...Hogeschool Rotterdam | Why investors should invest in emerging markets | Counter argumentative essay | Quincy Barrow 11-7-2016 | Introduction Investors have been attracted to emerging markets since the early 2000s due to their huge growth potential during their economic transition from being a developing country into becoming a developed country. Between the year 2000 and 2011 the rapid growth in nations like Brazil, Russia, India and China - also known as the BRIC nations - has created many investment opportunities for foreign investors. Later countries like Chile, Egypt, Colombia, Qatar, United Arab Emirates, South Africa and Thailand have also been classified as emerging markets based on the MSCI benchmark. This essay touches on the reasons why investors should invest in emerging markets, which risks investors could have and how these risks could be mitigated. Emerging markets have been the drivers of the global economy According to Forbes (N.D.) over 70% of the global economic growth in the recent years has from emerging markets and their growing economies, 40% of which was estimated to have come from China and India. China’s purchasing power is expected to go beyond that of the United States by the end of 2016, despite the growth slowing down in recent years. Also, nations like China and India have had a significant contribution to the growth in the world’s GDP in the last decade, including in the 2008 credit crisis. With the up rise of countries like...
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...Global Management Session 1: Globalization and You as a Global Manager The session becan by showing a short video called ‘Did you know’ The video briefly pointed out how globalisation has reshaped the world in terms of social, economic, environmental and technological aspects. One of the key idea that the video clip demonstrated is that the economy in emerging markets will overtake the economy in developed countries by 2020 for the first time in human history. Fundamental concepts of the session- What is globalisation, how it has evolved and affected our lifestyles, the globalisation of markets and production Example of Starbucks and Boeing- How did these two firms take the opportunity of globalisation to way they used to operate, and expand in both their home country and overseas . The global economic activities are shifting towards emerging markets, e.g The BRICS Why and how big data will play an essential role in the aspects of business competition and managing a multinational company. Even though global companies account for the world/s ¼ GDP, ½ of these companies ‘profits are still generated from their home coutries, big question is, has globalisation made the world flat and removed the barriers to do business in the globe or do differences still exist across different countries. CAGE Framework- Cultural differences, Administrative differences, Geographic attributes, Economic distance Some examples of the frame work: 1. Cultural differences...
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...DEVELOPMENT OF DERIVATIVE MARKETS IN EMERGING MARKET COUNTRIES1 A. Background Derivatives are commonly used for managing various risk exposures, including foreign exchange, interest rate, and credit risks. By allowing investors to unbundle and transfer these risks, derivatives contribute to a more efficient allocation of capital, in many cases reduce market and portfolio volatility, facilitate cross-border capital flows, and create more opportunities for portfolio diversification. Despite rapid growth over the past several years, Emerging Market (EM) derivatives account for only about 10 percent of the total outstanding notional values in global derivatives markets. Compared to mature markets, the ratio of outstanding notional value of derivatives to market capitalization of the underlying asset markets is fairly small in most emerging economies and is mainly focused on sovereign risks. The most common issues that challenge the development of local derivatives markets are (i) relatively underdeveloped markets for the underlying assets; (ii) lack of adequate regulatory, legal and market infrastructure, and (iii) restrictions on the use of derivatives by local and foreign entities.2 The problem of misuse of derivatives is perceived to be more acute in emerging market countries where prudential regulation, credit information infrastructure, and risk management practices are not fully developed and maybe in conflict with reasonable economic, investment or portfolio objectives. This...
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...1 Best practice recommendations for emerging markets IPOs Published by Deutsche Börse AG in collaboration with Deutsche Börse Listing Partners 2 Preamble Preamble The following recommendations and suggestions are designed to help issuers as well as participating banks and advisors to address the special characteristics of an emerging markets company’s initial public offering (IPO) and thus to contribute to a successful IPO. They do not constitute mandatory procedures for conducting an emerging markets IPO. The specific features of each issuer should always be taken into account. Therefore, the following recommendations should not be treated as a comprehensive list of the issues to be considered in emerging markets IPOs. For the purpose of these recommendations, emerging markets IPOs are IPOs of companies whose management, ownership structure and operations are predominantly located in an emerging markets country. Additional information Details on financing options and access to the capital market through Deutsche Börse can be found at www.xetra.com/listing_e. The Listing Center also offers an index of expert capital market specialists: Deutsche Börse Listing Partners. These independent service providers can also be searched by area of business and region: www.xetra.com > Listing > Listing Partners Your contact at Deutsche Börse Listing & Issuer Services Phone +49-(0) 69-2 11-1 88 88 E-mail issuerservices@deutsche-boerse.com Finance your future. Made in Germany ...
