Australia Pre-Primary Education Industry Essay Example for Free

Australia Pre-Primary Education Industry Essay Rising Traction of Private Players to Foster Growth of Australia Pre-primary Education Industry: Ken Research The pre-primary education and childcare markets in Australia have showcased separate growth trajectory over the years. The pre-primary market in Australia is an emerging market characterized by the rising awareness about the quality early childhood education and care amongst parents. Although the public spending on the pre-primary education in Australia is amongst the lowest spending countries in the OECD, the government has taken substantial steps to promote the access and the importance of the pre-primary education amongst the masses. The regional pre-primary markets in each of the state or territory differ from another as the governing system is decentralized. Henceforth while the market-run kindergartens account for a dominant share in the states such as New South Wales, Victoria and Queens land, in states including Western Australia, South Australia, Tasmania, Australian Capital Territory and Northern Territory, a vast majority of preschools are government funded and run. Subsequently, the format of education and age-group of the children varies accordingly. The childcare market in Australia is a developed and matured market and is marked by a high degree of fragmentation. The childcare market caters to children aged up to twelve and has experienced a steady growth in the last six years, propelled by high demand prevailing in the market. In the last few years, childcare market has been increasingly recognized by the government as a means of increasing womens employability in the workforce. Henceforth, various provisions such as Child Care Rebates, Child Care Benefit have been provided, which has encouraged increasing enrollments in this sector. The market revenues of the childcare market have increased from USD 7,081. 6 million in FY’2008 at a CAGR of 5. 6% during FY’2008-FY’2012. The marketplace of pre-primary education and childcare industry in Australia has witnessed a growing number of market players after the fall of the market leader ABC Learning in FY’2008. A majority of the ABC centers was taken over by Goodstart Learning, a nonprofit organization, which accounted for ~% of the market share of the childcare market in FY’2012. Other major players include G8 education and KU children services. The market has showcased an increasing number of profit-making players over the years, owing to the growing attractiveness of the market. With the increasing number of Long-day care centers providing preschool education, the pre-primary education market of Australia has been reflecting signs of growing integration with the childcare market. As the number of nuclear families and women workers has grown in the Australian economy, the dependency on child care has also consequently increased, leading to many preschools providing child care services as well. The report â€Å"Australia Pre-primary Education and Childcare Industry Outlook to FY’2017† provides detailed overview on the pre-primary education and childcare industry from various perspectives. The report encloses a comprehensive analysis of the various segments of the market reflecting the present scenario and future growth affected by changing industry dynamics in coming years. Additionally, the report also entails information about the public and private sector initiatives, rational analysis of the macroeconomic factors, along with the profiles of the major market players of the pre-primary education and childcare industry. The report will help industry consultants, companies and other stakeholders to align their market centric strategies according to ongoing and expected trends in future. For more information on the industry research report please refer to the below mentioned link: http://www. kenresearch. com/education/pre-school-education/australia-pre-primary-educationresearch-report/398-99. html The report titled â€Å"Australia Pre-Primary Education and Childcare Industry Outlook to FY’2017Increasing Influx of Private Players to Foster Industry Revenues† provides a detailed analysis of the preprimary education and childcare industry covering various aspects including market size of pre-primary education and childcare markets in terms of revenues, enrollments, establishments and number of teachers, and market segmentation on the basis of gender and region-wise enrollments and type of funding institutions along with ongoing trends in the industry. The report also includes competitive landscape and profiles of the major players operating in the industry. The future projections are included to provide an insight on the prospects in the Australia childcare market. The pre-primary and childcare industry of Australia is a diverse market which has undergone significant changes over the years. The pre-primary education and childcare markets in Australia are distinguished by the age-group of the target population and the mode of education. The childcare market of Australia is a matured market serving to children aged up to twelve. The type of services provided in the Australian market is quite diverse catering to the various needs and requirement of the families. The revenues of the child care market have grown strongly over the years, with supply largely keeping in pace with demand. Over the past years, child care in Australia has evolved from a form of early learning and education to a key mechanism to support labor force participation. The market for the childcare is competed by private businesses, communities and government run centres. The pre-primary education market of Australia is an emerging market marked by low penetration of the services. The enrollment rates for the children aged 3 and above are still very low. The formats and settings for preschool education in Australia vary from one state or territory to another with departments of education responsible for governing the preschool sector each state. Consequently, the market setting of pre-primary education sector is assorted, with Queensland being one of states which has mandated the admission in the pre-primary education for young kids. Preschool programs in Australia are run by both government and non-government services, including community preschools and child care providers. The competitive landscape of the Australia pre-primary and childcare industry is quite fragmented which has witnessed increasing market entries over the years after the fall of ABC Learning in FY’2008, the market leader the industry. Presently, the childcare market of the industry features a number of players which operate on non-profit basis. However, the increasing influx of the profit-making players has been driving the revenues of the market in recent years. Goodstart Learning, G8 education and KU children services constitute some of the major players of the industry. The pre-primary education and childcare industry in Australia has been witnessing growing integration of the pre-primary and childcare markets with the increasing number of Long day care centers with preschool programs in the country. Preschools with childcare facilities are increasingly becoming a common phenomenon, with increasing trend of customized services being offered by the providers. Computer-based education has also entered into the preschool segment, reflecting the increasing quality of the education imparted.

Factors Influencing Stock Prices in Indonesia Exchange

Factors Influencing Stock Prices in Indonesia Exchange There are many definitions of stock with different point of view. Bernstein states that stocks are partial ownership of companys assets which are subordinated with debt (Bernstein, R. 2002). Stock is a device that implies an ownership position in a company and signifies a claim on its proportional share in companys assets and profits. Only certain companies have stock called corporation. Limited partnership and Sole proprietorship do not issue stock (WebFinance, Inc., 2010). According to Vernimmen et al. (Vernimmen et al. 2009, p. 527), A stock or a share is a security that is not redeemed. The investment can only be recognized through disposal and whose revenue flows is uncertain. Corporations need financial resources and this required resources usually come from ordinary or common stocks, preferred stocks, and medium to long term lenders or debenture holders. Common stock is everlasting capital for the corporation. The owners who invest in this type of stock are called ordinary or common shareholders and any profit retained after paying debenture interest will be distribute to them called dividend. Preferred stocks are issued to public in order to acquire capital and these stocks have rights to specified yearly fixed percentage dividend on the paid-up capital. Preferred stocks are less common in stock market (Anandarajah, Aseervatham, and Reid 2005). The following are the characteristics of common stock and preferred stocks: (Scott et al. 1999). Preferred Stock A hybrid security which has similar characteristics to bonds and common stocks. It is similar to bonds in its dividends which are limited in amount. It is similar to common stocks in that it has no fixed maturity date, dividends are not deductible in terms of tax purposes, and non-payment of dividends will not cause bankruptcy. Common Stock. Common stock shares imply an ownership in corporation which does not have maturity date and exists as long as the firm does. Stock exchange is an organization which helps connection between potential buyers and potential sellers of stocks. Stock exchange can be physical place, network of computers, system of telephone link, etc. A stock market is a place where stocks can be purchased and sold (Samuel, J.M., Wilkes, F.M., and Brayshaw, R.E. 1996). Most of countries around the world have stock exchanges. The number of stock exchanges around the world is growing significantly. Based on continents, stock exchanges around the world can be divided into 6: Africa, Asia, Europe, Middle East, North America, and South America. Indonesia Stock Exchange called IDX is one of the stock exchanges in Asia (Stock Exchanges Worldwide Links, n.d., 2010). Principally, there are 2 advantages are obtained by investor who buying or having stocks in stock exchanges (Indonesia Stock Exchange, 2007): Dividend. Dividend is sharing profit awarded by a company because of holding stock for a relatively long period until ownership term is in period where an investor is recognized as shareholder who has right to get dividend. Capital Gain. Capital gain is the difference between selling price and buying price acquired from trading activities. Those advantages cause investors choose stocks as an attractive alternative than put their money in fixed deposits that have low interest rates (Chuan, 2004). Basically, investors who buying or having stocks will also have some risks (Indonesia Stock Exchange, 2007): Capital Loss. Capital loss is a situation when an investor is selling the stocks at lower price than the buying price. Liquidity Risk. A company with shares held by public is declared for its bankruptcy by the Court. Shareholders or investors will have the last priority of claiming their rights after all liabilities are fulfilled. The rest of the companys wealth will be shared proportionally to the shareholders. Shareholders will not obtain anything from the liquidation if there is no rest left. The overall price movements of common stocks of corporations traded on stock markets are called stock market price indexes. Corporate stockholders will get benefit from company through dividends and have right to vote in company. Investors capital gains and losses will affected by increasing and falling of stock prices (Frumkin 2000). Norman (Frumkin, N. 2000, p. 277) states that The dividend yield, which is the rate of return on a share company stock, is a companys annual cash dividend percentage of companys annual stock price. Nowadays, the price of stocks in Indonesia Stock Exchange is changing rapidly. The average price of stocks in Indonesia Stock Exchange increased significantly (approximately 20%) during 2006. The average price decreased approximately 19% during January 2008 and declined again approximately 16% during March 2008. The significant change of stock prices in Indonesia Stock Exchange is caused by external environmental factors or macroeconomics factors (Frensidy, B. 2008). There are many external environmental factors that impact financial system including stocks. Those factors are economic growth, inflation, exchange rates, interest rates, etc (Evans, et al. 2000). Many investors lost their money because of the significant change of stock prices in Indonesia Stock Exchange. Investors lost their capital because they sell their stocks at lower price than the buying price (Indonesia Stock Exchange, 2007). By analyzing external environmental factors, investors can predict the future price of stocks more accurately. To minimize the risk or capital loss, investors have to understand external environmental factors influencing stock prices in order to make correct decision whether they have to buy, sell, or hold the shares. The research will identify external environmental factors which have significant influence on stock prices and explain the relationship between those factors and stock prices in order to accomplish that goal. Objectives, Research Question, and Research Hypotheses The objectives of the research are: To identify the variables of external environmental factors influencing the stock prices in Indonesia Stock Exchange. To analyze the influence of external environmental factors on stock prices in Indonesia Stock Exchange. Based on the objectives, the research questions are as follow: Which external environmental factors influence stock prices in Indonesia Stock Exchange? How does external environmental factors influence on stock prices in Indonesia Stock Exchange? Based on the research question, the research hypotheses are built up: External environmental factors encourage the change of stock prices in Indonesia Stock Exchange. External environmental factor have strong correlation with stock prices in Indonesia Stock Exchange. Scope This research study will focus on external environmental factors influencing the stock prices in Indonesia stock exchange, which will be explained more briefly in chapter 2 literature reviews. Some external environmental factors influencing stock prices are applied to explain the correlation between external environmental factors and stock prices in Indonesia Stock Exchange. The analysis of what kind of relationship (positive or negative) between external environmental factors and stock prices will also be clarified in this research. The literature reviews will consist of some external environmental factors which influence stock prices especially in Indonesia Stock Exchange. A survey will be performed in order to collect data about the change of several external factors and stock prices in Indonesia Stock Exchange. Based on collected data, a model will be offered to analyze the relationship between stock prices and external environmental factors. Lastly, this research will be limited and focused on the following: The research is only focused on JSX composite index or (Indonesian: Indeks Harga Saham Gabungan, IHSG). This research is only focused on external environmental factors which influence stock prices. The data collection period of this research is 5 years from 2005 to 2009. Chapter 2 LITERATURE REVIEW Literature Review of External Environmental Factors and Stock Prices in Indonesia Stock Exchange This chapter will summarize external environmental factors which influence stock prices. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, the major external environmental factors influencing stock prices in Indonesia Stock Exchange will be provided in this chapter. Categories of Stocks and Types of Orders In the market, there are various names of stocks that refer to different categories of stocks (Chuan, 2004): Figure 2.1 Categories of Stocks Source: adapted from Chuan, 2004 Blue Chips refer to stocks that are steady with good fundamentals. Undervalued Stocks refer to stocks which are well-established by companies with solid balance sheet. Such stocks are generally unnoticed by investors, traded with small volume, and receive little reporting from media and analysts or experts. Growth Stocks refer to stocks which are established by recognized companies that have high growth sectors and their business are predicted to enlarge quickly over the coming years. Such stocks are generally traded with higher PER (Price Earnings Ratio) even though they lack of history of strong earnings base. While companies show continual rise in their earnings, the price of these stocks will increase. Penny Stocks refer to stocks that have small capitalization and traded bellow one dollar. Small-Cap Stocks refer to stocks that have very few issued shares and traded in low price at stock market. Such stocks are usually not bought by foreign institutions and funds. Small-Cap Stocks have some risks as follow: Smaller companies tend to less flexible to major crisis because they are less diversified and more prone to market shocks and monetary crisis. Trading volumes are low and less liquid. Therefore, investors may not find the buyers in stock market when they want to sell the stocks. Small-Cap Stocks are more sensitive to news and rumors. There are 3 types of orders used in the buying and selling of stocks as follow (Chuan, 2004): Market Order Market order is an order to buy or sell stocks instantly at the best current price. For example, investors place market order to sell AAA shares. It means investors buy AAA shares at current offering price. Limit Order Investors which place limit order will set a certain suitable price to buy or sell a particular stock. Stop Order Stop order is an order to buy or sell the stocks that are traded at certain price level immediately. This certain price level is known as stop price. For instance, investors place stop order to buy AAA shares at $5.00. If AAA shares begin to trade at $5.00, the order becomes market order and broker will buy shares at the best current price. In terms of selling stop order, the order is placed bellow current price to help investors decrease their possible losses and keep their profit. Timing and Stock Investment Investor would discourage when the price of their stocks decreased significantly after they had bought the stocks or to be trapped in market crash after they had invested their money in the stock market. Good timing is the most crucial factor for investors in stock market. Even the best stocks will become useless investments if investors buy them at wrong time (George, A. 2008). The major problem is good timing cannot be determined easily because stock market is influenced by large amount of factors and events that are beyond prediction. Investors have to understand factors influencing stock price and involve some insight to determine good timing whether they have to buy, sell, or hold their stocks (Chuan, 2004). In stock investment, price is mechanism by which practically all goods and services are exchanged. In this case, price has strong power or price is a king because price will determine whether stocks become excessively expensive or inexpensive (George, A 2008). The price of stocks tends to increase when there are more buyers than sellers in stock market. Buyers are tense in stock market based on expectation of future price increase. There are some signals which make buyers believe that future stock price will increase (Chuan, 2004): Positive indication from market trend. Rumors in stock market. Information concerning better earnings prospects for company. External Environmental Factors Influencing Stock Prices There are several external environmental factors influencing the uptrend or downtrend of stock prices in stock market. Those external environmental factors are: Worldwide stock market. Local economy. Political factor. Inflation. Foreign Exchange Rates. Interest Rates. Commodity Prices. Worldwide Stock Market The performance of world economy will have effect on local economy or Indonesian economy due to globalization. The worldwide economy especially US, China, Japan, and Singapore economy will