Hsbc infrastructure company - Free Essay Example

Sample details Pages: 7 Words: 2043 Downloads: 3 Date added: 2017/06/26 Category Statistics Essay Did you like this example? HSBC Infrastructure Company The company in consideration is HSBC Infrastructure Company or HSBC Investments or known as HICL in the industry circuit. The company is a relatively new company in the sector and was launched on 29 March 2006. The company is basically dedicated to Private Finance initiative investments and is a part of FTSE 250 Index. It is headed by Mr. Graham Picken. It has a rare accomplishment of being the only infrastructure investment company to be listed on London Stock Exchange. Initially the company offered a portfolio of 15 infrastructure projects that had long term concessions based on source of revenues and availability based. The assets that the company holds are primarily operational with the portfolio comprising of 31 investments. The head-quarters of the company are in Guernsey, a British crown dependency located in the English Channel. To maintain and enhance the value of the company for the investors, the asset managers play a key role by actively participating in the management of projects. Regarding the value enhancement of the investment, it all depends on the performance of these projects and includes management of revenue opportunities, cost savings, financial efficiencies and treasury management. The group believes that it is practical to focus on every new investment opportunity with almost same revenue and risk associated comparable to the existing portfolio. Below, the chart shows the performance of the company in the stock market since i ts opening in March 2006. Don’t waste time! Our writers will create an original "Hsbc infrastructure company" essay for you Create order YIELD CURVE ANALYSIS A yield curve is a curve that represents a relationship between maturity of coupon bearing bonds and their yield to maturity. This means that it depicts the yields that are obtainable in relation to various bonds, bills or notes on their maturity. (Grandville, 2001) Generally, these curves are upward sloping as the investors who invest for short period have a safe investment against that of a long term investor who has to face a world full of uncertainties for quite a lot of time. Thus, they are offered risk premiums so as to persuade them to invest for long time. (Vanhorne Wackowicz, 2008) Depending upon the behavior of the market, the central banks and the attitude of the investors and their predictions, there are different shapes that can be taken by a yield curve. One of the most common type of yield curve is an upward sloping (or more generally called as positive curve) in which yield increases as the maturity of the bond increases. Apart from the most common one, other shapes that are prevalent occasionally are of three types. An inverted yield curve (or a downward sloping curve) is the one in which yield does not increase with the maturity time. Another type of yield curve is a humped yield curve which has ups and downs along the line as the maturity grows. And, in the end, there is a flat shaped yield curve. In this type of yield curve, all the maturities have the same yield irrespective of the time frame. A humped and a flat yield curve shows that the investors are uncertain of the market behavior. (Fabozzi, Mann Choudhry, 2003) The UK Yield curve that is under consideration has been dated on 12th December 2009. The UK curve exhibits all different types of yield curves. In the beginning, for a 1-month treasury note, the interest rate that is applicable is 0.47%. And, a 3-month treasury note has a interest rate of 0.47% while a 6-month note would give returns at the rate of 0.49%. As the trend can be seen, the curve gives almost the same return for a 1-month to 6-month treasury notes. This type of yield curve is a flat shaped yield curve. This shows that the investors are unsure of the economy in the near future and have very less expectations. Also, it indicates stable interest rates in the near future i.e. lending rate by the bank of England is not likely to increase in the near future and the economy is tightened by the government. The interest rate paid on a 2-year maturity bill is 1.23%, and on a 3-year maturity bill is 1.69%. While a 5-year bill has a return of 2.69% and a 10-year bond has a return of 3.88%. This period has seen a sharp rise in the predicted yields of an investment in the economy. It indicates that the investors would like to be paid an extra risk premium for blocking their money for such a long time. This is due to the level of uncertainty and increased chances of the investment being sunk. Investors anticipate a growth in the economy in this period as the country has just come out of recession and the government is taking all possible measures to get rid of this devil. Also, investors anticipate the inflation rates to increase rather than decrease. This is due to the fact that if the inflation rates increase, then the central bank has to squeeze the monetary policy by increasing the short term rate of interests. This is done so as to slower the economic growth of the nation and reduce the pressure of inflation over the market. Post this 10 year period, it can be seen that the interest rates have again come to a flat position or to be more precise a bit of inverted in the end. This can be due to the fact that the investors are not expecting any further increase in the inflation rates in the near future. So, if the expectations are of inflation levels being low in the future, then the investors would get a lower premium for their investments for a longer period. Another aspect of the same story can be the expectation of no increase in the interest rates by the central bank. Also, one of the more probabilistic chances are that UK being a developed nation, other countries might jump in to buy the treasury notes and bonds. In the past, Central banks of developing nations have jump in to buy the long term bonds of