The Indonesia Capital Market performance from year 2006-2011 is in good run because the historical data of the capital market show the increase of the price and volume of transaction as the year goes by. Even though there are some decreases in price and volume of transaction for the year 2008 as the impact of the Global Crisis, later on in the year 2009 the market moved in positive action as the financial crisis is being handled even not fully recovered. So, the Indonesia Capital Market is in a good condition and can be better in the future as the financial condition is growing from year to year.
The India Capital Market is the weak-form which means that the stock price doesn’t reflect the information available in the market. There the performance of the India Capital Market is relatively stagnant as the increase from year to year for the price and volume is quite the same where it stands around the average volume for 24946.66667 and average price for 14606.9261
German’s capital market relies on bank-intermediated products and not so much on capital market processes. Two of the pillars in German’s three-pillar banking system, the savings banks and the cooperative banks, have special statutes and are not exposed to the control of the capital market through the usual threat of a change in ownership.
At the early begining of January up to September 2006 and also for the January 2007 up to July 2008 the Volume shows up as 0 points.
Therefore the German Market is not only a good option but an excellent opportunity to finance international projects. The project will be initiated, managed and marketed by us including a the assistance of a German Business Law Firm specialized in the issuance of Private Placement Memorandums/Prospectus including the assistance of Economists and Tax Specialists that have over 25 years of experience.
Because these three countries are located in far distance from one to another as geographically in different islands, the capital markets are having a very low correlation one to another and also the events on one country have a very little impacts on the other two countries, vice versa, this is happening as the market indexes and market efficiencies from all three capital markets are likely to be semi-strong and weak-form thus all the information available in the markets are reflected lightly to the price of stocks and also the movement of the capital markets.
Minggu, 01 Mei 2011
The Analysis of German Capital Market
German’s capital market relies on bank-intermediated products and not so much on capital market processes. Two of the pillars in German’s three-pillar banking system, the savings banks and the cooperative banks, have special statutes and are not exposed to the control of the capital market through the usual threat of a change in ownership.
For the situation at the German Capital MarketAt the early begining of January up to September 2006 and also for the January 2007 up to July 2008 the Volume shows up as 0 points. Therefore the German Market is not only a good option but an excellent opportunity to finance international projects. The project will be initiated, managed and marketed by us including a the assistance of a German Business Law Firm specialized in the issuance of Private Placement Memorandums/Prospectus including the assistance of Economists and Tax Specialists that have over 25 years of experience.
For the situation at the German Capital MarketAt the early begining of January up to September 2006 and also for the January 2007 up to July 2008 the Volume shows up as 0 points. Therefore the German Market is not only a good option but an excellent opportunity to finance international projects. The project will be initiated, managed and marketed by us including a the assistance of a German Business Law Firm specialized in the issuance of Private Placement Memorandums/Prospectus including the assistance of Economists and Tax Specialists that have over 25 years of experience.
The Analysis of India Capital Market
The India Capital Market is the weak-form which means that the stock price doesn’t reflect the information available in the market. There the performance of the India Capital Market is relatively stagnant as the increase from year to year for the price and volume is quite the same where it stands around the average volume for 24946.66667 and average price for 14606.92617.
CRISIL Ratings believes that introduction of the base rate mechanism in India’s banking system, with effect from July 1, 2010, will enhance competition in the short-term lending space. Issuance volumes in the debt capital markets are also likely to increase as the highly rated corporates begin to shift towards these markets. Banks with competitive base rates and efficient treasury operations are well placed to benefit from the new scenario. The base rate for public sector banks is in the range of 7.5 per cent to 8.25 per cent, while that for private sector and foreign banks is lower — by 50-100 basis points (bps)
And for the year of 2011, the Indian shares fell for the fifth straight session Monday as a lower-than-expected February factory output reading sparked concerns that high interest rates and rising raw-material prices were hurting economic growth. News of an earthquake in northern Japan, which the Japan Meteorological Agency said had a magnitude of 7.0, spurred further selling late in the session.