help to enhance Indonesian economy because those countries are major trading partners of Indonesia (CIA, 2010). Therefore, positive economic performance of those countries will give favorable result for Indonesian Stock Market (Chuan, 2004).Indonesian stock prices get significant impact from US, China, Japan, and Singapore stock prices. JCX composite index or IHSG obtain significant influence from worldwide stock market especially DJIA (Dow Jones Industrial Average), Nikkei 225, Hang Seng and Strait Times. Investors always look at those stocks before and during trading stocks in Indonesia Stock Exchange. Export partners and import partners of Indonesia will affect local economy and price of JSX composite index in Indonesian Stock Exchange (Samsul, M. 2006). For example, JCX composite index in 7 May 2010 decreased significantly (71.29 points or 2.54%) because of the decrease of worldwide stock market. Dow Jones Industrial Average decreased 407.05 points or 3.75%, Nikkei decreased 331.1 points or 3.1%, Hang Seng decreased 213.12 points or 1.06%, and Strait Times decreased 6.7 points or 0.59%. The decrease of worldwide stock market had significant influence on Indonesian stock prices (Meryani, A. 2010). Figure 2.2 Indonesia Export Partners 2009 Source: adapted from CIA, 2010 Figure 2.3 Indonesia Import Partners 2009 Source: adapted from CIA, 2010 Local Economy GDP or Gross Domestic Product is regularly used as an indicator of economic performance of the country. Brux (Brux, J.M. 2008, p. 351) states that Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced in the economy in a given time period (usually one year). There are two different types of GDP as follow: Nominal GDP. Nominal GDP is GDP that determined at current prices or actual prices of a particular year. Real GDP. Real GDP is GDP which adjusted for inflation. GDP is generally used as indicator of standards of living in a country. If GDP is high, there is an assumption that economy in a country is doing well and this country has high standards of living. When GDP is growing, there is an assumption that economic activity in a country and standards of living are rising (Brux, 2008). When GDP of a country shows positive growth, it is usually followed by positive trend in stock market. Therefore, GDP is often used by investors to estimate turning points of their stocks and to time their investment.GDP growth and other economic data are published in newspaper. When investors read this information, investor should know how to use the information wisely. For instance, when banking sector is predicted to perform badly, investors should leave out banking stocks in their stock investment. This information will help investors to choose their stocks and make correct decision whether they have to buy, sell, or hold the shares. When economic condition in a country is good, stock prices generally tend to increase. However, investors have to be careful because it is also a sign that good days are numbered. Economy which is growing too fast will be difficult to maintain its growing or to be sustained (Chuan, 2004). Political Factor Stock price can be affected by regional, national, and international political situation. Political crisis usually will have negative impact in stock market trends. Stock prices generally will drop significantly because of political crisis (Chuan, 2004). Inflation According to Hook (Hook, J.A. 2003, p. 110), Inflation is A condition in which the economy experiences a continuous increase in the average price level of all goods and services. The price of certain goods and services may decrease but the average price of all goods and services increases. Financial service industries and banking are influenced significantly by inflation (Hook, J.A. 2003). Inflation can also be defined as a state that has continuous increase in prices of goods and services. Inflation will increase the cost of doing business because price of goods and services increases significantly. Therefore, it is expensive to do business during inflation and profit margins of business will decrease due to higher price of raw materials, rentals, etc (Chuan, 2004). Potential earnings of companies will determine the demand for a stock. Therefore, potential earnings of many companies generally decreased during inflation period due to the lower demand for stock. The lower demand for a stock will cause the decrease of stock prices in stock market. Investors should look at the growing of inflation and sell their stocks before inflation happens. Investors can use commodity prices and interest rates as indicators of inflation trend. When commodity prices and interest rates are rising, those factors indicate the coming of inflation. Investors should have carefulness to enter the stock market (Chuan, 2004). Foreign Exchange Rates Taylor, F. states that foreign exchange rate is the ratio which is used to convert one currency into another. Most countries around the world have their own currencies released by certain official agency which is called monetary authority or central bank. Currency is medium of exchange which is used to buy goods and services (Taylor, F. 2003). According to Philip (Philip et al. 2000), there are types of exchange rate system as follow: Flexible Exchange Rates. Flexible exchange rates system is an exchange rate system which the value of currency is permitted to react to market forces without any intervention by central banks or monetary authority. Fixed Exchange Rates. Fixed exchange rates system is an exchange rate system which associate countries agree to fix the value and changes only occur under certain particular condition. This exchange rate system can reduce uncertainty from international trade and support long term investment in international trade. Managed Floating. Managed floating is an exchange rate system which currency is allowed to respond to market changes but central banks are allowed to interfere in order to protect the value of the currency especially when central banks believe that depreciation is only temporary. Stock-Oriented models of exchange rates which also known as portfolio-balance approaches view exchange rates as equating demand and supply for certain assets especially stocks and bonds. Financial assets are valued by present values of future cash flows, expectations of relative currency values have significant role in price movements especially for internationally held financial assets. Therefore, stock prices are influenced by exchange rates movement (Ajayi and Mougoue, 1996). JCX Index or IHSG gets significant influence from the fluctuation of USD/IDR exchange rate. USD/IDR indicates how many IDR (Indonesia currency) per US dollar. The decrease of IDR currency in term of US dollar is generally followed by the decrease of several Indonesia stock prices such as Telkom, ASTRA International, Bakrie Telecom, Kalbe Farma, etc (Sihombing,G. 2008). Figure 2.4 shows that the fluctuation of USD/IDR exchange rate is very high. Therefore, Indonesian investors should look at USD/IDR exchange rate as consideration in trading stocks (Yahoo, 2010). Figure 2.4 USD/IDR Exchange Rates from 2005 to 2010 Source: Yahoo, 2010 Interest Rates Frumkin (Frumkin, N. 2000, p. 190) states that Interest is the cost of borrowing money, and interest rates are the price of money. Interest rates which refer to yields are the annualized percentage that interest is of the principal of the loan. Interest rate is a good indicator of inflation trends because of its role as regulatory device to monitor the inflation trends. If interest rate increases, the cost of borrowing money will become higher and more expensive. Investing and developing business will be more expensive. Therefore, the economic growth is decrease and the inflation is under control. Besides as an indicator of inflation trends, interest rates also affect stock market and have significant influence in stock prices. When interest rate in a country is low that indicates stable or low inflation rates, stock market generally shows its positive trends and has tendency to be more active. Many investors prefer to put their money on other investments rather than put their money in bank deposits due to lower fixed interest rate. Investors will obtain lower return from bank deposits than return which comes from other investments especially stocks or shares. In addition, the cost of borrowing money becomes cheaper and this makes investors advance their additional borrowing for investment. Therefore, low interest rate will give positive impact to stock market in terms of rising stock prices. Investors have to be more careful when there is news about increasing interest rates. Investors should look at the change of interest rates regularly because of the impact of interest rates on their stock prices (Chuan, 2004). Increasing interest rates will give a negative effect on many companies which have large debts or loans because of the rising of cost of borrowing. The profit of the companies and ability to grow will decrease. When the profit of companies decrease, stock prices generally becomes less attractive and their stock prices decrease. When interest rates become high, investors usually react in two possible outcomes as follow (Mladjenovic, P. 2009): Investors may sell some of their stocks to pay their interest loans or debts. If many investors sell their stock, it will give negative effect on stock prices. Stock prices tend to decrease because there are more sellers than buyers in stock market. Higher interest rates may cause investors swap change their investment from stocks to bonds or bank deposits which offer higher return. In Indonesia, interest rate decisions are decided by Central Bank of Republic of Indonesia. Indonesia interest rates dropped significantly over the years that can be seen in figure 2.5. The decrease of interest rates will attract more investors to invest their money on stock market (Trading Economics, 2010). Figure 2.5 Indonesia Interest Rates from 2006 to 2010 Indonesia Interest Rate Source: Trading Economics, 2010 Commodity Prices Basic commodities which are required in the production process of most goods and services are good indicators of inflation trends. Those