developed nations. This then leads to a flat yield as the demand in the market for the bonds is huge. Another concern being that the most hated word, recession, can again come into play as the economy is seen to be heading towards another situation where liquidation problem may arise and the interest rates are again seen going down or coming to a halt. PART-B: On study of HICL, 50 day moving average for past 3 years i.e. since its launching in the stock market, No. of signals generated = 14 No. of buy signals = 7 No. of sell signals = 7 Thus, ratio of positive returns/ total signals = 7/14 = 0.5 The ratio is exactly 0.5 i.e. the chances are even that the investment made by following the 50-day moving average method would yield a return. A moving average is a interesting tool used to depict the trend of the share prices in consideration. It is generally helpful in order to invest in a market where the share price of the stock is fluctuating. A moving average trend is the summation of closing price of the shares divided by the no. of days in consideration. In simple words, it is the average of the closing stock prices of the company in relation to the number of days. (Edwards, Magee and Bassetti, 2001) The fundamental rule to invest by following a 50 day moving average is to generate a buy signal, when the share prices line cuts the moving average curve from below. While, a sell signal is generated when the share prices of the concerned company cuts the moving average from above. Moving averages are helpful when the trading conditions for the shares are favorable, i.e. smooth trends, but mostly they attract the investors to make losses by investing through study of a moving average trend. (Stewart, 1996) One of the main problems with the moving average method is that it can be unpredictable at times. It reacts to any piece of information twice i.e. once, when any new information is added to draw the curve ahead and secondly, when the last information is dropped off from the moving average curve. This means, that if the last information is a high price, then the moving average would move down. While, in case, if the last price is a low price, then the moving average is likely to move up, irrespective of the share price of the new day that has been added to draw the moving average curve. Another drawback of the method is that they tend to delay the attitude of the market. This is the price that the investors in the market are ready to pay due to the smoothening effect of the curve. The primary application of the moving curve is to provide the user (investor in this case) a visual aid to show the trend of the market. Another important aspect of this process is when the share price in the market tends to fall below the curve of moving average. This signal is important and should not be ignored especially when dealing with the long term calculation of the share prices. One of the main risks associated with this technique is that the investors tend to be whipsawed i.e. suppose, when the market falls below the moving average and a sell signal is created. But, then immediately or within a short frame of time, the share price tends to rise up again and thus generating a buy signal. By this case, the conclusion must be clear that this is a not so reliable method to invest i n the market. (Dagnino, 2001) This process of being whipsawed has been commonly prevalent in our case i.e. HSBC infrastructure company. This has happened 4 times i.e. when the share line crosses the moving average line from top, a sell signal was created but then all of a sudden or within a really short time frame, a buy signal was created. This further confuses the investors as the sell and buy signals are created back to back. One of the primary drawbacks of the moving average method is that it essentially tends to miss out the turning points i.e. when an important event has occurred due to which the share price of the share tend to fall immediately like fraud being visible, change in management, new project announcement or some other key information. Then, this method tends to immediately react to all this informations as the data in consideration is of 50 days and it takes a couple of days to react to this information. Or, if by chance, there is a bad news for the company and the market sees a sudden fall in the prices of shares, then the curve takes some time to react to this piece of information. A moving average trend method comes with certain drawbacks and its advantages. The method is very easy to calculate and too simple to understand. It does not require any special understanding of higher order mathematics or any special financial theory. But, one of the main drawbacks is that the method is not reliable as it uses the previous data available in the market. This method cannot be used to indicate the crests and troughs of the stock price in consideration. Since, the method deals with historically available data, so it can better are termed as a trend following indicator rather than trend indicator which it is supposed to be. Another factor in consideration should be the market behavior, i.e. if the market or a particular stock is behaving in a particular trend then this method might be of some use. But, if in case the market is moving without any particular trend, then this method can turn out to is a big failure leading to the collapse of investors portfolio or his inve stment. ANNEXURES: Grandville, O, Bond pricing and portfolio analysis: protecting investors in long run, Massachusetts Institute of Technology, 2001 Vanhorne, J, Wachowicz, J, Fundamentals of financial management, Pearson education limited, 2008 Fabozzi, F, Mann, S, Choudhry, M; Measuring and controlling interest rates and credit risk, John Wiley and sons, 2003 Edwards, R D, Magee, J, Bassetti, W, Technical analysis of stock trends, CRC press, 2001 Stewart,T ,How charts can make you money: technical analysis for investors, Woodhead publishing, 1996 Dagnino, G,Profiting in bull or bear markets, McGraw hill, 2001

