| Posted: 12 July 2005 at 8:53pm | IP Logged
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Surging oil prices may potentially posing a risk to the world economy - no doubt about it. Decline in crude inventories and possible supply disruptions also will become contributing factors to push the price up.
Surprisingly, factors like disasters & attacks usually comes in package with acquisition of companies shares (stock and cash transactions) by bigger companies or their business counterparts. Sometimes due to these 'unseen' factors, it is not surprising to see Dow Jones and Nasdaq are still strong despite surging/fluctuating/volatile crude oil prices.
Here's a link about 9/11 from my point of view (it's in BM..sorry guys - most of my articles are as I know that not many Malaysians enjoy reading English-Speaking Materials - so you all must excuse my BM terms/vocabulary)
From my analysis on the 9/11 including World Wars and from the above 'acquisition scenario', I would conclude smart Investors/the market are still able to absorb 'shocking news' , process the information (tacit) efficiently, acted accordingly & thinking positively by keep listening to the 'good news' rather than 'bad news'.
Malaysia's decision to stick to 5% economic growth target is a good move - although sometimes may be construed as 'too cautious' or 'too playing safe'. As Malaysia are exporters, we can help in strenghtening fiscal deficit by ensuring the crude retail prices are stable. I think the Government will still continue to subsidise our local oil price while gaining 'compensation' via following scenarios :
(What we also must do (from the lessons of May & June):
1) We must do more to ensure transparent business practices* and a more open market to encourage stable investment (*including GLC's improvement in Corporate Governance)
2) We should put more effort to increase national savings,
3) We should help out in driving capital market in parallel with employment and domestic demand growth
The 2 months of May/June; to me; were definitely NOT a 'slowdown' period as most quarters claim but a period of reassessing our potential and opportunities - I would call it the 'continual improvement' process. And definitely strong efforts have been put by the Government.
nikzafri wrote:
An excerpt from my previous comments
I know that the government is working very hard to improve the nation's economy by strenghtening capital market (including Islamic Capital/Securities Market - Al-Bai Bithaman Ajil - to fund viable infrastructure projects), increase issuance of bonds (both corporate/islamic-sukuk) targetted at RM40 BIL this year, IDB & the success of Islamic Banking System, encouraging OIC to do more business with us, etc. etc. Even the banks (local and international) including Bank Negara are looking seriously and ready to absorb themselves into these important issues - help where they can.
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Small tips for the day
A) Some people said that in order for us to see the trend of economic growth, look at the trend in the electronic industry - but don't quote me for that. Do you agree? Why?
B) You can get ''distracted' by 'shocking news' but don't get 'too distracted' - believe me, there are people 'taking opportunity' while we are 'too distracted', by the time we do realize these scenarios, it cannot be undone anymore...yes, you can have the 'benefit of the doubt'
Edited by nikzafri on 14 July 2005 at 5:58pm
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NIK ZAFRI
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Consultant/Trainer KM,QOSHE,ICT
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Topic: Is US$60 a barrel here to stay?
barrier again! it's now at usd65.94 on nymex for light, sweet crude. but don't just put the blame squarely on iran & nigeria, please......