commodities are oil, rubber, steel, etc. When the prices of those commodities increase, the cost of goods and services will also increase. Therefore, when the prices of most commodities increase, it may be an indication of inflation. Investors should have carefulness to enter the stock market. Besides as an indicator of inflation trends, commodity prices especially oil prices also affect stock market and have significant influence in stock prices (Chuan, 2004). Higher oil prices will have significant impact on stock market returns especially the aggregate effect of stock prices. Higher oil prices may cause the rising of production cost which will give great forces on industry equity returns. In oil exporting countries, higher oil prices will increase profits from oil, gas, coal, and vary resources industries. Higher oil prices may cause the rising of stock prices especially for oil exporting countries which depends on relative significance of the industries (Chen, A. H. 2008). JCX composite index or IHSG gets significant influence from the fluctuation of oil prices. For instance, the price of oil in early 2008 increased significantly to US$ 147 per barrel and then decreased drastically to US$ 36 per barrel. The price of JCX composite index followed the fluctuation of oil prices. In the early 2008, JCX composite index increased to IDR 2800. At the end of this year, JCX composite index decreased to IDR 1100 (more than 100%) because of the decrease of oil prices. Indonesian stock prices generally follow the fluctuation of oil prices. When the oil prices decrease, stock prices usually also decrease and otherwise. Therefore, Indonesian investors should look at the movement of oil prices as consideration in trading stocks (Sidarta, W. 2010). Research Framework Stock price in Indonesia Stock Exchange is the main axis in the research framework. The potential external environmental factors which influence stock price are: Economic factors. Economic factors consist of worldwide stock market (DJIA, Hang Seng, Nikkei, and Strait Times), local economy (GDP), inflation, interest rates, exchange rates (USD/IDR exchange rates), and commodities prices (oil price). Interest rates and commodities prices have correlation with inflation because the movements of those factors are indicator of inflation trends. Political factors. Stock price can be affected by regional, national, and international political situation such as political crisis. All of those potential factors will become consideration factors for Indonesian investors in order to make correct decision whether they have to buy, sell, or hold their stocks. The research framework can be seen in figure 2.6. Figure 2.6 Research Framework POLITICAL FACTOR ECONOMIC FACTORS STOCK PRICE (JCX Composite Index or IHSG) INTEREST RATES INFLATION OIL PRICES EXCHANGE RATES (USD/IDR) LOCAL ECONOMY (GDP) WORLDWIDE STOCK MARKET (DJIA, NIKKEI, HANG SENG, STRAIT TIMES) Source: The Researcher Summary The research topic in this study is An Empirical Study of Factors Influencing Stock Prices in Indonesia Stock Exchange. The report consists of introduction, literature review, and reference. Chapter 1 introduction identifies background of the research, objectives of the research, research question, research hypotheses, and scopes. Chapter 2 literature review provides knowledge and theories that are related to research topic. Summary and explanation of external environmental factors which influence stock prices will be provided in this chapter. At the end of this chapter, the author provides research framework in this report. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, references show the sources of all information used in this research. Factors Influencing Stock Prices in Indonesia Exchange Factors Influencing Stock Prices in Indonesia Exchange There are many definitions of stock with different point of view. Bernstein states that stocks are partial ownership of companys assets which are subordinated with debt (Bernstein, R. 2002). Stock is a device that implies an ownership position in a company and signifies a claim on its proportional share in companys assets and profits. Only certain companies have stock called corporation. Limited partnership and Sole proprietorship do not issue stock (WebFinance, Inc., 2010). According to Vernimmen et al. (Vernimmen et al. 2009, p. 527), A stock or a share is a security that is not redeemed. The investment can only be recognized through disposal and whose revenue flows is uncertain. Corporations need financial resources and this required resources usually come from ordinary or common stocks, preferred stocks, and medium to long term lenders or debenture holders. Common stock is everlasting capital for the corporation. The owners who invest in this type of stock are called ordinary or common shareholders and any profit retained after paying debenture interest will be distribute to them called dividend. Preferred stocks are issued to public in order to acquire capital and these stocks have rights to specified yearly fixed percentage dividend on the paid-up capital. Preferred stocks are less common in stock market (Anandarajah, Aseervatham, and Reid 2005). The following are the characteristics of common stock and preferred stocks: (Scott et al. 1999). Preferred Stock A hybrid security which has similar characteristics to bonds and common stocks. It is similar to bonds in its dividends which are limited in amount. It is similar to common stocks in that it has no fixed maturity date, dividends are not deductible in terms of tax purposes, and non-payment of dividends will not cause bankruptcy. Common Stock. Common stock shares imply an ownership in corporation which does not have maturity date and exists as long as the firm does. Stock exchange is an organization which helps connection between potential buyers and potential sellers of stocks. Stock exchange can be physical place, network of computers, system of telephone link, etc. A stock market is a place where stocks can be purchased and sold (Samuel, J.M., Wilkes, F.M., and Brayshaw, R.E. 1996). Most of countries around the world have stock exchanges. The number of stock exchanges around the world is growing significantly. Based on continents, stock exchanges around the world can be divided into 6: Africa, Asia, Europe, Middle East, North America, and South America. Indonesia Stock Exchange called IDX is one of the stock exchanges in Asia (Stock Exchanges Worldwide Links, n.d., 2010). Principally, there are 2 advantages are obtained by investor who buying or having stocks in stock exchanges (Indonesia Stock Exchange, 2007): Dividend. Dividend is sharing profit awarded by a company because of holding stock for a relatively long period until ownership term is in period where an investor is recognized as shareholder who has right to get dividend. Capital Gain. Capital gain is the difference between selling price and buying price acquired from trading activities. Those advantages cause investors choose stocks as an attractive alternative than put their money in fixed deposits that have low interest rates (Chuan, 2004). Basically, investors who buying or having stocks will also have some risks (Indonesia Stock Exchange, 2007): Capital Loss. Capital loss is a situation when an investor is selling the stocks at lower price than the buying price. Liquidity Risk. A company with shares held by public is declared for its bankruptcy by the Court. Shareholders or investors will have the last priority of claiming their rights after all liabilities are fulfilled. The rest of the companys wealth will be shared proportionally to the shareholders. Shareholders will not obtain anything from the liquidation if there is no rest left. The overall price movements of common stocks of corporations traded on stock markets are called stock market price indexes. Corporate stockholders will get benefit from company through dividends and have right to vote in company. Investors capital gains and losses will affected by increasing and falling of stock prices (Frumkin 2000). Norman (Frumkin, N. 2000, p. 277) states that The dividend yield, which is the rate of return on a share company stock, is a companys annual cash dividend percentage of companys annual stock price. Nowadays, the price of stocks in Indonesia Stock Exchange is changing rapidly. The average price of stocks in Indonesia Stock Exchange increased significantly (approximately 20%) during 2006. The average price decreased approximately 19% during January 2008 and declined again approximately 16% during March 2008. The significant change of stock prices in Indonesia Stock Exchange is caused by external environmental factors or macroeconomics factors (Frensidy, B. 2008). There are many external environmental factors that impact financial system including stocks. Those factors are economic growth, inflation, exchange rates, interest rates, etc (Evans, et al. 2000). Many investors lost their money because of the significant change of stock prices in Indonesia Stock Exchange. Investors lost their capital because they sell their stocks at lower price than the buying price (Indonesia Stock Exchange, 2007). By analyzing external environmental factors, investors can predict the future price of stocks more accurately. To minimize the risk or capital loss, investors have to understand external environmental factors influencing stock prices in order to make correct decision whether they have to buy, sell, or hold the shares. The research will identify external environmental factors which have significant influence on stock prices and explain the relationship between those factors and stock prices in order to accomplish that goal. Objectives, Research Question, and Research Hypotheses The objectives of the research are: To identify the variables of external environmental factors influencing the stock prices in Indonesia Stock Exchange. To analyze the influence of external environmental factors on stock prices in Indonesia Stock Exchange. Based on the objectives, the research questions are as follow: Which external environmental factors influence stock prices in Indonesia Stock Exchange? How does external environmental factors influence on stock prices in