Economics of Public Policy - 1186 Words

Daniel R. Lupu ECN 4010 2/18/2012 Economics of Public Policy Test 1 2. In thinking about a market economy and a regulated or planned economy, discuss the difference between â€Å"end-independent† rules or laws in society versus â€Å"end-dependent† rules or laws in society. In what ways would â€Å"end-dependent† rules or laws limit the use of knowledge by people in society, and how does â€Å"end-independent† rules or laws provide opportunity for people to use their different types of knowledge in society? (The distinction between â€Å"end-independent† and â€Å"end-dependent† rules or laws were discussed in class and in the article on, â€Å"Free Markets, the Rule of Law, and Classical Liberalism.†) The difference between â€Å"end-independent† laws and†¦show more content†¦(Don’t be afraid to use supply and demand diagrams in your explain and examples.) Usury Laws can lead to a black market in money lending. These regulations set by the government are intended to â€Å"protect† the citizens from â€Å"greedy† lenders by setting a maximum rate of interest, above which it is illegal to lend money. Lenders charge higher rates of interest to compensate for the amount of risk that can be associated with the transaction, risk being the likely hood of not getting paid in full. Once a usury law is put in effect there becomes a maximum rate at which the lender can lend money. With this maximum rate of interest some potential borrowers will be assumed too risky because it is not legal to charge the rate of interest to compensate the risk associated with lending. This leads to a smaller amount of money available to borrow from legitimate lenders, so often a borrower will turn to a black market lender who will illegally lend them money at a higher rate of interest. Often times the black market lender will use forms of persuasion s uch as bodily harm to the borrower and their family to ensure repayment. 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Causes And Consequences Of Malnutrition And Starvation Essay

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Advantages Of IT In Courier Business Samples †MyAssignmenthelp.com

Question: Discuss about the Advantages Of IT In Courier Business. Answer: Introduction In the present age, the impact of information and technology is vividly visible in various business operations. The IT shapes the business operations in much simpler and enhanced manner thus raising the demand for incorporation of IT in business management. In the recent times, the advent of IT in the courier companies is witnessed. Incorporation of IT in supply logistics have greatly gave the courier business a new form resulting in the much organized package deliveries and sorting as well as maintaining a healthy communication with the sender and the receiver. This report mainly highlights the advantages of IT in courier business. Role of IT in courier companies: Enhanced sorting practices Incorporation of IT in the courier industry has greatly improved the sorting process of the packages and the deliverables. Rather than the traditional methods of sorting the letters advent of technology have given rise to the semi-automatic as well as fully automatic process for the sorting of packages. This automatic sorting process have minimized human labor, improved the sorting speed and also made the system less erroneous resulting in much optimized delivery system. The manual process of package handling and sorting is replaced by barcode technology. Each of the packages is assigned with a unique security code which helps in the identification of the shipment with the help of the scanning system (Hasnan, Noordin Osman, 2014). In the present date, the barcode technology is further evolved to resulting in the much efficient automatic labeling and sorting process. The courier companies are also incorporating the RFID technology for the sorting process. Although this technology is much costlier but it provides with several advantages compared to the age long barcode technology. RFID allows the reading of the codes from distance, which in turn enhances the security and reduces the chance of human error (Xu, 2014). Delivery process and transportation The delivery process is also optimized with the incorporation of IT by the courier companies. Software related to the delivery management is utilized by number of courier companies. Utilization of such specialized software and the courier tracking software has made the delivery process much simpler and efficient at the same time. The GPS tracking system have enabled the sender and the receiver to monitor their shipments in regular basis (Lin et al. 2014). Certain innovative transportation technologies are also in progress. Innovative vehicles such as drones, electric vehicles will be utilized for transportation of the shipment in the near future. Famous courier companies such as DHL and FedEx have already adapted this innovative transportation technology (Gruber, Kihm Lenz, 2014). Conclusion In conclusion, it can be seen that the IT have greatly brought improvement in the various operations of the courier industry. Incorporation of the technology has optimized the sorting as well as delivery process of the shipments. It can be seen that the GPS based tracking applications has enabled much accurate tracking of the goods by the customers. Other than this, the technology based sorting system has made the overall shipment process much efficient. References Gruber, J., Kihm, A., Lenz, B. (2014). A new vehicle for urban freight? An ex-ante evaluation of electric cargo bikes in courier services.Research in Transportation Business Management,11, 53-62. Hasnan, N., Noordin, A., Osman, N. H. (2014). Six main innovation issues: A case of service innovation of postal and courier services in Malaysia.Journal of Technology Management and Business,1(1). Lin, C., Choy, K. L., Ho, G. T., Lam, H. Y., Pang, G. K., Chin, K. S. (2014). A decision support system for optimizing dynamic courier routing operations.Expert Systems with Applications,41(15), 6917-6933. Xu, X. (2014). IOT Technology Research in E-commerce.Information Technology Journal,13(16), 2552-2559.