Free Essay

The Determinants of Gold Prices in Malaysia

In: Business and Management

Submitted By sitinurulhuda
Words 3136
Pages 13
Journal of Advanced Management Science Vol. 2, No. 1, March 2014

The Determinants of Gold Prices in Malaysia
Siti Nurulhuda Ibrahim, Nurul Izzat Kamaruddin, and Rahayu Hasan
Universiti Teknologi MARA, Bandaraya Melaka, Malaysia Email: {Sitinur304, nrl_izzat, rahayuhasan} @bdrmelaka.uitm.edu.my

Abstract—This paper analysed factors that affecting the prices of gold in Malaysia. The study used Multiple Linear Regression Model to determined significant relationship between dependent and independent variables, covering data for 10 years period which are from 2003 until 2012. The researcher used three independent variables that affect the prices of gold which are crude oil prices, inflation rates and exchange rates. The empirical results have found there is negatively significant relationship between inflation rates and exchange rates on gold prices, while a crude oil price is positively significant. The results of the study are valuable for both academic and investor. Index Terms—determinant, gold prices, crude oil prices, inflation rates, exchange rates

price and sell it at high price later on. Thus, this is why the factors that affect the gold price must be determined so that people may estimate the timing to buy, hold or sell the gold. This study is made to seek the proofs for the possible factors that affect the gold price in Malaysia. From this research, the most important or most influence factor can also be determined. Simply put, the findings for this research will bring benefit to individual, group as well as the government in analyzing the movement of the gold price. To discuss more about this topic, this research paper present the sensitivity of gold prices to the changes in the crude oil prices, inflation rates and exchange rates factor by taking 10 years data from 2003 until 2012. II. DATA AND METHODOLOGY

I.

INTRODUCTION

In world view, there are a lot of studies on factors that affecting the prices of gold. Recently, a broad study has been done by [1] that used the MGARCH model. According to the study, the variables that are thought to affect the gold prices are analyzed from 1992 until 2010; Oil prices, USA exchange rates, USA inflation rates, USA reel interest rates data are included in the model as variables. However, the study about factors affecting the prices of gold in Malaysia has not yet been made. As mentioned by [2] in Malaysian Reserve that price of gold has increased with widespread in the jewelry sector in recent years. According to Datuk Meer Sadik Habib, Managing Director of Habib Holdings Sdn Bhd, in early 2013 the price of 916 gold has dropped to RM141 per gram from RM156 per gram previously. As a result from the decrement of the prices of gold, many people tend to visit the gold shop to buy gold before the prices of gold rose again [3].This research paper will only specifically focus on the 916 gold. The researchers will analyze the 10 years data which is from 2003 till 2012 and will be analyzing using the Least Square Method (E-Views 7.0). Through time, gold price has its ups and down like any other investment instruments or commodities. It is impossible to deny that gold price is stable and has minimal fluctuation based on the volatility of economic and financial condition. In Malaysia, the awareness of people or investors has grown in the past few years. They started to realize the advantage of engage with gold trade.People will need to know the current gold price in order to take advantage on it where they can buy it at low

For this research, secondary data method has been used by the researchers, e.g. journals/articles/reports, websites and newspaper. The Table I shows the dependent and independent variables that been used in this study. The data is collected for 10 years starting from 2003 until 2012. The model that has been used to achieve the objective of this study is the Least Square Method.
TABLE I. DEPENDENT AND INDEPENDENT VARIABLE

Dependent Variable

Description

Notation

Prices of Gold

A precious metal commodity that serves as a store of value and a medium of exchange.

PGP

Independent Variable

Description

Notation

Crude Oil Prices Inflation Rates Exchange Rates Sources from [1]

Commodity CPI growth rate Currency exchange

LOIL LCPI LEXC

Manuscript received August 3, 2013; revised December 20, 2013.
©2014 Engineering and Technology Publishing doi: 10.12720/joams.2.1.38-41

Multiple linear regression models have been used as statistical tools for this study. This model was used to
38

Journal of Advanced Management Science Vol. 2, No. 1, March 2014

examine the real time effects of several independent variables towards the dependent variable that interval scaled. Multiple linear regression analysis aids in understanding how much of the variance in the dependent variable is explained by a set of predictors. This type of analysis is also being used to trace the previous sequential that cause the dependent variable through path analysis. This model is more appropriate to be used since it can explain the correlation between the dependent and independent variables much better. Econometric Views Software (E-Views 7.0) was used to generate the result from the data that have been collected. A. Model Specification Least Square Method is the model that has been used in this study. This model is modified from [1] on studied the determination of factor affecting the price of gold. This model is used to investigate the factors that affecting the price of gold in Malaysia. The model is as follows:

