Posts tagged stock

Iceland Volcano Ash Disruption

BBC News: News Article 1, News Article 2

According to BBC News, shares in major European airlines have fallen as most UK flights remain grounded for a second day because of the volcanic ash in the atmosphere.

British Airways shares dropped down by 1.1% with many investors concerned about the loss from the stoppage. Meanwhile Germany’s Airline Lufthansa was down by 2.1% and Air France-KLM shares fell by 1.7%.

“For a large network carrier like BA or Lufthansa your talking about £10m a day – but that’s of limited commercial significance” said Douglas McNeill, transport analyst, Charles Stanley Securities.

While most of the airline industries are affected by this natural disaster, other industry such as pharmacy is suffering from the disaster also. Most of the drug exports/imports are heavily reliant on air freights. If this cancellation prolongs for over a week, it will definitely affect both airline and pharmacy industries severely.

Iceland volcano eruption stirred some health concerns, especially respiratory problems. World Health Organization said that it is not sure if this will cause serious health problems, however, it has advised people to stay indoors to avoid respiratory problems. It is also reported that there are some level of sulphur dioxide in the ash.

In sum, this volcanic eruption has caused several economic problem to health problems. If this prolong for over a week, European economies, including UK, will have difficulty due to canceled air flights.

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Dubai under scrutiny after debt payment delay

BBC News: Click Here

Yahoo News: Click Here

“Dubai’s financial health has come under scrutiny after a major, government-owned investmnet company asker for a six-month dely on repaying its debts.”

According to BBC News, Dubai World, the government-owned investment company, has a debt of $59 billion to the banks in Europe. The request for a postpone had considerable effect on the European stock market. Especially the Royal Bank of Scotland’s stock market was badly affected.

Dubai World was suffering from a credit-crunch as global economic recession has started from last year. Also the massive construction of skyscrappers, hotels, and fancy facilities has put a lot of financial burden on the company.

This is a credit default swap chart for countries that have been affected by Dubai’s delay in debt payment. This lists countries from left to right that are most vulnerable to this event. Those countries that are in deep danger of bankruptcy are Ukraine, Venezuela, Vietnam, and countries in Middle East. Countries that have low CDS points but have rapid increase are Japan, Chile and UK. These countries do not have high risk, however, they are potential danger.

Overall, this event certainly abashed Dubai’s credibility on its reliability and of its investment.

Resource:

CDS data Chart: Asian Economy News (In Korean Language)

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