...[pic] Marshall School of Business University of Southern California A207-03 Global Investors, Inc. I have a basic “gut” discomfort with the proposition that investment management as a profit-making function exists only in New York. -- Alistair Hoskins, chairman/CEO, Global Investors, London Bob Mascola, CFO of Global Investors, Inc. (GI), took a last look at his notes as he walked into the conference room where he and the other members of the transfer pricing task force would meet with Gary Spencer, GI’s CEO. The transfer pricing task force supervised by Mascola was meeting with Spencer to discuss the latest transfer pricing models that the task force members had identified. Mascola hoped the meeting would result in a final decision about the transfer pricing method that should be used to recognize profits in GI’s subsidiaries. Mascola knew that the meeting would be difficult. On repeated occasions, two of the members of the transfer pricing task force, Alistair Hoskins and Jack Davis, had engaged in heated debates about which transfer pricing model should be selected. Hoskins, chairman/CEO of GI’s London office, believed that regional offices—or at least the regional office he led—should be treated as largely autonomous profit centers so that the value created by these offices would be reflected in their financial statements. However, Davis, GI’s corporate vice president of operations, argued that virtually all of the investment...
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...performance that is deemed meaningful in the absence of at least some mention of the involved risk. However, the trouble for investors, who have just entered into the marketplace, involves the process of figuring where risk really lies, as well as what the difference between the various levels of risks. Relating to the manner, in which risk is fundamental to investments, a significant number of new investors tend to assume that risk is a well-defined and quantifiable idea. However, it is not the case. As such, a universally agreed definition of the term, and how it should be measured, has not been attained. Central to this paper are high-risk investments. It is a form of an investment where there is a larger percentage chance of capital loss or a high likelihood of underperformance. The purpose of this paper is to research high-risk investment brokerage firms that have been indicted or convicted of ethical violations to provide insight and understanding of this market segment. To realize this objective, the Internet will be used as the chief research method. The information sources will be derived from academic databases, such as Wiley Online Library and ProQuest. The given paper is divided into six sections. The first section will attempt to explain why investors may be attracted to high-risk investments, such as exchange-traded derivatives, global funds, and other complex investment vehicles. The second section will concern the analysis of the risk associated with exchange-traded...
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...The Global Capital Market Learning objectives • Articulate the benefits of the global capital market. • Understand why the global capital market has grown so rapidly over the last quarter century. • Be familiar with the risks associated with the globalization of capital markets. • Appreciate the risks and benefits associated with the Eurocurrency market, the global bond market, and the global equity markets. • Understand how foreign exchange risk impacts upon the cost of capital. This chapter discusses the form and function of the global capital market. The market is attractive because its size lowers the cost of capital for borrowers, and allows investors to diversify their portfolios, thereby reducing their risk. Advances in information technology, and the deregulation of financial services and the relaxation of regulations on cross-border capital flows have contributed to the growth of the global capital market. The chapter then goes on to explore the Eurocurrency market, the global bond market, and the international equities market. The opening case describes how ICBC, China’s largest bank, raised $21 billion in the international equities market. The closing case examines how China Mobile raised capital in international markets through a stock offering and a bond issue. OUTLINE OF CHAPTER 11: THE GLOBAL CAPITAL MARKET Opening Case: Industrial and Commercial Bank of China Introduction ...
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...during “Operation Car Wash” which has threatened the market and investors. On Friday, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) set a new record low for its share price in more than a decade, which saw its stock ranging between $9.51-$10.04. Petrobras stock tumbled 2.5% Friday on New York Stock Exchange (NYSE). The yield on its bonds surged sharply upwards. The Brazilian real hit its lowest in nine years. Disappointed investors and mutual funds agencies The current President Dilma Rousseff, who was the chief executive of Petrobras before taking the presidential throne in 2010, is not the only one, nonetheless,...