Views 7.0 (E-Views). The findings are the interpretation of data that are conducted by descriptive statistic and multiple linear regression tools. As mention in the previous chapter, the objective of this study is to determine the significance relationship between the variables. A. Descriptive Statistics For the descriptive statistic, the researcher comes out with the range of data which include mean, median, skewness, kurtosis and probability. Table II below showed the descriptive statistics for the output which comprises of three variables data for 10 years from year 2003 until 2012.
TABLE II. DESCRIPTIVE STATISTICS FOR FACTORS AFFECTING THE PRICES OF GOLD Crude Oil Gold Prices Prices Mean 4.32 4.31 -0.00 1.66 0.68 5.42 5.48 -0.86 2.77 0.54 0.73 0.81 -0.47 2.54 0.79 CPI Rates 1.24 1.25 -0.23 1.59 0.63 Exchange

Log PGP  0  1LOIL  2 LCPI  3LEXC   (1) where, LogPGP - Prices of gold (Dependent Variable) LOIL - Crude Oil Prices (Independent Variable) LCPI - Inflation Rates (Independent Variable) LEXC - Exchange Rates (Independent Variable) 1, 2 - The coefficient for the dependent variable 0 - The constant value  - Error terms B. Definition of Terms Gold is a precious metal which mankind that has a long and illustrious relation and continues to do so. Gold served as money until other forms of currency were devised and even now gold is bought as an investment. [4]. The crude oil is a mixture of naturally occurring hydrocarbons that is refined into diesel, gasoline, heating oil, jet fuel, kerosene, and literally thousands of other products called petrochemicals. Crude oils are named according to their contents and origins, and classified according to their per unit weight (specific gravity).[5] Inflation is the rate at which the level of prices for goods and services is rise and then purchasing power is fall. It usually happened annually. [6] Exchange Rates are rates which one currency may be converted into another. The exchange rate is used when simply converting one currency to another (such as for the purposes of travel to another country), or for engaging in speculation or trading in the foreign exchange market. There are a wide variety of factors which influence the exchange rate, such as interest rates, inflation, and the state of politics and the economy in each country. It also called rate of exchange or foreign exchange rate or currency exchange rate. [7] III. FINDINGS
Median Skewness Kurtosis Probability

This chapter will show the finding and result of the data that have been analyzed using the Econometric

The total observation includes in this study is 10 observations. The first variable is gold prices which the mean and median is 4.32 and 4.31 respectively and it near to each other according to the rule of thumb. The skewness value had shown negatively skewed with value -0.00. While the kurtosis value indicates 1.66 and probability value is 0.68, more than 0.05 of rules of thumb. Hence, probability is indicates that it is normal distribute. Second variable is crude oil prices which the mean and median is 5.42 and 5.48 respectively. The skewness value also shown negatively skewed which are -0.86.While for kurtosis value 2.77 and probability value is 0.54, more than 0.05 rules of thumb. Hence, the probability also normal distributed. The third variable is inflation rates (CPI). The mean and median is 0.73 and 0.81 respectively. The skewness value shown negatively skewed with the value is -0.47, while kurtosis value is 2.54. The probability value is 0.793, more than 0.05 and it followed the rules of thumb. Therefore, probability represents a normal distributed. Lastly, the variable is exchange rates which the mean and median are 1.24 and 1.25 respectively and shown that the value is almost same. The skewness also show negatively skewed that is -0.23, while for kurtosis value is 1.59. The probability value is 0.63 and also followed the rules of thumb, which more than 0.05. Therefore, the probability is a normal distribution.

©2014 Engineering and Technology Publishing

39

Journal of Advanced Management Science Vol. 2, No. 1, March 2014

B. Multiple Linear Regressions Below is the table that shows the result from the Multiple Linear Regression with Gold Prices as dependent variable. All results have been summarized in Table III.
TABLE III. FINAL FINDING OF MULTIPLE LINEAR REGRESSIONS R-squared = 0.969778 Variable Crude Oil 0.718902 Prices Inflation -0.246380 Rates Exchange -3.336433 Rates Constant 4.749398 2.030437 2.339102 0.0579 0.776199 -4.298430 0.0051 0.069799 -3.529850 0.0124 0.217443 3.306158 0.0163 Coefficient F-statistic = 64.1776 Beta () t-Statistic Prob

