Oil Hedging

Executive Summary In late November 2008, two constitutional rights petitions was filed in the Sri Lankan compulsive 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 colossal losses to the State that could trudge from a low of $700 one thousand thousand to as high as $1,000 million if the decline of rude oil legal injurys continues as communicate by Merril Lynch life force Research, a US ground energy expert (The fiscal Times, December 2008, The Sunday Times). The hedgerow deal was subject to overmuch debate and discussion in the Sri Lankan parliament as considerably as local and outside(a) media and resulted in the temporary abatement 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 Sup reme Court as the government refused to bring down the price of petrol as put ined by the Court. This report pass on explore the oil hedging deal and its consequences from the Sri Lankan perspective.

It will round off the trading strategies employ by the CPC by providing an overview of the conflicting alter market, an introduction in to hedging and various fillings available for insuring against foreign exchange risk, a discussion on what type of option would cast off outgo suited the Sri Lankan circumstances as easily as probe in to what went wrong, the resulting disadvantages, how proper supervision cou ld have averted disaster as well as recommen! dations on how resembling financial crises may be avoided in the future. The facts discussed and views expressed in the report be purely for academic purposes and do not represent whatsoever prejudicial or political views. 1.Understanding the outside 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: BestEssayCheap.com

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