year 2006 saw an influx of almost 9bn euro in     form of foreign direct investment and out of these almost 15 per cent went to retail      and other trading operations. The new picture depicts the economy as more of    shop oriented and the country is more like a shopping hub instead of a technology         and manufacturing and service oriented. The approach economists have suggested       actually concentrates on heavy investment in manufacturing sector with the use of         new technology. The focus should be more on new age factories with proper  impetus being given on service sector and employment generating options like       BPOs and call centers. The country should be viewed more as an export hub           rather than a centre for market places. The productivity gains need to be kept in            the same zone where the current state of wages are while harassing the benefits of          cheap but productive labor. The investment in that form is arriving like the one       from Microsoft. The newly created customer support facility is expected to       provide employment to more than 100 people. This sort of investment will          actually create a new class of work force who are not only technically sound but also fit            enough to work in an environment best suited for the current information            based economy (Condon, 2007)..           But the higher demand had been referred as a matter of concern and has a           capability to widen the current account and will provide the declination of       inflation an opposite thrust. IMF also approved the government is plan of higher            p ublic sector wage and reiterated the government to reduce demand and boost the        new status of investment (Condon, 2007)..5.        Look at the developments and news in the transport sector and prepare an           informative and concise briefing for the manager including a reflective analysis.Financial Times published a number of articles related to transport sector in the  week March 05 -09’ 2007. An article published March 05 talked about David   Miliband’s call for Emission reduction in the transport sector. He suggested the    inclusion of Road Rail Transport in European Union’s Emission Trading          Scheme after 2012. Being the environment Secretary, he cited Sweden as an       example that UK should follow (Hall, 2007).The Geneva Motor show was abuzz with emission issue. a report by John Reed  gav e a detailed information of different concepts car based on Bio Ethanol Fuel.  Several prominent Vehicles manufactures displayed their Hybrid Concepts      Sports car. Honda, Toyota BMW are some of the reputed names working in     this directions, Green commercial vehicles were also given complete coverage   with ENOVA System leading the chart (Reed, 2007).Another report published on March 06 talked of the processes involving  liberalization of Trans Atlantic Aviation. The talks for the same was making        round for the last four Years. And now after getting positive responses from Both           British Airways Virgin Atlantic, US negotiator John Byerly called this treaty        as a Cash generating Machine for the above mentioned carriers  the deal is now            waiting for the approval by European Union Transp ort Ministers (FT., 2007).Under world news section, financial Times published a report aim aviation sector           woes in Indonesia. On March 10 2007, reported by John Aglionby, the article      talked about divided Expert opinions on safety factor in aviation sector in         Indonesian Domestic region. In an exclusive interview to financial times           Indonesia Transport Minister Hatta Rajassa showed his concern in the rising            number of accidents among Indonesian domestic flights .the article also  mentioned about the experts who are lamenting on faulty safety norms by          Domestic carriers (Aglionby, 2007).A report published on March 10, 2007 mention of the rising sales of new cars in Iran. The country is normally in news for its verbal conflicts with US on issues            related to U.S. policies on Iraq and the rising nuclear capability of Iran. The report has talked of the competition between the two international car manufacturers in        Iran’s domestic car market. The French carmaker the Renault started the pre-salesof Tondar-90 which is actually a locally manufactured version of an older model            of Renault’s Romanian subsidiary production named Logan. The Iranian car    market is normally dominated by Iran’s top two car-makes namely Khodro and  Saipa with a market share of almost 60 percent. Renault is very much eager to          lead the Iranian car market and is very much depending on low fuel price in Iran            as a reason for growing sales of cars. The company is investing a good amount of     money in developing facilities for developing car s and other vehicles for sale in local market (Bozorgmehr, 2007).ReferencesAglionby, J (2007, March 10). WORLD NEWS: Experts divided on aviation sector woes          in Indonesia [online] Available from: http://ft.comBozorgmehr, N. (2007, March 10) WORLD NEWS: Sales of new Iranian car soar, sight unseen[online] Available from: http://ft.comCondon, C. (2007, March 02). THE ECONOMY: Need to damp demand and boost         investment [online] Available from: http://ft.comDennis, N. (2007, March 05). Global equities slide as yen extends gains[online] Available from: http://ft.comFT. (2007, March 06). The Heathrow cash machine is coming up for grabs[online] Available from: http://ft.comShellock, D. (2007, March 07). FT MARKETS: Tentative rally marks the end ofyens rise [online] Available from: http://ft.comTurner, D. (2007, March 07). Tokyo stocks fall on concerns over US[online] Available from: http://ft.comHall, B. (2007, March 05). NA TIONAL NEWS: Miliband calls for a post-oil erainvestment [online] Available from: http://ft.comReed, J. (2007, March 06). FT REPORT MOTOR INDUSTRY: Fleets may usher in sea-          change [online] Available from: http://ft.com
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