Note: Indicate significance: ***1% Level, **5% Level, * 10% Level

From this table, the R-Squared (R2) was 0.969778. This result indicates that 96.97% of the variance in gold prices was significantly explained by the three independent variables which are crude oil prices; inflation rates (CPI) and exchange rates. The remaining 3.03% were explained by other factor that not including in this study. The study also shown that there are strong correlations between the variance since R2 is almost 100%. The value of F distribution is 64.1776, whereby it more than 3 based on rules of thumb and P-value is 0.00006 < 0.01 in the table support that the relationship is significant. Thus the finding will reject the null hypothesis. The following finding and analysis will interpret the result for the independent variables and test on the hypothesis. Based on analysis between gold prices and crude oil prices (LOIL) in Table III, this study found that there is significant relationship between gold prices and LOIL with t-stat value is 3.3061 more than 2 based on their rule of thumb. While the significant value stand at 0.0163 on 5% significant level. The finding hereby will reject the null hypothesis for crude oil prices (LOIL). It also explained that there is a significant relationship between crude oil priced and gold prices. Meanwhile, this study found that there is significant relationship between gold prices and LCPI with t-stat value is 3.5298 more than 2 based on their rule of thumb. While the significant value stand at 0.0124 on 5% of significant level. Thus, based on the finding hereby will reject the null hypothesis for Inflation Rates (LCPI). It also explained that there is a significant relationship between inflation rates and gold prices. Lastly, based on analysis between gold prices and exchange rates (LEXC) found that there is significant relationship between gold prices and LEXC with t-stat
©2014 Engineering and Technology Publishing

value is 4.2984 more than 2 based on their rule of thumb. While the other side, significant value stand at 0.0051 on 1% of significant level. Thus, the finding shows that this will reject the null hypothesis for exchange rates (LEXC). It also explained that there is a significant relationship between exchange rates and gold prices. This study has achieved its objectives whereby, according to the result, Crude Oil Prices (LOIL), Inflation Rates (LCPI) and Exchange Rates (LEXC) were significantly related with gold prices in Malaysia. Meaning that, any changes in these three factors can reflect the changes of gold prices. The past study also found that there are strong relationship between the LOIL, LCPI and LEXC. The finding shows that mean, median, skewness, kurtosis and probability for all three independent variables followed the rules of thumb. According to the Table III, Crude Oil Prices have positive relationship while the Inflation Rates and Exchange Rates have inverse relationship. Positive relationship means that, when the Crude Oil Prices increase the gold prices also will be changes and increase too. This result is become stronger with the result of previous study done by [1], there are positive correlation between gold prices and oil prices. In addition, meaning negative relationship between Inflation Rates and Gold Prices is when the Inflation Rates increase, the Gold Prices will decrease. This result was supported with previous study done by [8] which is found that changes in inflation rates will cause immediate changes in gold prices. Lastly, Exchange Rates also have inverse relationship with Gold prices. When Exchange Rates increase, Gold Prices will decrease. According to [9] found that there is negative relationship between gold prices and Exchange Rates and the data were test with different method. But in contrast, as demonstrated in [10] found that Exchange Rates and Gold Prices have positive relationship because the entire test statistic has a positive sign by use vectorautoregressive (VAR) model. IV. CONCLUSION

As an overall conclusion from the findings result, this study achieve the objective and research question where to determine the effect of crude oil prices on the gold prices, to analyze the effect of inflation rates on the gold prices and to identify the effect of exchange rates on the gold prices. Even though all variable is significant with the Gold Prices, the result and the trend will become more reliable if researcher increases the sample such as for 20 years or 30 years. This suggestion was support by [11] that shows the larger data taken will give more accuracy of the result. In addition, researcher also recommended research on gold prices can be conduct in large scale such as adding other Macroeconomic Factor. This study is focus on inflation rates, crude oil prices, and exchange rates. Therefore, the researcher suggests adding more factors such as unemployment rate, political risk, gross domestic product and etc. This suggestion was support by [12] that unemployment rate, political risk, gross domestic product, and gold demand-supply could
40

