Case Study on Bp Oil Spill Essay

832 Words Aug 31st, 2010 4 Pages
GROUP PROJECT- CASE STUDY | A report submitted in partial fulfillment of the course | | MODERN INVESTMENT & PORTFOLIO MANAGEMENT | INSTRUCTORS: PROF. S.K. BARUA PROF. J.R. VARMAACADEMIC ASSOCIATE: MS. VAISHALI SATTAREPORT PREPARED BYGROUP 12MEENAKSHI DEOGAM M. SHYAMNIMISHA SAXENARAGHAV YADAVROHAN ANANDDATE OF SUBMISSION: 24TH AUGUST, 2010 | |

Effect of BP oil spill and subsequent market reaction on the assets of pension funds and mutual funds

Case Facts:- * 20th April 2010 – an explosion caused by blowout on Deepwater Horizon rig kills 11 crewman (including 9 Transocean employees) and ignites a fireball visible from 35 miles. * Deepwater Horizon was leased to BP
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DiNapoli, trustee of the fund, said it held 19 million BP (BP) shares at the time of the explosion. Since then, the beleaguered oil giant's stock price has fallen 50%, which translates into a loss of up to $574.6 million in value to the fund if it held on to the shares. [http://money.cnn.com/2010/06/23/news/companies/pension_funds_sue_BP/index.htm] * The California Public Employees' Retirement System (CalPERS), the United States' largest public pension fund, owned 58.2 million BP shares valued at $585.7 million on April 20, according to Clark McKinley, a fund spokesman. As of June 9, the fund owned 60.1 million shares worth $345.3 million, a mere fraction of CalPERS' $205.2 billion total market value. [http://money.cnn.com/2010/06/23/news/companies/pension_funds_sue_BP/index.htm] * CALPERS and CalSTRS have a combined $337bn in assets of which the value of BP holdings has plummeted by $349m since the oil spill [http://www.ft.com/cms/s/0/b7aaf88c-9ff1-11df-8cc5-00144feabdc0.html] * BP oil disaster costs US state pensions $1.4bn [http://www.globalpensions.com/global-pensions/news/1687023/bp-oil-disaster-costs-us-state-pensions-usd14-billion-value] * BP to set aside $32.2bn to cover oil spill costs [http://www.bbc.co.uk/news/business-10770252] * BP suspends

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