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...International Inc. is a global services provider supporting national security and foreign policy objectives around the world. It started out as an aviation maintenance business but now offers flight operations support and training, international development, intelligence training and support, contingency operations, security, and ground vehicle operations and maintenance support to foreign governments and commercial industries all over the world. DynCorp believes that because of its wide-ranging capabilities and ability to develop services to suit its customers, that it has unlimited potential to develop and energize its business prospects (DynCorp Investor Relations Code of Ethics and Business conduct, 2012). The majority of its annual earnings comes from the United States Federal Government (Atoro, 2014). DynCorp is committed to practicing honest, ethical business in accordance with best practices and all applicable laws of those nations in which they operate. They strive to practice the highest standards of integrity when dealing with customers and employees (Chuter, 2014). DynCorp strives to foster a work environment where employees are encouraged to ask questions, raise concerns or report violations where it is appropriate without fear of retaliation. This is driven by their “Code of Ethics and Business Conduct” which is a guide for making the right decisions in all facets of the work environment and which they consider essential (DynCorp Investor Relations Code of Ethics...
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...HR/personnel is the global workforce that is capable of going head-to-head with its competitors in the battle for dominance the global PC business. Thanks to the diversity of its workforce, Lenovo is able exceed market expectations Lenovo strives to attract, retain and develop its workforce Its employees must have skills and capabilities required for working in a global enterprise Fair share of women in management positions Lenovo engage same amount of Chinese and same amount of Americans in its top management team 2. What strategy do you think the company is pursuing? Does its staffing policy match its strategy? Lenovo is pursuing a geocentric staffing strategy/policy. Yes, the staffing policy matches the Lenovo’s business strategy, which is to exceed market expectations and be a strong player on the global market. So that Lenovo uses its staffing strategy, engaging the global workforce to fulfil its business strategy. Lenovo consider its workforce as the global workforce that is capable of going head-to-head with its competitors in the battle for dominance in the global PC business. 3. What are the strengths of Lenovo’s staffing policy? Can you see any potential weaknesses, or problems, that the company might encounter as a result of this policy? STRENGTHS Lenovo strives on retaining managers, engineers, salespersons (key people) in company by moving company’s headquarter to New York (otherwise it would lose them) According to Lenovo’s goal to become truly global enterprise with...
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...Was fundamental analysis redundant in the period during the Global Financial Crisis (GFC)? 3/21/2014 ABC Was fundamental analysis redundant in the period during the Global Financial Crisis (GFC)? Fundamental analysis is the process of evaluating the value of any security and certificate by analyzing the real time factors, which are based on qualitative and quantitative factors. Economic and the social factors also effect while you are finding out the intrinsic value of any security or asset. Fundamental analysis when made for evaluating the value of security all the factors that can affect the security considered like macroeconomic factors, microeconomic factors and the company based factors. Not only have the external factors about the internal factors also affected the value of any asset (Bedford, 2008). You need to consider in fundamental analysis: * Market analysis * Company analysis * Industry analysis For an investor the fundamental analysis is very important to invest in any asset or security. The investor when found the intrinsic value of security with its current value than this make easy for them to invest or not. Global financial crises are the period, which is experienced by the society, and the marketers, a situation of great difficulty in the world where nothing is stable in any state of the world. The economic situation in the global crises become worst and the purchase power of the customer reduces, and this is a difficult time for the...
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...extremely volatile year, largely due to ongoing uncertainty surrounding the eurozone sovereign debt situation Growth has slowed throughout the year, with the International Monetary Fund (IMF) cutting its 2011 Gross Domestic Product (GDP) economic growth forecast for Western economies from 2.5% to 1.6% Developed economies – with the US a major exception - are engaged in austerity measures while the emerging world is looking to dampen its much stronger growth to stave off any threat of inflation Any improvement next year rests largely on the eurozone finding an appropriate solution to its problems Against this background, many investors have fled to what they saw as safe havens, forcing gold prices to record highs and government bonds yields to generational lows Short-termism is rife in such volatile markets, creating opportunities in some asset classes for investors who can take a longer-term view Equities currently look to offer the best value, with many corporates in solid financial shape after applying their own austerity measures amid the credit crunch. Strong balance sheets are allowing ongoing dividend growth Share valuations remain low, reflecting the muted economic outlook in the West. This ignores two key factors: that many Western companies have growing Eastern earnings exposure, and the potential for emerging market equities to benefit from the region’s stronger macro outlook Core Western government bonds represent poor value, with short-term safe haven investing forcing...