Journal of Advanced Management Science Vol. 2, No. 1, March 2014

influence gold price as the price has been float in the international market. ACKNOWLEDGEMENT The authors would like to extend our acknowledgment for the support given by Institut Pengurusan Penyelidikan (RMI), Universiti Teknologi MARA, Malaysia for supporting us with a guide and advice that make us capable of accomplishing this research paper. REFERENCES
[1] C. Toraman, C. Basarir, and M. F. Bayramoglu, “Determination of factors affecting the price of gold: A study of MGARCH model,” Business and Economics Research Journal, vol. 2, no. 4, pp. 37-50, 2011. S. Morgan and S. Goldman, “Gold bull run,” Malaysian Reserve, 2013. N. N. Nadzari. (April 23, 2013). [Online]. Available: http://www.utusan.com.my A. H. Michael, International Monetary Economics, Longman, Green & Co. Ltd, 2007. K. S. Jomo, F. Greg, and R. Rajah, “Industrial technology development in Malaysia: Industry and firm studies,” Rouledge Studies in the Growth Economies of Asia, p. 389, 1999. G. S. Gupta, Macroeconomics Theory and Application, Tata Mcgraw, Hill Publishing Company Limited, 2004. D. D. E. Martin, Exchange-Rate Dynamics, New Jersey: Princeton University Press, 2011. L. E. Blose, “Gold prices, cost of carry, and expected inflation,” Journal of Economic and Business, vol. 62, pp. 35-47, 2010.

[12] S. M. H. Fauzi, “Gold price and it relationship with U.S. macroeconomic variable,” Faculty of Business Management, pp. 1-33, 2012.

Siti Nurulhuda Ibrahim was born in Pasir Mas, Kelantan on the 23rd of February 1983. She holds Master in Business Administration (Entrepreneurship) from Universiti Malaysia Sabah, Malaysia (2007) and a Bachelor of Business Administration (Islamic Banking) from University Teknologi Mara, Dungun, Malaysia (2005). She has been a lecturer since 2008 at UiTM, Bandaraya Melaka and has published a research in her area of specialization. Her main areas of research interests are Islamic banking, Microfinance and Islamic entrepreneurship.

[2] [3] [4] [5]

[6] [7] [8] [9]

Nurul Izzat Kamaruddin was born in Kuala Lipis, Pahang on the 23rd of February 1982. She holds Master in Business Administration from Universiti Teknologi Mara, Malaysia (2008) and a Bachelor of Business Administration (Finance) from University Teknologi Mara, Malaysia (2006). She has been a lecturer since 2009 at UiTM, Bandaraya Melaka and she has produced an academic research paper related to the finance industry. Her main areas of research interests are Corporate Finance, Microfinance and Social Science.

H. Shahzadi and M. N. Chohan, “Impact of gold prices on stock exchange: A case study of Pakistan,” in Proc. 3rd

SAICON International Conference on Management, Business Ethics and Economics, Pakistan, 2011. [10] M. Massimiliano and Z. Paolo, “Gold and the U.S Dollar: Tales from the turmoil,” Department of Economics, University Bologna and Rimini Centre for Economic Analysis (RCEA), 2010. [11] D. M. Martiani and K. Rahfiani, “The effect of financial ratio, firm size and cash flow from operating activities in the interim report to the stock return,” Chinese Business Review, vol. 8, no.6, pp. 44-55, 2009

Rahayu Hasan was born in Batang Tiga, Melaka on the 8th of May 1968. She was conferred Master in Business Administration (Management) from Universiti Kebangsaan Malaysia (UKM) in August,2007 and Bachelor of Commerce (Accounting) from Dalhousie University, Halifax, Canada. She worked as a lecturer in Kolej Teknologi Islam Melaka, Malaysia after her graduation from Canada before continuing her studies from 2005 to 2007 in UKM Bangi. Now she is working as a lecturer in Universiti Teknologi Mara (UiTM), Melaka since July 2009.

©2014 Engineering and Technology Publishing

41

Similar Documents

Premium Essay

The Relationships Among Determinants of the Gold Price in Malaysia

...RESEARCH TITLE The relationships among determinants of the gold price in Malaysia RESEARCH OBJECTIVES 1. To determine the relationship between USD-MYR exchange rate on the Malaysian gold price. 2. To determine the relationship between the price of crude oil on the Malaysian gold price. 3. To determine the relationship between the Malaysian Gross Domestic Product on the Malaysian gold price 4. To determine the relationship between inflation rate on the Malaysian gold price. 5. To determine what are the stronger factors influencing the price of gold in Malaysia LITERATURE REVIEW There are number of group studies literature related with the functions gold has in the economy. The first group includes the literature showing how gold price is affected by macroeconomic news (Dooley et al., 1995; Fortune, 1987; Sherman, 1983; Sjaastad and Scacciallani, 1996; Wang and Lee, 2011). These studies investigate the relation of gold price with economic variables which includes inflation, interest rate, exchange rate etc. Second group includes the literature focusing on the examined the influencing factors in the variations of the gold price (Diba and Grossman, 1984; Pindyck, 1993; Baker and Tassel, 1985). Third group includes the literature aiming on the advantage of using gold in diversifying risk for a long-run portfolio (Chua et al., 1990; Sherman, 1986; Michaud et al., 2006; Ciner, 2011; Jaffe, 1989). Fourth group includes the literature focusing on the inflation...

