Individual Assignment for subject FIN542 PDF

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FACULTY OF BUSINESS MANAGEMENTBACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCEGROUP (BA2422A2)PROGRAMME CODEBAINTERNATIONAL FINANCIAL MANAGEMENT(FIN 542)GROUP ASSIGNMENT(CASE STUDY)SESSION 1 2019/GROUP MEMBERS:DK NUR RAIHANAH BINTI A SULAIMAN (2019814526)DG SITI NURAQILAH BINTI AG MATUSIN (2019601...

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FACULTY OF BUSINESS MANAGEMENT BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE GROUP (BA2422A2) PROGRAMME CODE BA242

INTERNATIONAL FINANCIAL MANAGEMENT (FIN 542)

GROUP ASSIGNMENT (CASE STUDY)

SESSION 1 2019/2020

GROUP MEMBERS: DK NUR RAIHANAH BINTI A SULAIMAN (2019814526) DG SITI NURAQILAH BINTI AG MATUSIN (2019601744) NURHAFIZAH TUL BINTI JUSNIN (2019819268)

SUBMITTED TO MISS MARYAM

ACKNOWLEDGEMENT

TABLE OF CONTENT

Analysis of the case study Expectations on the future value of the currency Company background Business Situation Hedging strategies and calculations…………………………………………………………………………………………………… References…………………………………………………………………………………………………………………………………………..

1.0 ANALYSIS OF CASE THE STUDY

Nowadays, the trade disputes between the world largest and third largest export markets between United State (US) and China which is still unresolved and continuing until now has affected the global market and the resulting global demand for Malaysian exports. Not only that, it also affect Malaysia’s trading position . This is an according to Shankaran Nambiar of the Malaysian Institute of Economic Research [ CITATION Ari19 \l 17417 ]. Furthermore, according to the report of the economic review of 2019 that had been released by the Ministry of Finance, stated that any evolution that have occurred to major trading partners will have a direct and indirect impact on Malaysia's economic growth[ CITATION BHO18 \l 17417 ]. The current trade tensions can affect Malaysia’s direct exports with the US because of the imposition of safeguard tariffs on selected items, which includes some of Malaysia’s major exports to the US [ CITATION Tha19 \l 17417 ]. Muhammed Abdul Khalid as an economic advisor to Prime Minister Dr Mahathir Mohamad said that, the U.S.-China trade war is predicted to add around 0.1 percentage points to Malaysia’s gross domestic product, which could benefit Malaysia from the trade conflict between the world’s top two economies[ CITATION Lee19 \l 17417 ]. This includes products in which Malaysia already has meaningful presence in the US (defined as Malaysia’s exports that account for at least 5% of US’ import market share), coupled with the ability to ramp up production capacity[ CITATION Muh18 \l 1033 ]. Not only that, trade wars will also give impact to the weakening of the Malaysian ringgit, otherwise this negative impact can be avoided if our country can reduce imports of products from oversea said by the Prime Minister Dr Mahathir Mohamad [ CITATION New19 \l 1033 ]. To manage the risk in order to protect our business position from the possible upcoming currency risk are by using hedging strategies, by entering into a short or long hedge. This is due to protect our business against uncertain price movements in order to maintain financial stability.

2.0 EXPECTATIONS ON THE FUTURE VALUE OF CURRENCY - Factors - Reasons

3.0 COMPANY BACKGROUND Superb Fresh Poultry Sdn Bhd company is an agribusiness company founded in 25 th December 2011 by Raihanah, Aqilah, and Hafizah which is wholly owned by Bumiputera company in the cottage and poultry industry in Malaysia. Superb Fresh Poultry was initially registered on December 16, 2012 followed by Superb Fresh Poultry Sdn Bhd registered on August 05, 2016. Superb Fresh Poultry Sdn Bhd’s poultry farm capacity of 15,000 and 55,000 livestock farms, and have a poultry license licensed by the Department of Veterinary Services as well as receiving advice and technical assistance on animal husbandry and medical care. Superb Fresh Poultry Sdn Bhd is always integrated in the livestock and poultry industry in Malaysia. The company operates livestock breeding, slaughtering, packing, breeding, supplying live chickens to processing, processing and supplying ready-to-sell chickens. marketing and distribution of fresh chicken directly from the farm to customers. The purpose of this business is to deliver and supply Halal products when it comes to processing and supplying ready- to-sell chickens that has Halal certification provided by Jabatan Agama Islam Malaysia (JAKIM). This is because our products are processed and manufactured in accordance with Shariah law that had been approved by JAKIM.

4.0 BUSINESS SITUATION - cemana kau export business mu ke us -delivery cmna -pnghntran cmna &brpa lama smpai

5.0 HEDGING STRATEGIES AND CALCULATIONS 5.1 Hedging strategies - At least 3 strategies 5.2 Calculations -use real time interest rate, forward rate, future rate, options and exchange rates

6.0 REFERENCES Ariff, S. (2019, April 10). My Say: US-China trade war and its impact on Malaysia. The Edge Malaysia. Retrieved from https://www.theedgemarkets.com/article/my-say-uschina-trade-war-and-itsimpact-malaysia BH ONLINE. (2018, November 2). Konflik perdagangan AS-CHINA beri kesan global. Nasional. Retrieved from https://www.bharian.com.my/berita/nasional/2018/11/493676/konflikperdagangan-china-beri-kesan-global Lee, Y. N. (2019, May 28). The US-China trade war is a net positive for Malaysia, says prime minister’s advisor. Asia Economy. Retrieved from https://www.cnbc.com/2019/05/28/mahathiradvisor-on-us-china-trade-war-impact-on-malaysia-economy.html Muhamad Aizuddin, Lim Boon Seong, Daryl Yong, Chang When Heui, Rantai ak Naga, Ooi Kiesha, & Catharine Kho. (2018). Escalating Trade Tensions and Potential Spillovers to Malaysia. BNM QUARTERLY BULLETIN, p. 39. Retrieved from http://www.bnm.gov.my/files/publication/qb/2018/Q3/p6ba1.pdf News. (2019, Mei 25). PM: Perang dagang AS-China lemahkan ringgit. Malaysia Kini. Retrieved from https://www.malaysiakini.com/news/477358 Tham Siew Yean, Andrew Kam Jia Yi, & Tee Beng Ann . (2019, May). US-China Trade War: Potential Trade and Investment Spill-overs into Malaysia. Economic Working Paper, p. 1. Retrieved from https://www.iseas.edu.sg/images/pdf/ISEAS_EWP_2019-3_Tham_Kam_Tee.pdf...