Indonesia Stock Exchange? Based on the research question, the research hypotheses are built up: External environmental factors encourage the change of stock prices in Indonesia Stock Exchange. External environmental factor have strong correlation with stock prices in Indonesia Stock Exchange. Scope This research study will focus on external environmental factors influencing the stock prices in Indonesia stock exchange, which will be explained more briefly in chapter 2 literature reviews. Some external environmental factors influencing stock prices are applied to explain the correlation between external environmental factors and stock prices in Indonesia Stock Exchange. The analysis of what kind of relationship (positive or negative) between external environmental factors and stock prices will also be clarified in this research. The literature reviews will consist of some external environmental factors which influence stock prices especially in Indonesia Stock Exchange. A survey will be performed in order to collect data about the change of several external factors and stock prices in Indonesia Stock Exchange. Based on collected data, a model will be offered to analyze the relationship between stock prices and external environmental factors. Lastly, this research will be limited and focused on the following: The research is only focused on JSX composite index or (Indonesian: Indeks Harga Saham Gabungan, IHSG). This research is only focused on external environmental factors which influence stock prices. The data collection period of this research is 5 years from 2005 to 2009. Chapter 2 LITERATURE REVIEW Literature Review of External Environmental Factors and Stock Prices in Indonesia Stock Exchange This chapter will summarize external environmental factors which influence stock prices. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, the major external environmental factors influencing stock prices in Indonesia Stock Exchange will be provided in this chapter. Categories of Stocks and Types of Orders In the market, there are various names of stocks that refer to different categories of stocks (Chuan, 2004): Figure 2.1 Categories of Stocks Source: adapted from Chuan, 2004 Blue Chips refer to stocks that are steady with good fundamentals. Undervalued Stocks refer to stocks which are well-established by companies with solid balance sheet. Such stocks are generally unnoticed by investors, traded with small volume, and receive little reporting from media and analysts or experts. Growth Stocks refer to stocks which are established by recognized companies that have high growth sectors and their business are predicted to enlarge quickly over the coming years. Such stocks are generally traded with higher PER (Price Earnings Ratio) even though they lack of history of strong earnings base. While companies show continual rise in their earnings, the price of these stocks will increase. Penny Stocks refer to stocks that have small capitalization and traded bellow one dollar. Small-Cap Stocks refer to stocks that have very few issued shares and traded in low price at stock market. Such stocks are usually not bought by foreign institutions and funds. Small-Cap Stocks have some risks as follow: Smaller companies tend to less flexible to major crisis because they are less diversified and more prone to market shocks and monetary crisis. Trading volumes are low and less liquid. Therefore, investors may not find the buyers in stock market when they want to sell the stocks. Small-Cap Stocks are more sensitive to news and rumors. There are 3 types of orders used in the buying and selling of stocks as follow (Chuan, 2004): Market Order Market order is an order to buy or sell stocks instantly at the best current price. For example, investors place market order to sell AAA shares. It means investors buy AAA shares at current offering price. Limit Order Investors which place limit order will set a certain suitable price to buy or sell a particular stock. Stop Order Stop order is an order to buy or sell the stocks that are traded at certain price level immediately. This certain price level is known as stop price. For instance, investors place stop order to buy AAA shares at $5.00. If AAA shares begin to trade at $5.00, the order becomes market order and broker will buy shares at the best current price. In terms of selling stop order, the order is placed bellow current price to help investors decrease their possible losses and keep their profit. Timing and Stock Investment Investor would discourage when the price of their stocks decreased significantly after they had bought the stocks or to be trapped in market crash after they had invested their money in the stock market. Good timing is the most crucial factor for investors in stock market. Even the best stocks will become useless investments if investors buy them at wrong time (George, A. 2008). The major problem is good timing cannot be determined easily because stock market is influenced by large amount of factors and events that are beyond prediction. Investors have to understand factors influencing stock price and involve some insight to determine good timing whether they have to buy, sell, or hold their stocks (Chuan, 2004). In stock investment, price is mechanism by which practically all goods and services are exchanged. In this case, price has strong power or price is a king because price will determine whether stocks become excessively expensive or inexpensive (George, A 2008). The price of stocks tends to increase when there are more buyers than sellers in stock market. Buyers are tense in stock market based on expectation of future price increase. There are some signals which make buyers believe that future stock price will increase (Chuan, 2004): Positive indication from market trend. Rumors in stock market. Information concerning better earnings prospects for company. External Environmental Factors Influencing Stock Prices There are several external environmental factors influencing the uptrend or downtrend of stock prices in stock market. Those external environmental factors are: Worldwide stock market. Local economy. Political factor. Inflation. Foreign Exchange Rates. Interest Rates. Commodity Prices. Worldwide Stock Market The performance of world economy will have effect on local economy or Indonesian economy due to globalization. The worldwide economy especially US, China, Japan, and Singapore economy will help to enhance Indonesian economy because those countries are major trading partners of Indonesia (CIA, 2010). Therefore, positive economic performance of those countries will give favorable result for Indonesian Stock Market (Chuan, 2004).Indonesian stock prices get significant impact from US, China, Japan, and Singapore stock prices. JCX composite index or IHSG obtain significant influence from worldwide stock market especially DJIA (Dow Jones Industrial Average), Nikkei 225, Hang Seng and Strait Times. Investors always look at those stocks before and during trading stocks in Indonesia Stock Exchange. Export partners and import partners of Indonesia will affect local economy and price of JSX composite index in Indonesian Stock Exchange (Samsul, M. 2006). For example, JCX composite index in 7 May 2010 decreased significantly (71.29 points or 2.54%) because of the decrease of worldwide stock market. Dow Jones Industrial Average decreased 407.05 points or 3.75%, Nikkei decreased 331.1 points or 3.1%, Hang Seng decreased 213.12 points or 1.06%, and Strait Times decreased 6.7 points or 0.59%. The decrease of worldwide stock market had significant influence on Indonesian stock prices (Meryani, A. 2010). Figure 2.2 Indonesia Export Partners 2009 Source: adapted from CIA, 2010 Figure 2.3 Indonesia Import Partners 2009 Source: adapted from CIA, 2010 Local Economy GDP or Gross Domestic Product is regularly used as an indicator of economic performance of the country. Brux (Brux, J.M. 2008, p. 351) states that Gross Domestic Product (GDP) is defined as the market value of all final goods and services produced in the economy in a given time period (usually one year). There are two different types of GDP as follow: Nominal GDP. Nominal GDP is GDP that determined at current prices or actual prices of a particular year. Real GDP. Real GDP is GDP which adjusted for inflation. GDP is generally used as indicator of standards of living in a country. If GDP is high, there is an assumption that economy in a country is doing well and this country has high standards of living. When GDP is growing, there is an assumption that economic activity in a country and standards of living are rising (Brux, 2008). When GDP of a country shows positive growth, it is usually followed by positive trend in stock market. Therefore, GDP is often used by investors to estimate turning points of their stocks and to time their investment.GDP growth and other economic data are published in newspaper. When investors read this information, investor should know how to use the information wisely. For instance, when banking sector is predicted to perform badly, investors should leave out banking stocks in their stock investment. This information will help investors to choose their stocks and make correct decision whether they have to buy, sell, or hold the shares. When economic condition in a country is good, stock prices generally tend to increase. However, investors have to be careful because it is also a sign that good days are numbered. Economy which is growing too fast will be difficult to maintain its growing or to be sustained (Chuan, 2004). Political Factor Stock price can be affected by regional, national, and international political situation. Political crisis usually will have negative impact in stock market trends. Stock prices generally will drop significantly because of political crisis (Chuan, 2004). Inflation According to Hook (Hook, J.A. 2003, p. 110), Inflation is A condition in which the economy experiences a continuous increase in the average price level of all goods and services. The price of certain goods and services may decrease but the average price of all goods and services increases. Financial service industries and banking are influenced significantly by inflation (Hook, J.A. 2003). Inflation can also be defined as a state that has continuous increase in prices of goods and services. Inflation will increase the cost of doing business because price of goods and services increases significantly. Therefore, it is expensive to do business during inflation and profit margins of business will decrease due to higher price of raw materials, rentals, etc (Chuan, 2004). Potential earnings of companies will determine the demand for a stock. Therefore, potential earnings of many companies generally decreased during inflation period due to the lower demand for stock. The lower demand for a stock will cause the decrease of stock prices in stock market. Investors should look at the growing of inflation and sell their stocks before inflation happens. Investors can use commodity prices and interest rates as indicators of inflation trend. When commodity prices and interest rates are rising, those factors indicate the coming of inflation. Investors should have carefulness to enter the stock market (Chuan, 2004). Foreign Exchange Rates Taylor, F. states that foreign exchange rate is the ratio which is used to convert one currency into another. Most countries around the world have their own currencies released by certain official agency which is called monetary authority or central bank. Currency is medium of exchange which is used to buy goods and services (Taylor, F. 2003). According to Philip (Philip et al. 2000), there are types of exchange rate system as follow: Flexible Exchange Rates. Flexible exchange rates system is an exchange rate system which the value of currency is permitted to react to market forces without any intervention by central banks or monetary authority. Fixed Exchange Rates. Fixed exchange rates system is an exchange rate system which associate countries agree to fix the value and changes only occur under certain particular condition. This exchange rate system can reduce uncertainty from international trade and support long term investment in international trade. Managed Floating. Managed floating is an exchange rate system which currency is allowed to respond to market changes but central banks are allowed to interfere in order to protect the value of the currency especially when central banks believe that depreciation is only temporary. Stock-Oriented models of exchange rates which also known as portfolio-balance approaches view exchange rates as equating demand and supply for certain assets especially stocks and bonds. Financial assets are valued by present values of future cash flows, expectations of relative currency values have significant role in price movements especially for internationally held financial assets. Therefore, stock prices are influenced by exchange rates movement (Ajayi and Mougoue, 1996). JCX Index or IHSG gets significant influence from the fluctuation of USD/IDR exchange rate. USD/IDR indicates how many IDR (Indonesia currency) per US dollar. The decrease of IDR currency in term of US dollar is generally followed by the decrease of several Indonesia stock prices such as Telkom, ASTRA International, Bakrie Telecom, Kalbe Farma, etc (Sihombing,G. 2008). Figure 2.4 shows that the fluctuation of USD/IDR exchange rate is very high. Therefore, Indonesian investors should look at USD/IDR exchange rate as consideration in trading stocks (Yahoo, 2010). Figure 2.4 USD/IDR Exchange Rates from 2005 to 2010 Source: Yahoo, 2010 Interest Rates Frumkin (Frumkin, N. 2000, p. 190) states that Interest is the cost of borrowing money, and interest rates are the price of money. Interest rates which refer to yields are the annualized percentage that interest is of the principal of the loan. Interest rate is a good indicator of inflation trends because of its role as regulatory device to monitor the inflation trends. If interest rate increases, the cost of borrowing money will become higher and more expensive. Investing and developing business will be more expensive. Therefore, the economic growth is decrease and the inflation is under control. Besides as an indicator of inflation trends, interest rates also affect stock market and have significant influence in stock prices. When interest rate in a country is low that indicates stable or low inflation rates, stock market generally shows its positive trends and has tendency to be more active. Many investors prefer to put their money on other investments rather than put their money in bank deposits due to lower fixed interest rate. Investors will obtain lower return from bank deposits than return which comes from other investments especially stocks or shares. In addition, the cost of borrowing money becomes cheaper and this makes investors advance their additional borrowing for investment. Therefore, low interest rate will give positive impact to stock market in terms of rising stock prices. Investors have to be more careful when there is news about increasing interest rates. Investors should look at the change of interest rates regularly because of the impact of interest rates on their stock prices (Chuan, 2004). Increasing interest rates will give a negative effect on many companies which have large debts or loans because of the rising of cost of borrowing. The profit of the companies and ability to grow will decrease. When the profit of companies decrease, stock prices generally becomes less attractive and their stock prices decrease. When interest rates become high, investors usually react in two possible outcomes as follow (Mladjenovic, P. 2009): Investors may sell some of their stocks to pay their interest loans or debts. If many investors sell their stock, it will give negative effect on stock prices. Stock prices tend to decrease because there are more sellers than buyers in stock market. Higher interest rates may cause investors swap change their investment from stocks to bonds or bank deposits which offer higher return. In Indonesia, interest rate decisions are decided by Central Bank of Republic of Indonesia. Indonesia interest rates dropped significantly over the years that can be seen in figure 2.5. The decrease of interest rates will attract more investors to invest their money on stock market (Trading Economics, 2010). Figure 2.5 Indonesia Interest Rates from 2006 to 2010 Indonesia Interest Rate Source: Trading Economics, 2010 Commodity Prices Basic commodities which are required in the production process of most goods and services are good indicators of inflation trends. Those commodities are oil, rubber, steel, etc. When the prices of those commodities increase, the cost of goods and services will also increase. Therefore, when the prices of most commodities increase, it may be an indication of inflation. Investors should have carefulness to enter the stock market. Besides as an indicator of inflation trends, commodity prices especially oil prices also affect stock market and have significant influence in stock prices (Chuan, 2004). Higher oil prices will have significant impact on stock market returns especially the aggregate effect of stock prices. Higher oil prices may cause the rising of production cost which will give great forces on industry equity returns. In oil exporting countries, higher oil prices will increase profits from oil, gas, coal, and vary resources industries. Higher oil prices may cause the rising of stock prices especially for oil exporting countries which depends on relative significance of the industries (Chen, A. H. 2008). JCX composite index or IHSG gets significant influence from the fluctuation of oil prices. For instance, the price of oil in early 2008 increased significantly to US$ 147 per barrel and then decreased drastically to US$ 36 per barrel. The price of JCX composite index followed the fluctuation of oil prices. In the early 2008, JCX composite index increased to IDR 2800. At the end of this year, JCX composite index decreased to IDR 1100 (more than 100%) because of the decrease of oil prices. Indonesian stock prices generally follow the fluctuation of oil prices. When the oil prices decrease, stock prices usually also decrease and otherwise. Therefore, Indonesian investors should look at the movement of oil prices as consideration in trading stocks (Sidarta, W. 2010). Research Framework Stock price in Indonesia Stock Exchange is the main axis in the research framework. The potential external environmental factors which influence stock price are: Economic factors. Economic factors consist of worldwide stock market (DJIA, Hang Seng, Nikkei, and Strait Times), local economy (GDP), inflation, interest rates, exchange rates (USD/IDR exchange rates), and commodities prices (oil price). Interest rates and commodities prices have correlation with inflation because the movements of those factors are indicator of inflation trends. Political factors. Stock price can be affected by regional, national, and international political situation such as political crisis. All of those potential factors will become consideration factors for Indonesian investors in order to make correct decision whether they have to buy, sell, or hold their stocks. The research framework can be seen in figure 2.6. Figure 2.6 Research Framework POLITICAL FACTOR ECONOMIC FACTORS STOCK PRICE (JCX Composite Index or IHSG) INTEREST RATES INFLATION OIL PRICES EXCHANGE RATES (USD/IDR) LOCAL ECONOMY (GDP) WORLDWIDE STOCK MARKET (DJIA, NIKKEI, HANG SENG, STRAIT TIMES) Source: The Researcher Summary The research topic in this study is An Empirical Study of Factors Influencing Stock Prices in Indonesia Stock Exchange. The report consists of introduction, literature review, and reference. Chapter 1 introduction identifies background of the research, objectives of the research, research question, research hypotheses, and scopes. Chapter 2 literature review provides knowledge and theories that are related to research topic. Summary and explanation of external environmental factors which influence stock prices will be provided in this chapter. At the end of this chapter, the author provides research framework in this report. Factors and frameworks will be appeared by joining and integrating adopted theories. Lastly, references show the sources of all information used in this research.