Words: 1395 - Pages: 6

Premium Essay

Factors Affecting Gold Price in Malaysia

...Scientific Research www.textroad.com Factors Affecting the Price of Gold in Malaysia Hanif Zakaria, Nabilah Abdul Shukur, Salwani Affandi, Wan Mansor Wan Mahmood Faculty of Business Management Universiti Teknologi MARA, Dungun, Terengganu, Malaysia Received: March 9, 2015 Accepted: June 16, 2015 ABSTRACT Gold is a precious metal which serves as both financial and real assets. The value of gold in the society goes more than just economic, as it is also treasured as a storage and display of mammon and culture.Of late, the price of gold is not stable in which it tends to oscillatecontingent on the economic condition. In the long-run, its prices keep increasing due to high demand and inadequate supply worldwide. However, in the short-run, its price seems to be volatile due to various potential reasons. Therefore, this study was conducted to determine the factors influencing gold prices in Malaysia. In order to achieve the objective, Stata software was used to assess the prospective relationships between the gold prices as the dependent variable and the inflation rate, interest rate and exchange rate as independent variablesby using Pooled Ordinary Least Squares (POLS) methodology. The monthly data employed in this study spans across a 14 years period from year 2000 until 2013. The results revealed that the rates of inflation, exchange and interest were significantly related with gold prices in Malaysia in different magnitude and direction.It is empirically proven...

Words: 3969 - Pages: 16

Premium Essay

Ar Rahnu

...Financial Services Board (IFSB), the Ar- Rahnu scheme can demonstrate its roles as a viable microcredit product of the financial institution in meeting the different customer requirements. Firstly, it represents a credit channel to those who want to use Ar-Rahnu scheme to obtain financial resources to meet their daily financial requirements; and secondly, it can be a credit channel to those who requires temporary working capital, particularly for small business. The objective of Ar-Rahnu is to create an alternative financing channel to the conventional pawn broking, that is not only more transparent but it also more compliant with Shari’ah principles. Ar-Rahnu is a form of microcredit product the borrower places their valuable assets such as gold or jewellery as collateral for the financing. In conventional pawn broking, the interest is charge based on the loan. On the other hand, Ar-Rahnu has no interest but it charges on safekeeping service. 1.2 BACKGROUND OF THE ORGANIZATION 1.3.1 BANK RAKYAT Bank...

Words: 4954 - Pages: 20

Premium Essay

Determinants of Ar-Rahnu Profit

...Financial Services Board (IFSB), the Ar- Rahnu scheme can demonstrate its roles as a viable microcredit product of the financial institution in meeting the different customer requirements. Firstly, it represents a credit channel to those who want to use Ar-Rahnu scheme to obtain financial resources to meet their daily financial requirements; and secondly, it can be a credit channel to those who requires temporary working capital, particularly for small business. The objective of Ar-Rahnu is to create an alternative financing channel to the conventional pawn broking, that is not only more transparent but it also more compliant with Shari’ah principles. Ar-Rahnu is a form of microcredit product the borrower places their valuable assets such as gold or jewellery as collateral for the financing. In conventional pawn broking, the interest is charge based on the loan. On the other hand, Ar-Rahnu has no interest but it charges on safekeeping service. 1.2 BACKGROUND OF THE ORGANIZATION 1.3.1 BANK RAKYAT Bank...

Words: 4954 - Pages: 20

Premium Essay

Marketing Management

...Management 1.0 Executive Summary The main objectives of this study was to choose one determinant that have influence on consumer behavior. There are three sub sections of this study based on the main objectives. First is to discuss the origin and how the determinants influences the consumer. Second is the usefulness of the determinants for marketer in explaining consumer behavior. Third, the specific product that suited the determinant chosen. Next sections will explain in details work undertaken in completing each sections 1.3 Suitable product for the factors Last topic of this study is too choose suitable product based on the factors. In order to decide the product, I will analyze the factor in details to identify the most important aspect. Based on the analysis, I will choose the most suitable product. The aims for this sections is to analyze the relationship between the products and the determinants. In additions, I will choose product from Malaysia industry. This is done through sales and report status on Malaysia news and article. 1.4 Evidence To support subject and topic above, several examples will be given. This examples will be the supporting arguments to either denies or confirm the subject. Evidence will be collected from past research, event and study. Evidence will used to covers all sections of the study, especially on proving the theory and practicality of the determinant. 1.5 Observations and Commentary Observations and commentary will be conducted after...

