Thesis (MBA)--Stellenbosch University, 2006. / ENGLISH ABSTRACT: Weather derivatives, a new breed of financial assets, allow firms to manage
weather risk that disturbs their activities and may lead to variability in earnings
and operating cost. Considering that nearly 20% of the U.S. economy alone is
directly affected by the weather, weather derivatives are an important
development in the area of risk management.
This study project explores the concept, functioning and pricing of weather
derivatives by reviewing available literature on the topic. It then investigates
international weather derivative markets to establish which markets are thriving
and what lessons can be learnt from them. This then forms the basis for a set of
requirements for developing a weather derivative market in South Africa. Finally,
the study project makes a number of recommendations for developing a weather
derivative market in South Africa.
The findings suggest that, in the absence of a deregulated energy industry,
South African suppliers of weather derivatives need to target small·medium size
organisations, specifically within the agricultural industry, in order to grow market
liquidity. Furthermore, these suppliers need to attract capital market investors
either by marketing weather derivatives as a diversification tool to portfolio
managers, or by issuing weather·linked bonds as a more familiar investment
product for investors. It also suggests that weather data problems can be
resolved through, among others, data cleaning and data enhancement
techniques and should therefore not impede the growth of a weather derivative
market in South Africa. / AFRIKAANSE OPSOMMING: Weer opsies, 'n bundel nuwegenerasie finansiele instruments, stel maatskappye
in staat om die invloed van weer op hulle besigheidsaktiwiteite, soos byvoorbeeld
die variasie in inkomste en operasionele koste, beter te bestuur. Weer opsies
verteenwoordig 'n belangrike ontwikkeling in die area van risikobestuur,
inaggenome dat bykans 20% van die V.S.A. ekonomie deur die weer geaffekteer
word.
Hierdie werkstuk ondersoek die konsep, funksionering, en prysbepaling van weer
opsies deur die oorsig en evaluering van die beskikbare literatuur oor die
onderwerp. Verder word die internasionale mark vir weer opsies ondersoek om
vas te stel waar die grootste suksesse behaal word en watter lesse daaruit
geleer kan word. Laastens word daar 'n aantal aanbevelings gemaak vir die
ontwikkeling van die weer opsie mark in Suid-Afrika.
Die werkstuk bevind dat die verskaffers van weer opsies in Suid Afrika, in die
afwesigheid van 'n gedereguleerde energie sektor, klein to medium
sakeondernemings (veral in die landbou sektor) moet oormerk en teiken, ten einde
mark likiditeit te verhoog. Verskaffers kan kapitaalmark beleggers betrek deur
die produk te bemark as 'n diversifisering instrument vir portefeuljebestuurders,
of deur die aanbieding van weer geassosieerde verbande as 'n meer alledaagse
beleggingsproduk. Daar word verder bevind dat data kwaliteit probleme
aangespreek kan word deur gebruik te maak van data-skoonmaak en -
verbeterings tegnieke, en dat dataprobleme dus nie 'n effek behoort te hê op die
groei van die weer opsie mark in Suid-Afrika nie.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/50596 |
| Date | 12 1900 |
| Creators | Faure, Steven Gordon |
| Contributors | Smit, E. v.d.M., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | 86 p. : ill. |
| Rights | Stellenbosch University |
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