Risk Management-KEU442: Analysis of Astra International (ASII) Company Stock, Business Risk and Business Portfolio

Astra International (ASII)

• Sector: MISCELLANEOUS INDUSTRY

• SubSector: AUTOMOTIVE AND COMPONENTS

PT Astra International Tbk (ASII) is an investment holding company with interests in the automotive business, financial services, heavy equipment, agribusiness, information technology and infrastructure. Astra was established initially as a trading company based in Jakarta in 1957, Astra continues to grow into one of the leading company groups in Indonesia with solid support of internationally renowned strategic partners Since 1990 the Company has been listed on the Indonesia Stock Exchange, the company name was correspondingly changed to PT Astra International Tbk. Astra manages six core businesses, namely Automotive, Financial Services, Heavy Equipment and Mining, Agribusiness, Infrastructure and Logistics, and Information Technology.

MOTTO: Per Aspera Ad Astra

AIM: Prosper with the Nation

ASTRA PHILOSOPHY:

• To be an Asset to the Nation

• To Provide the Best Service to Our Customers

• To Respect Individuals and Promote Teamwork

• To Continually Strive for Excellence

VISION:

• To be one of the best managed corporations in Asia Pacific with an emphasis on sustainable growth by building competence through people development, solid financial structure, customer satisfaction and efficiency

• To be a socially responsible corporation and to be environmentally friendly

ANALYSIS

	ASII	JKSE
Highest	0.1002747	0.0727
	26/05/2010	26/05/2010
Lowest	-0.0944575	-0.0888
	22/09/2011	22/09/2011
average return	0.0014171	0.0008
Stdev	0.0211401	0.0126
CV	14.917426	15.0955

There are many factors that influence the stock fluctuation. It can be caused by the economic, political, and societal issues that will cause the market to change. Such as inflation ,earnings ,oil/energy prices ,war , and fraud. Some of these factor have serious long-term implications, while others may only cause temporary or short term implication. The market cannot stand surprises and when there is the chance that something may change, it will give impact to the market behaviour.

Based on the graph, the highest point is placed at 26th may 2010, this were happened resulted to the fluctuation of crude oil price. On may 2010, the crude oil price keep declining causes the crude oil traders became pessimistic about the global situation. And this situation give a big impact on the stock market as stock market and oil price works in opposite direction, with the decreasing of oil price that were happened,it leads to the increasing of the return of stock market.

Based on graph, the lowest point of JKSE and ASII are the same which is at 22nd September 2011. This market conditions in 2011 are similar to what happened in 2008, The differences is what happened on 2008 were affected by the global financial crisis while this bottom point at september 2011 happened because of an ongoing financial crisis resulted from the inability of countries in particular European country to repay its debt, thus becoming a widespread issue and global nature. Which also known as the european sovereign debt crisis or usually referred as Eurozone crisis.

Based on the calculation using slope function in excel and also regression analysis, I got the same Beta which is 1,284671. As the definition stated that Beta shows measurement of a stock's volatility in relation to the rest of the market. with beta 1.28 means if the market return is change by 1 than the stock would change by 1.28, this condition can be seen through the graph of stock and market return above. And because of the beta of Astra International is greater than 1 it means that ASII can be classified as aggressive stock.