Some major single-day falls of the SENSEX have occurred on the following dates:
1. January 21, 2008 --- 1,408.35 points
2. Oct 24, 2008---1070.63 points
3. March 17, 2008 --- 951.03 points
4. July 6, 2009 --- 870 points
5. January 22, 2008 --- 857 points
6. June 27, 2008 --- 600.00 points
7. February 24, 2011 --- 545.92 points
8. November 12, 2010 --- 432 Points
9. November 16, 2010 --- 444.55 Points
10. February 04, 2011 --- 441.92 Points
CRISIL Ratings believes that introduction of the base rate mechanism in India’s banking system, with effect from July 1, 2010, will enhance competition in the short-term lending space. Issuance volumes in the debt capital markets are also likely to increase as the highly rated corporates begin to shift towards these markets. Banks with competitive base rates and efficient treasury operations are well placed to benefit from the new scenario. The base rate for public sector banks is in the range of 7.5 per cent to 8.25 per cent, while that for private sector and foreign banks is lower — by 50-100 basis points (bps)
And for the year of 2011, the Indian shares fell for the fifth straight session Monday as a lower-than-expected February factory output reading sparked concerns that high interest rates and rising raw-material prices were hurting economic growth. News of an earthquake in northern Japan, which the Japan Meteorological Agency said had a magnitude of 7.0, spurred further selling late in the session.
Some major single-day falls of the SENSEX have occurred on the following dates:
1. January 21, 2008 --- 1,408.35 points
2. Oct 24, 2008---1070.63 points
3. March 17, 2008 --- 951.03 points
4. July 6, 2009 --- 870 points
5. January 22, 2008 --- 857 points
6. June 27, 2008 --- 600.00 points
7. February 24, 2011 --- 545.92 points
8. November 12, 2010 --- 432 Points
9. November 16, 2010 --- 444.55 Points
10. February 04, 2011 --- 441.92 Points
The Analysis of Indonesia Capital market
A. Indonesian Capital Market
The Indonesia Capital Market performance from year 2006-2011 is in good run because the historical data of the capital market show the increase of the price and volume of transaction as the year goes by. Even though there are some decreases in price and volume of transaction for the year 2008 as the impact of the Global Crisis, later on in the year 2009 the market moved in positive action as the financial crisis is being handled even not fully recovered. The year 2009 closed with a stellar performance by the Indonesia Stock Exchange. The stock market index was up 85.85 percent, ranked second after the Shenzhen Stock Index, which increased by 115.27 percent, and ahead of other Asian stock indices such as Mumbai, Shanghai, Hong Kong and Singapore.
There on April 20, 2011 the Jakarta Composite Index hits new record and closed at 3,794.76. Trading volume was about Rp.5.9 trillion ($0.68 billion) and the overall market capitalization up to Rp.3, 384 trillion ($389 billion). For 2011 the performance of the market is increasing as the numbers of events are happening such as the IPO of the Garuda Indonesia. And in the february 2011, the BI rate was increase to 6.75% which is responded positively by the investors at first but then slightly reduced as the investors are hoping the Capital Bank to increase the interest rate again in order to reduce the inflation. So, the Indonesia Capital Market is in a good condition and can be better in the future as the financial condition is growing from year to year.
The Indonesia Capital Market performance from year 2006-2011 is in good run because the historical data of the capital market show the increase of the price and volume of transaction as the year goes by. Even though there are some decreases in price and volume of transaction for the year 2008 as the impact of the Global Crisis, later on in the year 2009 the market moved in positive action as the financial crisis is being handled even not fully recovered. The year 2009 closed with a stellar performance by the Indonesia Stock Exchange. The stock market index was up 85.85 percent, ranked second after the Shenzhen Stock Index, which increased by 115.27 percent, and ahead of other Asian stock indices such as Mumbai, Shanghai, Hong Kong and Singapore.