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...Cross listing: a case study of Cliffs Natural Resources Inc. (CLF) About 50 U.S.-listed companies are cross-listed on NYSE Euronext, the EU's largest regulated equities market. What they've discovered is that Euronext listings are ideal for U.S.-listed companies that want to diversify their shareholder base, gain a European trading presence or increase their market visibility in the eurozone, the world's second largest source of capital. "Globalization means that companies, customers and suppliers have a presence in more locations than ever, and when these locations are in the eurozone, cross-listing on Euronext certainly increases the visibility of an enterprise or brand," says Marjorie Adams, chair of DLA Piper's capital markets group in the U.S. Other benefits of cross-listing on Euronext include the ability to trade and list in dollars and euros; the ability to attract investors whose mandates only allow investing in euro-denominated shares; the potential for a lower cost of capital through increased liquidity premiums on equity; typically lower bid-ask spreads than single exchange companies; and less information asymmetry between capital markets, as firms with multiple listings generally get twice the analyst coverage. A Euronext listing also allows European money managers to avoid certain regulatory filings and mandates for eurozone-only listed companies. In January 2008, Euronext made cross-listing even more attractive by introducing Fast Path, a streamlined and cost-effective...
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...Background. Royal Dutch Shell Group is one of the world’s largest oil corporations and one of the largest companies in Europe. The company was created as a result of a merge between Netherlands’ Royal Dutch and UK’s Shell Corporation. The case looks at the issue of price differentials between several equity listings in different markets from the perspective of investors seeking an arbitrage opportunity. Royal Dutch trades more actively in the Netherlands and U.S. markets, whereas Shell trades more actively in the United States. The result is that the Royal Dutch/Shell relative price moves positively with the Netherlands and U.S. markets and negatively with the U.K. market. Structure. The Royal Dutch and Shell Group’s structure has all of its subsidiary companies controlled by the holding group of the company. These companies include Shell Petroleum NV located in Netherland, The Shell Petroleum Company Ltd based in UK, and Shell Petroleum Inc. based in the United States. These companies are controlled by the two parent companies, which are Royal Dutch Petroleum and Shell Transport & Trading. The ownership is divided in terms of 60/40 ratios. The relationship between these groups of holdings are meant to be 60/40, which means that all the inflows coming and all the outflows made to shareholders are divided between the two holdings. This represents that one share of Royal Dutch and one share of Shell is entitled to the same cash flows. The structure of the company...
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...how the greater good will be affected in this merger. Within utilitarianism, a moral philosophy is developed that focuses on the consequences of specific actions. An action is done, then observed and then analyzed. After identifying all the people that were involved, one needs to ask the question, “Do the sum of good consequences outweigh the sum of the bad consequences?” Quantify all the good and bad consequences in the scenario and if the good consequences are greater than the bad consequences then the action was moral and vice versa. In this paper, the actions of the Bank of America-Merrill Lynch merger will be discussed, evaluated and quantified with the Richard DeGeorge Utilitarian perspective. Pinpointing the stakeholders in this case will show who was direct and indirectly affected and how they were affected. Furthermore, it will be discussed the overall affect it had on...
