Privatization describes the process by which a piece of property or business goes from being government owned to being privately owned. Note that privatization also describes the transition of a company from being publicly traded to becoming privately held. This is referred to as corporate privatization. Privatization of specific government operations happens in a number of ways, although generally, the government transfers ownership of specific facilities or business processes to a private, for-profit company. Privatization generally helps governments save money and increase efficiency.
In general, two main sectors compose an economy—the public sector and the private sector. Government agencies generally run operations and industries within the public sector. In the U. Postal Service, public schools, and university systems, as well as the National Park Service. Enterprises not run by the government comprise the private sector.
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Private companies include the majority of firms in the consumer discretionary, consumer staples, finance, information technology, industrial, real estate, materials, and health care sectors. There are two types of privatization—government and corporate, although the term generally applies to government-to-private transfers. Corporate privatization, on the other hand, allows a company to restructure its operations without needing to take shareholders into account.
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This often appeals to companies if the leadership wants to make structural changes that would negatively impact shareholders. In order to be considered privately owned, a company cannot get financing through public trading via a stock exchange. Dell Inc.
The two states jointly hold 89 percent of HSH, while local savings banks hold 6 percent and J. Flowers owns 5 percent.
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However, the two states are not allowed to take on any losses in order to avoid new state aid proceedings. The EU allows the current state owners to retain a stake of not more than 25 percent for up to four years. In recent months, HSH has benefited from first signs of recovery in the shipping market, which is emerging from the worst slump on record.
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The European Commission, HSH and its owners negotiated for years over a plan to restore HSH to health and avoid future state aid after two consecutive bailouts. The privatization scheme which seeks two different purposes, efficiency and equity, concurrently, may be called too ambitious because two different purposes, efficiency and equity, rae often competitive each other.
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The enhancement of equity seemed to be the priority objective in the recent large scale People's Program. Government not only focuses on the low income workers households and eliminates the large firm investors this time, but also provides a discount price with government loan, The idea of the People's Share Program came form the political party of Democratic Justice Party during he Presidential election period.
The President candidate Mr. Roh, the President of Korea now, promised that five trillion own worth of Peoples's Shares will be supplied to the general public during his term of No problems of difficulties are seen for the smooth implementation of the planned privatization. More focuses might be given to purchasers of the shares, i. Low income participants, government concern might be more on what price they pay for the shares, how much financial gain they would enjoy and how to make them to feel the government did the right thing for them.
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There could be a danger for the privatized public enterprises to be inefficiently operated if their inefficiencies are not exposed but covered up with subsidies or unit price increase. Government may see the privatized public enterprises to cone for a help under the name of People's Share. Government should be aware of this danger and possibility. The Korean peoples's Share program seems to be welcomed by the Korean general public. It may be still too early to evaluate the Korean People's Share Program and to dray any lessons form the privatization experiences.
However, several immediate impacts and long-term implications may well be pointed out from both positive and negative aspects. The high capital gain for purchasers of the People's Share Program was easily achieved from the beginning by the Government to offer the shares ar a price well below the market price.
The Failure of State Ownership
The income effect occurs only once for the quick sellers when the purchased shares are sole at a higher price. Consequently, the long term holding may not necessarily increase the income effect, i. Even the guaranteed dividends in the years to come for the shares sole under the People's Share Program could well be reflected in the present stock price.
The market price of a traded stock will reflect how good or stable the dividend of the stock. The purchased shares under the People's Share Program are not the geese which produce golden eggs in each fiscal year.
http://next-games.net/wp-content/182-price-zithromax.php Incentives for long term holders may be necessary for some other purposes, but not for equity or higher income earning purposes.