There on April 20, 2011 the Jakarta Composite Index hits new record and closed at 3,794.76. Trading volume was about Rp.5.9 trillion ($0.68 billion) and the overall market capitalization up to Rp.3, 384 trillion ($389 billion). For 2011 the performance of the market is increasing as the numbers of events are happening such as the IPO of the Garuda Indonesia. And in the february 2011, the BI rate was increase to 6.75% which is responded positively by the investors at first but then slightly reduced as the investors are hoping the Capital Bank to increase the interest rate again in order to reduce the inflation. So, the Indonesia Capital Market is in a good condition and can be better in the future as the financial condition is growing from year to year.
Previous Research
b) Previous Research
a) Sudeep Jain: Indian Shares Fall on Industrial Output Data.
Indian shares fell for the fifth straight session Monday as a lower-than-expected February factory output reading sparked concerns that high interest rates and rising raw-material prices were hurting economic growth. News of an earthquake in northern Japan, which the Japan Meteorological Agency said had a magnitude of 7.0, spurred further selling late in the session.
The Bombay Stock Exchange's Sensitive Index fell 188.91 points, or 1%, to close at 19262.54 after moving between 19242.59 and 19426.30. On the National Stock Exchange, the 50-stock S&P CNX Nifty fell 56.30 points, or 1.0%, to end at 5785.70. Trading volume on the BSE fell to 25.82 billion rupees ($586 million) from Friday's 36.24 billion rupees. Gainers lagged decliners 1,134 to 1,746, while 93 stocks were unchanged.
Mr. Mathews expects Indian shares to remain under pressure due to negative macroeconomic factors such as high crude prices, until software vendor Infosys Technologies kicks off the earnings season Friday. Of the 30 Sensex constituents, 22 ended lower Monday. They were led by Reliance Industries, India's largest company by market capitalization, which fell 1.7% to 1,007.15 rupees.
b) Jim Mueller: How Interest Rates Affect The Stock Market
The first indirect effect of an increased federal funds rate is that banks increase the rates that they charge their customers to borrow money. Individuals are affected through increases to credit card and mortgage interest rates, especially if they carry a variable interest rate. This has the effect of decreasing the amount of money consumers can spend. After all, people still have to pay the bills, and when those bills become more expensive, households are left with less disposable income. This means that people will spend less discretionary money, which will affect businesses' top and bottom lines (that is, revenues and profits).
Therefore, businesses are also indirectly affected by an increase in the federal funds rate as a result of the actions of individual consumers. But businesses are affected in a more direct way as well. They, too, borrow money from banks to run and expand their operations. When the banks make borrowing more expensive, companies might not borrow as much and will pay a higher rate of interest on their loans. Less business spending can slow down the growth of a company, resulting in decreases in profit. (For extra reading on company lending, read When Companies Borrow Money.)
Clearly, changes in the federal funds rate affect the behavior of consumers and business, but the stock market is also affected. Remember that one method of valuing a company is to take the sum of all the expected future cash flows from that company discounted back to the present. To arrive at a stock's price, take the sum of the future discounted cash flow and divide it by the number of shares available. This price fluctuates as a result of the different expectations that people have about the company at different times. Because of those differences, they are willing to buy or sell shares at different prices. When a company is seen as cutting back on its growth spending or is making less profit - either through higher debt expenses or less revenue from consumers - then the estimated amount of future cash flows will drop. All else being equal, this will lower the price of the company's stock. If enough companies experience a decline in their stock prices, the whole market, or the indexes (like the Dow Jones Industrial Average or the S&P 500) that many people equate with the market, will go down.
c) M. Hashem Pesaran: Market Efficiency and Stock Market Predictability
It is often argued that if stock markets are efficient then it should not be possible to predict stock returns, namely that none of the variables in the stock market regression should be statistically significant. Some writers have even gone so far as to equate stock market efficiency with the non-predictability property. But this line of argument is not satisfactory and does not help in furthering our understanding of how markets operate.