Words: 4240 - Pages: 17

Premium Essay

Sustainable Competitive Advantage for Market Leadership Amongst the Private Higher Education Institutes in Malaysia

...2 INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (2 ICBER 2011) PROCEEDING nd nd SUSTAINABLE COMPETITIVE ADVANTAGE FOR MARKET LEADERSHIP AMONGST THE PRIVATE HIGHER EDUCATION INSTITUTES IN MALAYSIA Loh Teck Hua KDU University College Business School Section 13 Campus, 76, Jalan Universiti, 46200, Petaling Jaya, Selangor DE ABSTRACT One of Malaysia’s economic goals is to become an education hub for the region. To achieve this, the Malaysian government had liberalised government policies resulting in the proliferation of Private Higher Education Institutions (PHEIs) including private Universities and University Colleges. As competition intensifies it becomes increasingly pertinent to ask “What sustainable competitive advantage should the Private Higher Education Institutions (PHEIs) have to achieve market leadership in the Malaysian education industry?” For the smaller PHEIs, it is a question of survival itself. This paper aims to provide a theoretical study of some of the key strategic activities of the leading PHEIs to answer this question. The literature review covering both foreign and local sources indicates three key factors of sustainable competitive advantage, i.e. branding and image, the physical aspects of higher education including location and facilities, and the mode of delivery. The paper will seek to identify these factors amongst the market leaders to ascertain the validity of the secondary data via critical analysis of their activities. The...

Words: 11731 - Pages: 47

Free Essay

Gold Investment

...the internal/external environment * SWOT analysis in relative comparison to current competitors * Your intended business strategy * Justification to support your intended strategy Sound and Solid Investment MOHAMMAD HATTA & PARTNERS INVESTMENT SERVICES (SAMPLE) ------------------------------------------------- SAMPLE Disclaimer: This is a sample business plan which is prepared as part of the assignment for Strategic Management Class. The reference is made to Public Gold. Some data are fictitious in order to capture the main purpose of this class that is to apply Strategic Management in business - Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives. CONTENTS 1. BACKGROUND OF BUSINESS VENTURE 2. EXECUTIVE SUMMARY 3. GENERAL COMPANY DESCRIPTION 4.1. COMPANY OVERVIEW 4.2. MISSION AND VISION 4.3. STRENGTHS AND CORE COMPETENCIES 4.4. CHALLENGES 4. INDUSTRY ANALYSIS Question 1: What Are the Industry’s Dominant Economic Features? Question 2: How Strong Are Competitive Forces? Question 3: What Forces Are Driving Industry Change and What Impacts Will They Have...

Words: 4475 - Pages: 18

Premium Essay

Starbucks Coffee a Case Study

...opening its first store outside of North America in Japan. Opening globally made Starbucks Coffee Company to record total net revenues of USD 9.8 billion for its business sales and operation. One of the Starbucks Coffee Company globally expansion market is Malaysia Food and Beverages Industry. Starbucks Coffee Company expanded to Malaysia in year 1998. The mode of entry of Starbucks Coffee Company to Malaysia expanding and operating its business through the mode of licensing. Berjaya Corporation Berhad is the company that obtained the license to operate Starbucks Coffee Company locally. Berjaya Starbucks Company Sdn. Bhd. Is formed and jointly owned by Starbucks Coffee International and Berjaya Corporation Berhad. Starbucks Coffee Malaysia opened its first store on 17th December, 1998 at KL Plaza Bintang, Kuala Lumpur. The business of Starbucks Coffee Malaysia basically are selling of espresso and coffee beverages, non-espresso and coffee beverages, coffee-related accessories and equipment, gift and merchandise, souvenirs, pastries and confessions. To date, in Malaysia itself, Starbucks had more than 141 stores operating the coffee business, and more than 700 stores across six Southeast Asian markets, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and, most recently, Vietnam. 2. WHAT IS MARKET SEGMENTATION Market segmentation is a process of dividing a market into distinct groups of buyers with different...

Words: 4629 - Pages: 19

Premium Essay

Structure and Performance of National Economies and the Policies That Governments Use to Try to Affect Economic Performance: China

...INTRODUCTION The objective of this mini project is the study the structure and performance of national economies and the policies that governments use to try to affect economic performance. Important topics in this mini project include the determinants of long-run economic growth, unemployment, inflation, and macroeconomic policy. In addition, this mini project are also able us to know the measurement of the standard living of a country in term of productivity, efficiency and effectiveness. Besides that, we are also able to determine what is measured by Gross Domestic Product, Inflation and etc as well as know how the government policy could contribute to improved productivity of the country. The picture below shows the brief idea how does Indonesia looks like. Picture 1: Tourism in Indonesia’s island Picture 2: Place to travel in Indonesia Picture 3: City in Indonesia Picture 4: Map of Indonesia Choose one country of the world The chosen country was Indonesia. The reason of Indonesia been chosen because Indonesia is given public an image that Indonesia is a lag behind country than other since there was a tragic event happened in Indonesia in the middle of 1997 all along. This causing Indonesian suffered a great deal and many of them have experienced a very large decline in their living standard. It was irony in Indonesia’s case seen a country...