Sociology Essays Child Socialising Society

Sociology Essays Child Socialising Society Child Socialising Society Socialisation Every child comes into this world like wet clay, completely bereft of any vices, habits and behavioural patterns. Socialising is the process by which the child moulds itself and learns the process of interacting and surviving in society. There are various key factors that influence this process the family, the peers, the school, society and religious beliefs. The first point of contact to the child and also the most important factor is always the family. The ethics and behaviour that is followed at home is always imbibed unconsciously by the child. Parents are generally role models for children. Hence the socializing skills are passed on in most cases to the offspring. Elder siblings are also a source of influence. It is because of this reason that in the joint family system that existed previously in India, the children were always better adjusted to society. They had such a plethora of individuals to study and imbibe from that under any given circumstances in life, they would adjust and adapt freely. But in the present nuclear family system, the parents play an even more important role in shaping a child’s behavioural patterns. And even in the same family no two children can be the same. This is where the nature versus nurture debate comes in. The genetically ingrained nature has to be nurtured to conform to the rules of society. The most absorptive years in one’s life is till the age of 10. An individual is always on the path of learning but the foundation of what a person becomes is laid during these formative years. Various societies inculcate varied socializing skills amongst their members. It does not indicate that one culture is superior to the other. It just depends on the way that the civilization under study has progressed. A civilization which has cultivated its young generation with a common set of rules and a uniform educational system is more likely to be homogenous and more at harmony amongst themselves. But on the other hand it is also seen that heterogeneous communities, like the United States of America, benefit from the presence of various ethnic minority communities. Each minority community brings along with it, its culture, its ethnicity, their customs etc. Having so many socializing influences makes the parent society a more tolerant one. 1 There are also found to be two types of socializing, depending on the nature of factors that influence them. Positive socializing is one in which a person learns through good and happy experiences. Parents teaching their kids from their experiences, learning from books or from peers are some example of positive socializing. Positive socializing can take on the form of natural socializing and planned socializing. Find out how our expert essay writers can help you with your work Natural socializing is when a child through his own inquisitiveness starts exploring and learning from the various situations around him/her. The way a child responds to such situations is generally genetically ingrained. Planned socializing is when various external factors like parents, teachers, school curriculum, religious doctrines and social dictates try to change the internal response system of the child to conform to more socially acceptable norms. Negative socializing happens when a person understands or begins to comprehend after undergoing a bad experience or ‘learning the hard way’ as it is said. Learning the valuable lesson, that over speeding is dangerous, after meeting with an accident is an example of negative socializing. The victim of a rape too undergoes the trauma of negative socializing after which she shrinks into her own shell and abhors social contact.   Life is always a mixture of positive and negative experiences. The more positive experiences in socializing one has, the happier or more positive the person gets. More negative socializing in a person’s life gets him demoralised and unhappy.   At any given point in time an individual is usually the sum total of his prior socialisation or past experiences. 2 A person does not have any hold over choosing ones parents and place of birth. Thus, effectively a person has no control over the initial socializing influences that one gets in the first 10 or 20 yrs of ones life. But it depends on a person as to how he uses his prior socializing skills and observation power to make a better tomorrow for himself. He should learn from his past and from the situations around himself to better himself. Thus self actualization will set in and a person can work towards his dream of a better tomorrow. 1. http://anthro.palomar.edu/social/soc_1.html 2. http://www.soc.ucsb.edu/faculty/baldwin/classes/soc142/scznDEF.html 3. http://www.delmar.edu/socsci/rlong/intro/social.html 4. Writers Own Analysis

Use of the Female Gothic in Beloved Essay -- Toni Morrison Beloved Ess

Use of the Female Gothic in Beloved      Ã‚  Ã‚  Ã‚  Ã‚   Toni Morrison’s novel Beloved is a slave narrative, but it encompasses much more than slavery.   Unlike many slave narratives that focus on the male perception of slavery, Morrison's novel portrays slavery from a feminine point of view.   The main characters are Sethe, her daughter, Denver, and the mysterious Beloved.   In the beginning of the novel, Sethe and her daughter live alone in 124, a house that is haunted by the ghost of Sethe's first daughter. Sethe's two older boys, "Howard and Buglar, had run away by the time they were thirteen years old. Soon after the sons have fled, Baby Suggs, Denver's grandmother, dies.   The novel centers on Sethe's past, in particular, the death of her first daughter.   This event dominates the book and the action of the novel revolves around this terrible incident.   In Beloved, Toni Morrison utilizes characteristics of the female gothic novel such as mothering, living within enclosed spaces, and the doubli ng of characters, coupled with dilemmas involving memory and repression, to address the issue of slavery.    Beloved illustrates the notion of the gothic mother through the character of Sethe.   Her motherly love is turned into a horrific image of mercy, one that many find difficult to understand. At the time, slaves were valued as property.   They were bred as if they were horses, with their young snatched away from them, often at birth, and no chance of having a family.   Many children were "permanently separated from any other family members, [and] did not know if or when they would ever see their mother[s] again" (King 527).   Sethe describes her own childhood experience with the woman she knew as her mother and it is typical of the experi... ...illions of lives and Morrison gives those lives names and faces.   The narrative form is an effective tool to bring the reality of slavery and all its misery into everyday life.    Works Cited Goddu, Teresa A. Gothic America. New York: Columbia UP, 1997. King, Wilma. "Within the Professional Household: Slave Children in the Antebellum South." The Historian 59.3 (1997): 523-540. Kristeva, Julia. Powers of Horror. New York: Columbia UP, 1982. Morrison, Toni. Beloved. New York: Penguin Group, 1987. Samuels, Wilfred and Clenora Hudson-Weems. Ed. Toni Morrison. Boston: Twayne Publishers, 1990. Sedgwick, Eve Kosofsky. The Coherence of Gothic Conventions. New York: Methuen, 1976. Smith, Valerie. "Circling the Subject: History and Narrative in Beloved." Toni Morrison. Henry Gates, Jr. and K.A. Appiah. Ed. New York: Amistad Press, 1993.

Its the End of the World as We Know it, and I Feel Fine :: essays research papers

It's the End of the World as We Know it, and I Feel Fine Earl. It rhymed with girl. He always took a lot of heat for that. But that was before the Easter egg. The extraordinary Easter egg. Earl’s extraordinary Easter egg†¦ He got it as a gift from his mean cousin Katie that never was and never will be nice to him (she kept teasing his name). It looked like nothing special to him. Probably just some chocolate inside but it definitely wasn’t an ordinary egg. This egg contained extra-terrestrial contents that have enormous potential. As he unwrapped the cheap aluminum wrapper encasing the egg, a little note fell out. At first, what seemed like an encoded language scribbled on the note moved its lines around and became American English. This is the pod of life and destruction. In the pod contains objects from the seventh dimension. Its purpose is to continue the mere existence of the universe by destroying much of it. 3,465,735,180,261 EUs received  Ã‚  Ã‚  Ã‚  Ã‚  32 EUs needed Note: The reader of this is cursed with the occupation of feeding the pod the energy it needs to complete its objective. Nice prank Kate but this is too stupid to be funny or scary, Earl thought. As he was about to throw it out, he noticed that the egg felt warm to his touch. He easily broke open the plastic shell and inside was a very strange looking object. It looked like a cool blue rock that shimmered like water. It felt like slick rubber but it bended and changed shape like Jell-o. This is weird, Earl though. As he was running out the kitchen door to ask Katie about this, the â€Å"thing† slipped out of his hand and a bounced straight up a couple hundred feet. While it was still going up, it disappeared. Uh-oh, Earl thought, it’s going to do whatever it’s supposed to do! Then, it warped back into existence right in the palm of Earl’s hand! Weird, Earl thought, better not tell Katie right away. At night, he put the pod under his pillow. It just made him feel safer when it’s in his hands than in his parents bedroom. Next morning, he felt really tired. He glanced at the slip and was shocked at the numbers on it. It read that instead of 32 EUs needed, it only said 3. Uh-oh, I looked at the back of the slip and found more words on it.