The concept of market efficiency needs to be defined separately from predictability. In fact, it is easily seen that stock market returns will be non-predictable only if market efficiency is combined with risk neutrality.
When the Fed increases the federal funds rate, it does not have an immediate impact on the stock market. Instead, the increased federal funds rate has a single direct effect - it becomes more expensive for banks to borrow money from the Fed. However, increases in the discount rate also cause a ripple effect, and factors that influence both individuals and businesses are affected.
a) Sudeep Jain: Indian Shares Fall on Industrial Output Data.
Indian shares fell for the fifth straight session Monday as a lower-than-expected February factory output reading sparked concerns that high interest rates and rising raw-material prices were hurting economic growth. News of an earthquake in northern Japan, which the Japan Meteorological Agency said had a magnitude of 7.0, spurred further selling late in the session.
The Bombay Stock Exchange's Sensitive Index fell 188.91 points, or 1%, to close at 19262.54 after moving between 19242.59 and 19426.30. On the National Stock Exchange, the 50-stock S&P CNX Nifty fell 56.30 points, or 1.0%, to end at 5785.70. Trading volume on the BSE fell to 25.82 billion rupees ($586 million) from Friday's 36.24 billion rupees. Gainers lagged decliners 1,134 to 1,746, while 93 stocks were unchanged.
Mr. Mathews expects Indian shares to remain under pressure due to negative macroeconomic factors such as high crude prices, until software vendor Infosys Technologies kicks off the earnings season Friday. Of the 30 Sensex constituents, 22 ended lower Monday. They were led by Reliance Industries, India's largest company by market capitalization, which fell 1.7% to 1,007.15 rupees.
b) Jim Mueller: How Interest Rates Affect The Stock Market
The first indirect effect of an increased federal funds rate is that banks increase the rates that they charge their customers to borrow money. Individuals are affected through increases to credit card and mortgage interest rates, especially if they carry a variable interest rate. This has the effect of decreasing the amount of money consumers can spend. After all, people still have to pay the bills, and when those bills become more expensive, households are left with less disposable income. This means that people will spend less discretionary money, which will affect businesses' top and bottom lines (that is, revenues and profits).
Therefore, businesses are also indirectly affected by an increase in the federal funds rate as a result of the actions of individual consumers. But businesses are affected in a more direct way as well. They, too, borrow money from banks to run and expand their operations. When the banks make borrowing more expensive, companies might not borrow as much and will pay a higher rate of interest on their loans. Less business spending can slow down the growth of a company, resulting in decreases in profit. (For extra reading on company lending, read When Companies Borrow Money.)
Clearly, changes in the federal funds rate affect the behavior of consumers and business, but the stock market is also affected. Remember that one method of valuing a company is to take the sum of all the expected future cash flows from that company discounted back to the present. To arrive at a stock's price, take the sum of the future discounted cash flow and divide it by the number of shares available. This price fluctuates as a result of the different expectations that people have about the company at different times. Because of those differences, they are willing to buy or sell shares at different prices. When a company is seen as cutting back on its growth spending or is making less profit - either through higher debt expenses or less revenue from consumers - then the estimated amount of future cash flows will drop. All else being equal, this will lower the price of the company's stock. If enough companies experience a decline in their stock prices, the whole market, or the indexes (like the Dow Jones Industrial Average or the S&P 500) that many people equate with the market, will go down.
c) M. Hashem Pesaran: Market Efficiency and Stock Market Predictability
It is often argued that if stock markets are efficient then it should not be possible to predict stock returns, namely that none of the variables in the stock market regression should be statistically significant. Some writers have even gone so far as to equate stock market efficiency with the non-predictability property. But this line of argument is not satisfactory and does not help in furthering our understanding of how markets operate.
The concept of market efficiency needs to be defined separately from predictability. In fact, it is easily seen that stock market returns will be non-predictable only if market efficiency is combined with risk neutrality.