Words: 8104 - Pages: 33

Premium Essay

Analyzing Key Determinant Online Purchase

...Asia Pacific Journal of Marketing and Logistics Emerald Article: Analyzing key determinants of online repurchase intentions Chai Har Lee, Uchenna Cyril Eze, Nelson Oly Ndubisi Article information: To cite this document: Chai Har Lee, Uchenna Cyril Eze, Nelson Oly Ndubisi, (2011),"Analyzing key determinants of online repurchase intentions", Asia Pacific Journal of Marketing and Logistics, Vol. 23 Iss: 2 pp. 200 - 221 Permanent link to this document: http://dx.doi.org/10.1108/13555851111120498 Downloaded on: 08-10-2012 References: This document contains references to 46 other documents Citations: This document has been cited by 1 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 3054 times since 2011. * Users who downloaded this Article also downloaded: * Yu-Hui Fang, Chao-Min Chiu, Eric T.G. Wang, "Understanding customers' satisfaction and repurchase intentions: An integration of IS success model, trust, and justice", Internet Research, Vol. 21 Iss: 4 pp. 479 - 503 http://dx.doi.org/10.1108/10662241111158335 Chao-Min Chiu, Chen-Chi Chang, Hsiang-Lan Cheng, Yu-Hui Fang, (2009),"Determinants of customer repurchase intention in online shopping", Online Information Review, Vol. 33 Iss: 4 pp. 761 - 784 http://dx.doi.org/10.1108/14684520910985710 Hong-Youl Ha, Swinder Janda, Siva K. Muthaly, (2010),"A new understanding of satisfaction model in e-re-purchase situation", European Journal of Marketing, Vol. 44 Iss: 7 pp. 997...

Words: 10031 - Pages: 41

Premium Essay

Guide Acnb

... Figure 1: AirAsia’s Perceptual Map 15 6.0 CUSTOMER ANALYSIS 17 7.0 INTERNAL CAPABILITIES & CORE COMPETENCIES 19 Table 8: Comparison of Malaysia’s Top Players in Low Cost Carriers’ Marketing Program 20 9.0 FINANCIAL AND MARKETING EVALUATION OF AIRASIA 23 9.1 Evaluation of AirAsia’s financial status using 2007 and 2008 annual reports 23 Table 9 : AirAsia’s financial status in 2007 and 2008 23 9.2 Financial Evaluation for AirAsia as compared to Malaysia Airline [MAS]. 24 Table 10 : AirAsia’s financial status as compared to MAS in 2007 and 2008 24 9.3 Marketing Metrics 25 Table 11: Marketing metrics 25 10.0 PROBLEM IDENTIFIED AND THE ALTERNATIVES 25 11.0 REFERENCE LIST 27 1.0 INTRODUCTION AirAsia is a low cost carrier [LCC] based in Kuala Lumpur [KL], Malaysia. Tony Fernandes founded AirAsia in 2001 which has expanded rapidly into an award-winning and profit-yielding company, grabbing the title of World’s Best Low Cost Airline by Skytrax (AirAsia, 2009a). From hubs located in Malaysia, Thailand and Indonesia, more than 400 flights operate to 61 domestic and international destinations utilising a fleet of...

Words: 7056 - Pages: 29

Premium Essay

Exchange Rate

...-------------(((((------------- SUBJECT INTRODUCTION TO BANKING AND FINANCIAL Value of VND compared with ASEAN member currencies? Facts LECTURE: TRAN LINH DANG STUDENTS OF TC201DE01-0100 1. Phan Nguyễn Ngọc Xuân Mỹ 101537 2. Vũ Thị Hường 101574 3. Trương Linh Trang 101579 4. Nguyễn Đỗ Thiên Trang 093304 2012 – 2013 -------------(((((------------- SUBJECT INTRODUCTION TO BANKING AND FINANCIAL Value of VND compared with ASEAN member currencies? Facts LECTURE: TRAN LINH DANG STUDENTS OF TC201DE01-0100 1. Phan Nguyễn Ngọc Xuân Mỹ 101537 2. Vũ Thị Hường 101574 3. Trương Linh Trang 101579 4. Nguyễn Đỗ Thiên Trang 093304 Note for faculty: Date: ___/___/___ For the writer: (Signature & full name) 2012 – 2013 CONTENTS CONTENTS i INTRODUCTION ii I. Exchange rates 1 I 1. Exchange rates 1 I 2. Exchange rate regimes 2 I 3. Roles of exchange rates 3 II. Compare and contrast between the value of VND and the others of ASEAN 5 II 1. The exchange rates in Vietnam from 2008 to 2010 6 II 2. The exchange rates in Vietnam in 2011 8 III. Impacts on exchange rates 10 III 1. Balance of Trade 10 III 2. Balance of Payments 11 III 3. Monetary Policy 12 III 4. Differentials in Inflation 12 III 5. Differentials in Interest Rates 12 III 6. Public Debt 12 III 7...