Modernism: A Critical Analysis

T. S. Eliot did not invent modernism in literature, but his poem The Waste Land (1922) expresses more distinctly than anyone else what the modernist endeavor really was. More than a poem, it was an occasion, a cry that defined a moment in time, and which it is not possible to repeat. Eliot himself declared that he had moved on from the style of The Waste Land immediately after. Shortly after its publication he expressed in a private correspondence, â€Å"As for The Waste Land, that is a thing of the past so far as I am concerned and I am now feeling toward a new form and style† (qtd. in Chinitz 69).The Hollow Men (1926) is nothing as fragmentary, chaotic and nihilistic as is the 1922 poem. In The Waste Land we seem he hear an unalloyed expression of despair; the despair that purposeful art in no more possible in â€Å"the immense panorama of futility and anarchy which is contemporary history† (qtd. in Sigg 182). Yet the poem is not a complete negation of art. It manages a sort of coherence towards the end, in which we may read a suggestion that art may still be possible amidst desolate meaninglessness of the modern age.The First World War is the event that finally shattered the cozy certainties of the Victorian age. At a more protean level, it annulled the optimism of the humanist endeavor which gave rise to the Renaissance, the Enlightenment and the scientific world view. It is significant that the major part of this endeavor was carried out in art and literature. In the aftermath to the Great War came disillusionment, because it was widely perceived that progress did not bring peace but war – the most brutal and mindless sort. It was not just corpses and rubble that littered Europe, but the Western psyche too was littered with rubble.The Waste Land is essentially a collection of fragments from the tradition of literature. The ultimate statement made by Eliot is that there is no more meaning in which the artist can take his tradition and f urther it. Yet he cannot abandon the past either, for his identity is still contained within those fragments. â€Å"These fragments I have shored against my ruins,† says the Fisher King, who is not able to redeem the wasteland that stretches before him (Eliot 69). This expresses the core sentiment of the poem, which is in the end a mere collection of literary fragments. It is a demonstration of what the function of the artist has become, for the message of Eliot is that the artist is indeed reduced to gathering debris from his cultural past.Eliot’s poem is not meant to be imitated. Its function is to locate the spirit of the age and give it voice. So successful was it in this latter role that many of its literary features began to be adopted, especially so in the novel form, towards the creation of the modernist novel. The most common feature of this fiction is the dysfunctional and alienated protagonist in an urban setting who struggles against encroaching meaningless ness. Of this fiction Federman says, â€Å"The creatures of the new fiction will be as changeable, as illusory, as nameless, as unnamable, as fraudulent, as unpredictable as the discourse that makes them† (12).To render such a narrative effective novelists were soon employing a device known as â€Å"stream of consciousness†. It sacrifices coherence for an effect which seems to suggest that we are privy to the unexpurgated thoughts and impressions of the protagonist. Ulysses by James Joyce is composed entirely I this mode, and another novelist who use this method effectively is Virginia Woolf. Most often it is used for effect in novels which retain some meaningfulness, therefore are not entirely nihilistic. In such novels we identify the contining search for possibilities in art which Eliot had instigated.The novels of Franz Kafka use the conventional narrative voice, yet depict a world that is fragmented and devoid of meaning. The protagonist in The Trial wakes up one morning to discover that he is under arrest, subject to trial, but free to move about in the meantime. There is no immediate explanation of his wrong-doing, and none is forthcoming as the trial grinds on. Not only self-preservation, the protagonist is also seeking for meaning. But the only meaning that emerges is that ‘the system’ has decided that he is â€Å"the accused†, which has set into motion a process whose eventual and inevitable outcome is a brutal execution.Everybody seems to be helpless before the system, both friend and foe. They cannot effect its course, and neither can they extract meaning from it. The state embodies logic, of which Kafka says, â€Å"Logic is doubtless unshakable, but it cannot withstand a man who wants to go on living† (Kafka 263). Instead of war, Kafka’s focus is on the bureaucratization of the modern state, but evokes the same sense of despair and the helplessness of the individual before greater and inexplicable fo rces, the unmistakable stamp of modernism.The Old Man and the Sea by Ernest Hemingway is also considered a modernist novel. Though more famed for his hard-edged realism, in this last effort before his death Hemingway has created a powerful parable of futility. Santiago is a Cuban fisherman who has met bad luck, having not caught a fish for 84 days. On the 85th day he becomes reckless and ventures further into the sea than anyone else before. He hooks a marlin of such tremendous size that it hauls Santiago and his boat around sea for and entire day.The old fisherman is soon locked in an epic battle of strength, guile and wits with the marlin, and expends every last bit of himself for over three days of struggle. Bloodied and drained, he has his catch in the end, which he begins to drag shoreward. But sharks then fall upon the marlin, and the old man cannot battle them off with his harpoon. Though futile, Hemingway suggests that the old man’s struggle has transcendental value.H e makes frequent comparisons between the old man and Christ, and describes the old man in awe of the nobility of the marlin, even while locked in a life and death battle with it. He is described as musing, â€Å"But it is good that we do not have to try to kill the sun or the moon or the stars. It is enough to live on the sea and kill our true brothers† (Hemingway 75). In its tenor of unremitting futility the novel is modernist. The meaning discovered in the end is transcendental and religious, in which â€Å"the spirit of the individual† is pitched against â€Å"his biological limitations† (Walcutt 275). This is significant when we recall that Eliot too discovered religion later in life.In conclusion, in his poem The Waste Land Eliot expressed a feeling that conventional motivation of the artist was no longer relevant in the modern age, because the aspirations of the previous age, that which had motivated writers and artists in the Victorian era, had been rende red null and void. But at the same time it initiated a new quest in literature, which became a movement known as modernism, and especially employed by novelists. In their novels, which mostly emphasized the meaninglessness of modern existence, the modernist novelist nevertheless tends to dicover transcendental or religious meaning.Works CitedChinitz, David. T.S. Eliot and the Cultural Divide. Chicago: University of Chicago Press, 2003.Eliot, Thomas Stearns. The Waste Land and Other Poems. New York: Penguin Classics, 1998.Federman, Raymond. Surfiction: Fiction Now and Tomorrow. Athens OH: Swallow Press, 1975.Hemingway, Ernest. The Old Man and the Sea. New York: Simon & Schuster, 1995.Kafka, Franz. The Trial. Trans. Willa Muir, Edwin Muir. New York: Schocken Books, 1995.Sigg, Eric Whitman. The American T. S. Eliot: A Study of the Early Writings. Cambridge, UK: Cambridge University Press, 1989.Walcutt, Charles Child. American Literary Naturalism, A Divided Stream. Minneapolis: Universi ty of Minnesota Press, 1974.

Life After College

In high school and college we have guidance counselors, course requirements and teachers. But the minute we graduate into adulthood, it seems we are immediately expected to understand where to go, what to do, and how to get wherever we’re going next. Once we do land a decent job, we’re expected to know how to do whatever it is our boss asks us to do. Once the first paycheck comes, we’re supposed to know about taxes and healthcare and direct deposits and investing and saving for retirement. We go from being surrounded by our friends all the time in college to being surrounded by a scattered few once we graduate. With graduation fast approaching, I must now embark on the next phase of my life. I’d love to work at a small e-Learning company, which means I’d play lots of different roles. I’ve heard about it from a very good friend of mine. My job title would be Manager of Instructional Design. I will write the fact sheets. The website copy. I will work on the demos. The content, not the graphics. In the area of Project Management I’ll just manage the project. Check in with the development team. See how we're doing on the schedule, communicate with our clients, write all the design documents, project plans, change orders, etc. This is a new area for me. Untested waters. And I'm really excited about the project I'm working on. We've got a gig to help an organization with a large membership craft an e-Learning strategy. Such an opportunity! This will be my job. I hope! Like any other girl I hope I’ll have a very nice family. A good husband, brave children and a big house, of course.