When the Fed increases the federal funds rate, it does not have an immediate impact on the stock market. Instead, the increased federal funds rate has a single direct effect - it becomes more expensive for banks to borrow money from the Fed. However, increases in the discount rate also cause a ripple effect, and factors that influence both individuals and businesses are affected.
The Comparison and Relationship
Factors Measurement
a) Interest Rates
Interest rates determine the cost of doing business for firms and return on assets such as bonds, which serve as substitutes for stocks. Thus, an increase in interest rates makes bonds more attractive relative stocks therefore the price of the stocks will fall subjectively.
b) Average Price
The average price per share is important to know for tax purposes and the average price per share also determines the break-even point for a stock. (www.investorglossary.com)
c) Volume of Transaction
The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller, then the volume for that period increases by 100 shares based on that transaction.
Investopedia explains Volume as an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. (www.investopedia.com)
Market timers often use volume as an indicator of future price change. For instance, some traders believe that a surge in trading volume on a stock is a precursor to a rapid change in price. The theory is that important news does not reach everyone at the same time, so an unexpected increase in volume suggests important news has been leaked.
d) The Capital Market Efficiency
The assumptions about what information is available to investors and reflected in the price in the Capital Market. Hence, the economist believed and defined three levels of market efficiency:
1. Weak form: all the past prices for a stock were impounded into today’s price; price today simply followed a random walk with no correlation with the past patterns.
2. Semi-Strong form: today’s price reflected not only the all past prices, but also all publicly available information.
3. Strong form: today’s price reflected all the information that could be acquired through a close analysis of the company and the economy.
e) The Capital Market Index
A 'national' index represents the performance of the stock market of a given nation—and by proxy, reflects investor sentiment on the state of its economy. The most regularly quoted market indices are national indices composed of the stocks of large companies listed on a nation's largest stock exchanges, such as the American S&P 500, the Japanese Nikkei 225, and the British FTSE 100.
D. Comparison
Indonesia India German
Interest Rate 0,0675 0.075 0,0125
Average Closing Price 2170,14 14745,4 6171,5
Volume of Transaction 1697181152 24946,7 17054702
Market Efficiency semi-strong weak-form Semi-Strong
Market Index Capitalization- Cap-weighted Total Return
weighted
E. Relationship
Because these three countries are located in far distance from one to another as geographically in different islands, the capital markets are having a very low correlation one to another and also the events on one country have a very little impacts on the other two countries, vice versa, this is happening as the market indexes and market efficiencies from all three capital markets are likely to be semi-strong and weak-form thus all the information available in the markets are reflected lightly to the price of stocks and also the movement of the capital markets.
a) Interest Rates
Interest rates determine the cost of doing business for firms and return on assets such as bonds, which serve as substitutes for stocks. Thus, an increase in interest rates makes bonds more attractive relative stocks therefore the price of the stocks will fall subjectively.
b) Average Price
The average price per share is important to know for tax purposes and the average price per share also determines the break-even point for a stock. (www.investorglossary.com)
c) Volume of Transaction
The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller, then the volume for that period increases by 100 shares based on that transaction.
Investopedia explains Volume as an important indicator in technical analysis as it is used to measure the worth of a market move. If the markets have made strong price move either up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant the move. (www.investopedia.com)
Market timers often use volume as an indicator of future price change. For instance, some traders believe that a surge in trading volume on a stock is a precursor to a rapid change in price. The theory is that important news does not reach everyone at the same time, so an unexpected increase in volume suggests important news has been leaked.
d) The Capital Market Efficiency
The assumptions about what information is available to investors and reflected in the price in the Capital Market. Hence, the economist believed and defined three levels of market efficiency:
1. Weak form: all the past prices for a stock were impounded into today’s price; price today simply followed a random walk with no correlation with the past patterns.