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...CHAPTER – 1 STOCK & EQUITY MARKET GLOBAL INSTITUTE OF MANAGEMENT | 1 INTRODUCTION ABOUT STOCK AND EQUITY MARKET GLOBAL INSTITUTE OF MANAGEMENT | 2 1.1 What is Stock ? In finance, a stock represents a share in the ownership of an incorporated company. In Industrial societies wealth used in production is owned in the aggregate mostly by Corporations rather than by individuals because of the huge investments required. This trend began in 17th-century England when merchants formed JOINT-STOCK COMAPNIES, pooling capital to be used jointly in trading and manufacturing. Participants then received dividends, shares of the common PROFIT proportionate to their original investments. The Definition of a Stock : Plain and simple, stock is a share in the ownership of a company. Stock represents a claim on the company’s assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing. The wealth of individuals includes claims against, or investments in, corporations. These are called securities, the two most common being bonds and stocks. Corporate bonds are evidences of corporate debt to the bondholder. Stocks are evidences of ownership, or equity. GLOBAL INSTITUTE OF MANAGEMENT | 3 Investors buy stock in the hope that it will yield income from dividends and appreciate, or grow, in value. 1.2 History of Stock Market Indian Stock...
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...After watching the Inside Job video, the term Global Economic Crisis of 2008 or Global financial Crisis that I understood is where a period of time, there was a great depression on workers, consumers, producers and the peoples due to major losses that happened globally between investment banks, insurance company, Audit firms, financial services firms and other multinational corporations. What are the causes that these entire gigantic firms led to major losses? This economic crisis had cost ten millions of people lost their savings, their jobs and their homes. The first part of the video was about Iceland country. Iceland is such a beautiful country with fresh air, foods, efficient operations of geothermal and hydroelectric and where the economic was stable in marketing before the crisis happen. Iceland is one of the high standard living countries. In 2008, the population is very high about 320,000 and the GDP of the country was $13billion, the bank had major losses about 100billions. During the year of 2008, Iceland banks collapses due to borrowers unable to settle their debts from lenders. Unemployment triples in 6 months. The three banks in Iceland which are Iceland’s banking, Kaupping and GLINTR had borrowed money which is three times the economics of Iceland. Government had financial deregulation. The government could not able to protect the citizen during this crisis. Collapses of major bank in US and Iceland are main causes to this crisis The major Investment banks which...
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...I. II. III. Introduction....................................................................................................................10 Overview of FDI in EMCs.............................................................................................14 Motivation, Location, and Decision-Making.................................................................15 A. Motivation ...............................................................................................................15 B. Locational Determinants of FDI..............................................................................16 C. Decision-Making .....................................................................................................19 Financing, Global Conditions, and Managing FDI Risks..............................................21 A. Financing Business Ventures in Emerging Markets ...............................................21 B. The Role of Banks and International Capital Markets ............................................23 C. Controlling and Managing Risks to FDI in Emerging Markets ..............................25 Conclusions, FDI Prospects, and Country...
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...economically, China enacted the Law on Joint Ventures using Chinese and Foreign Investment in 1979. * Since then, China has experienced a dramatic rise in FDI. The largest recipient of FDI among all developing countries, and it ranked second to the United States for FDI inflows since 1993. * By mid – 2002, total FDI in China had exceeded $700 billion and was invested in nearly 4, 00,000 ventures. * Japan, Taiwan, US are China’s most important sources of FDI. * China is world’s third largest country in area and largest in population, which makes it attractive to market-seeing FDIs. * It modified their practical aspects on trade by steadily adopting the principles of free trade. * China restricted imports & let foreign investors propose their preferred mode of entry by giving stringent criteria i.e. each foreign investment application should determine whether the investment was in the best interests of China – whether it helped in capital formation, promoted exports, created jobs, or transferred technology. * All FDIs had to go through an extensive process of the Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC) or provincial – level authorities with jurisdiction. * MNEs coveted China’s market for several reasons including its potential, performance, infrastructure, resources and strategic positioning. * China has about 1.3 billion inhabitants & its purchasing power has been increasing because of its strong economic growth. ...
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