Words: 6250 - Pages: 25

Premium Essay

Macro Economics Assignment

...I. HISTORY OF DEVALUATION OF INDIAN RUPEE (INR) AND ITS IMPACTS ON INDIAN ECONOMY                                                                                                                                  In a fixed exchange rate regime the term ‘Devaluation’ is used. It means a deliberate downward adjustment of a country's official exchange rate by its government i.e. central bank (RBI in India) relative to other currencies; Where as in floating or fluctuating exchange rate currency's value is allowed to fluctuate according to the foreign exchange market. In this case, it is known as Depreciation. There are two implications for currency devaluation. * First, Devaluation makes a country's exports relatively less expensive for foreigners and * Second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit. Revaluation: This term is used in a fixed exchange rate regime; it means a deliberate upward adjustment to a country's official exchange rate relative to other currencies. In floating exchange rate, it is known as Appreciation. The Liberalized Exchange Rate Management System (LERMS): LERMS was introduced in March 1992 involving the dual exchange rate system in the interim period. The dual exchange rate system was replaced by a unified exchange rate system in March 1993.  History of Devaluation The Indian rupee, which was on par with the...

Words: 16590 - Pages: 67

Premium Essay

Reward Management

...Employee's rewards ukessays.com /dissertations/management/employees-rewards.php CHAPTER 1 INTRODUCTION 1.0 Overview In any organization, employee's rewards usually given to attract, motivate and retain the employees to stay longer and contribute a good quality services to ensure the successful of the organization; in other words, rewards play an important role in creating, building and maintaining the commitment among employees with the purpose to ensure high standard of performances and workforce stability. According to the individual - organizational exchange theme, individuals enter the organization with special qualification and skill, desire and goals, and expect in return a work setting where they can use their skill, satisfy their desire, and achieve their goals (Mottaz, 1988). At the minimum, employees expect their organization to provide fair pay, safe working condition, and fair treatment. (Beer, Spector, Lawrence, Mills, & Walton, 1984). It simply implies that employees offer or increase their commitment when organization meets employees' expectation regarding fulfillment of their important needs. Thus, the exchange perspective explains organizational commitment as a function of work rewards and work values (Lambert, 2000; Mottazz, 1988), and suggests the importance of work rewards for continuously encouraging employees. According to exchange theory and reciprocity norm, employees repay the rewards received from organization through increase commitment to the organization...

Words: 10671 - Pages: 43

Premium Essay

The Effect of Energy Prices on Transportation and Storage Sector’s Equity Returns: the Iranian Case

...THE EFFECT OF ENERGY PRICES ON TRANSPORTATION AND STORAGE SECTOR’S EQUITY RETURNS: THE IRANIAN CASE by ABSTRACT The purpose of this study is to examine the effect of oil and gas prices on transportation and storage sector’s equity returns in Iran. To this end, we analyze Iranian transportation and storage sector index for the period from the first week of January 2005 until the third week of March 2010. Based on the multifactor model and using time-series regression, our findings indicate that oil price is not an important determinant of returns in transportation and storage sector. Similarly, the findings suggest that gas price movements do not seem to play a role for transportation and storage sector. However, consistent with the capital asset pricing model (CAPM), the market portfolio is a significant pricing factor in the sector’s stock returns. In addition, the estimated regression indicates that the exchange rate is not priced for this sector’s stock returns. The results of this study help domestic and potential foreign investors to understand the effect of energy price changes on transportation and storage sector stock returns in order to manage their portfolio effectively. KEYWORDS Energy prices, Transportation and storage sector, Equity returns, Iran INTRODUCTION Recent years have witnessed massive price movements of the energy markets. The price of energy has a large impact on economy of the world (Huang et al., 1996; Nandha & Brooks, 2009; Chen et al., 1986; Nandha...

Words: 4747 - Pages: 19