2. Semi-Strong form: today’s price reflected not only the all past prices, but also all publicly available information.
3. Strong form: today’s price reflected all the information that could be acquired through a close analysis of the company and the economy.
e) The Capital Market Index
A 'national' index represents the performance of the stock market of a given nation—and by proxy, reflects investor sentiment on the state of its economy. The most regularly quoted market indices are national indices composed of the stocks of large companies listed on a nation's largest stock exchanges, such as the American S&P 500, the Japanese Nikkei 225, and the British FTSE 100.
D. Comparison
Indonesia India German
Interest Rate 0,0675 0.075 0,0125
Average Closing Price 2170,14 14745,4 6171,5
Volume of Transaction 1697181152 24946,7 17054702
Market Efficiency semi-strong weak-form Semi-Strong
Market Index Capitalization- Cap-weighted Total Return
weighted
E. Relationship
Because these three countries are located in far distance from one to another as geographically in different islands, the capital markets are having a very low correlation one to another and also the events on one country have a very little impacts on the other two countries, vice versa, this is happening as the market indexes and market efficiencies from all three capital markets are likely to be semi-strong and weak-form thus all the information available in the markets are reflected lightly to the price of stocks and also the movement of the capital markets.
German Capital Market ( DAX )
a. History
The DAX (Deutscher Aktien IndeX, formerly Deutscher Aktien-Index (German stock index)) is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. Prices are taken from the electronic Xetra trading system. According to Deutsche Börse, the operator of Xetra, DAX measures the performance of the Prime Standard’s 30 largest German companies in terms of order book volume and market capitalization.
b. Recent Performance
The X-DAX Index (DAX) climbed 47.53 points to 7,313.05. The measure, derived from trading in DAX Index futures, provides an estimate of German’s benchmark index. The DAX rose 46.3 points, or 0.6 percent, to 7,295.49 on April 21.
Deutsche Boerse AG (DB1) (DB1 GY): NYSE Euro next said its takeover by Deutsche Boerse to create the world’s biggest exchange operator will produce 100 million Euros ($146 million) more in cost savings than previously announced. The shares rose 0.8 percent to 55.10 Euros.
Kabel Deutschland AG (KD8 GY): Kabel Deutschland Holding AG (KD8) and ProSiebenSat.1 Media AG (PSM) are likely candidates to join the DAX Index when their owners sell more of their stakes, increasing the number of shares traded, Euro am Sonntag reported April 24. Kabel Deutschland’s shares rose 2 percent to 40.69 Euros. ProSiebenSat.1 Media (PSM GY) fell 2.6 percent to 18.05 Euros.
The DAX (Deutscher Aktien IndeX, formerly Deutscher Aktien-Index (German stock index)) is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. Prices are taken from the electronic Xetra trading system. According to Deutsche Börse, the operator of Xetra, DAX measures the performance of the Prime Standard’s 30 largest German companies in terms of order book volume and market capitalization.
b. Recent Performance
The X-DAX Index (DAX) climbed 47.53 points to 7,313.05. The measure, derived from trading in DAX Index futures, provides an estimate of German’s benchmark index. The DAX rose 46.3 points, or 0.6 percent, to 7,295.49 on April 21.
Deutsche Boerse AG (DB1) (DB1 GY): NYSE Euro next said its takeover by Deutsche Boerse to create the world’s biggest exchange operator will produce 100 million Euros ($146 million) more in cost savings than previously announced. The shares rose 0.8 percent to 55.10 Euros.
Kabel Deutschland AG (KD8 GY): Kabel Deutschland Holding AG (KD8) and ProSiebenSat.1 Media AG (PSM) are likely candidates to join the DAX Index when their owners sell more of their stakes, increasing the number of shares traded, Euro am Sonntag reported April 24. Kabel Deutschland’s shares rose 2 percent to 40.69 Euros. ProSiebenSat.1 Media (PSM GY) fell 2.6 percent to 18.05 Euros.
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