Browsing by Author "Van Walbeek, Cornelis"

Now showing 1 - 3 of 3
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    Open Access
    An Examination of the Accuracy of Economic Country Forecasts produced by the Economist Intelligence Unit (EIU)
    (2018) Falconer, Nick; Van Walbeek, Cornelis
    This paper investigates the accuracy of Country-Level Forecasts for six variables: Real GDP Growth, Inflation (Consumer Price Index), Short-Term Interbank Rate, Budget Deficit (as % of GDP), Current Account Balance (as % of GDP) and the Unemployment rate. The data used in this analysis is produced by the Economist Intelligence Unit (EIU) and covers the period 1996-2013. The two forecast horizons of primary interest are Current-Year (t) and One-Year-Ahead (t+1) forecasts. A range of statistical methods are used to ascertain the accuracy of the EIU forecasts in 103 countries for most of the variables, while the accuracy of the Unemployment rate forecasts used data for 68 countries. Generally, the results confirm this paper’s four primary hypotheses: (1) EIU forecasts are more accurate than No-Change-Forecasts; (2) EIU forecasts for higher income countries have smaller errors than forecasts for lower income countries; (3) The accuracy of EIU forecasts decreases as forecast horizon increases; and (4) The accuracy of EIU forecasts was relatively weaker during the period of the Global Financial Crisis (2008-2009) than in other periods.
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    Open Access
    British American tobacco PLC: an analysis of the group's pricing strategy across its key markets
    (2022) Mathebula, Peter-Wallace; Van Walbeek, Cornelis
    Tobacco products are subject to substantial excise and sales taxes. In most countries these increase over time, but the rate of increase varies between countries and across different types of tobacco products. The tobacco industry is opposed to increases in tobacco taxes, changes in relative tax rates for different tobacco products, and adjustments to excise structures because these adversely affect their profits. However, the tobacco industry can mitigate these shocks by means of its pricing strategies. This paper investigates how the British American Tobacco Group has reacted to excise tax increases and declining industry volumes in order to maintain profitability in its 31 key markets (i.e. key countries) over the period 2006 to 2019. The Group's most common response to the excise tax increases was to overshift the excise increases. This meant that the retail price was increased by more than the increase in the excise tax. In a scenario of decreasing sales volumes and shifting consumer preferences, it is the relatively price-inelastic demand for the Group's products and its substantial market power which often make this strategy possible and successful. However, even though this strategy is most common, the trading environment differs in each market, which meant that the Group had to sometimes apply different strategies. These strategies include undershifting the tax (especially for cheaper brands), oversupplying the market in anticipation of excise increases, timed price changes, and adjusting product attributes in response to regulatory changes. Furthermore, as traditional combustibles are coming under increased pressure, the Group is developing new product categories.
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    Open Access
    Key Drivers In Stock Growth Of "Big Tobacco"
    (2018) Fitchet, Max; Van Walbeek, Cornelis
    This study attempts to determine some of the key drivers in stock growth of BAT, IMB, JTI and PMI (“Big Tobacco”) which have seen strong growth in stock pricing from 2000 to 2016. The study uses a combination of financial statements and market related metrics to determine key trends. The results show that “Big Tobacco” has increased its share in the global market through acquisitions and diversification into the vaping and logistics markets. Share buy backs and increased margins have helped offset the decrease in cigarette consumption and have encouraged a bullish view of the industry. However, increasing dividend pay-out ratios, a falling cash conversion cycle and an increased tax burden suggest future difficulties. The market continues to price growth into “Big Tobacco” stocks, and while risk is low in the industry the same level of growth cannot be expected in the future without some changes in the sector. Further consolidation of the industry could provide more opportunity for investors.