Oil Hedging

Executive Summary In late November 2008, two primordial rights petitions was filed in the Sri Lankan despotic Court against the oil colour hedge agreements with the Ceylon rock oil potentiometer (CPC) and several leading transnational and state banks. The subsequent prove in to the case revealed abundant losses to the State that could trudge from a low of $700 million to as high as $1,000 million if the decline of rocky oil sets continues as communicate by Merril Lynch zipper Research, a US ground energy expert (The financial Times, December 2008, The Sunday Times). The hedging deal was subject to oftentimes debate and discussion in the Sri Lankan parliament as s intumesce as local and outside(a) media and resulted in the temporary interruption of payments to the banks involved, the suspension of the CPC Chairman, and accusations against the Minister of Petroleum for alleged fraud. The investigations to the case were halted by the Supreme Court as the governme nt refused to bring down the price of petrol as prepareed by the Court. This report get out explore the oil hedging deal and its consequences from the Sri Lankan perspective.

It will inspection the trading strategies employ by the CPC by providing an overview of the unusual mass meeting market, an introduction in to hedging and various alternatives available for insuring against foreign exchange risk, a discussion on what type of option would support outgo suited the Sri Lankan circumstances as well as probe in to what went wrong, the resulting disadvantages, how proper supervision could have averted disa ster as well as recommendations on how conf! usable financial crises may be avoided in the future. The facts discussed and views expressed in the report be purely for academic purposes and do non represent whatsoever prejudicial or political views. 1.Understanding the contradictory commuting Market In order to understand the hedging deals entered in to by the CPC, and the consequences thereto, it is important to first gain a broad overview of the...If you expect to get a full essay, order it on our website: OrderCustomPaper.com

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