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...businesses expanding internationally At Ernst & Young, we understand the challenges and we know what it takes to drive sustainable growth because we’ve helped many of the world’s most dynamic and ambitious companies develop into market leaders. Our global network of Strategic Growth Markets professionals are dedicated to serving the changing needs of fast-growth companies. Whether working with dynamic mid-cap companies or early stage venture-backed businesses, our professionals around the world draw upon their extensive experience, insight and global resources to help growing businesses reach their full potential. As well as providing traditional assurance, advisory, tax and transaction advisory services, our professionals work with you to reduce the complexity of legislation, help align your tax strategy with your business goals, expand into new markets and pursue mergers, acquisitions or other strategy transactions to take your business to the next level. We can provide guidance around how to manage and control your risks, so that you can approach the future with confidence. So whether your business thrives on entrepreneurial spirit, innovation or superior customer service – and regardless of your stage of growth – our Strategic Growth Markets team can help you take the next step. It’s not luck that makes leaders. Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering...
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...management in Moscow and constituted the primary qualitative data. Research questions are posed for further examination of conditions in Russia and the effects of such conditions on the entry mode decisions of MMEs. The study finds economic conditions to be the only important determinant of entry modes for large multinational manufacturing companies investing in Russia with other country factors playing no role in their choices. INTRODUCTION With the expansion of global business activity, the ability to analyze the key characteristics of potential host countries becomes increasingly important. The key to successful international market entry is an understanding of differences in conditions that exist when comparing one market to another. While developed countries still remain the major destination for foreign direct investment (FDI), emerging economies have become increasingly important locations for MMEs’ production. Changes...
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...operations in Chine since 1890s. The global economic reality was different back on time; the global market was geopolitically very limited and with few opportunities around. Chine is the key player among the Emerging Market countries and consequently in the global market, as well. Emerging markets countries were defined by Tamer, Gary and John(2012) as “...countries such as Brazil, China, India, Mexico, and Turkey that, in contrast to advanced economies, are experiencing rapid economic growth, industrialization, and modernization”.(254). Exxon Mobil has a very strong presence in Chine; with approximately 1,300 employees plus 300 in Hong Kong, a 2.25-million-tonnes-per-year LNG(Liquefied Natural Gas) sales and purchase agreements with PetroChina. Petro China is our strongest partner in Chine, which is also the National Oil & Gas Company of that Asian giant. Unarguably, Emerging Market Countries are very attractive due to their particular characteristics such as Abundant Natural and Mineral resources highly populated by young people, low cost-manufacturing, etc. However, most of them have few adequate infrastructure designated for commerce or industry, evolving legal systems, and most importantly a high-risk business environment. (Tamer et al, 2012). Those risks have been the so called traditional risks. More recently, another highly challenging risk has emerged: The Emerging Market Countries’ top firms enterprises have become global competitors, in some cases are competing directly...
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...businesses expanding internationally At Ernst & Young, we understand the challenges and we know what it takes to drive sustainable growth because we’ve helped many of the world’s most dynamic and ambitious companies develop into market leaders. Our global network of Strategic Growth Markets professionals are dedicated to serving the changing needs of fast-growth companies. Whether working with dynamic mid-cap companies or early stage venture-backed businesses, our professionals around the world draw upon their extensive experience, insight and global resources to help growing businesses reach their full potential. As well as providing traditional assurance, advisory, tax and transaction advisory services, our professionals work with you to reduce the complexity of legislation, help align your tax strategy with your business goals, expand into new markets and pursue mergers, acquisitions or other strategy transactions to take your business to the next level. We can provide guidance around how to manage and control your risks, so that you can approach the future with confidence. So whether your business thrives on entrepreneurial spirit, innovation or superior customer service – and regardless of your stage of growth – our Strategic Growth Markets team can help you take the next step. It’s not luck that makes leaders. Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 144,000 people are united by our shared values and an unwavering...
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...FOREIGN DIRECT INVESTMENT IN EMERGING MARKET COUNTRIES Report of the Working Group of the Capital Markets Consultative Group September 2003 This report reflects the views of private sector participants in a working group examining the determinants, trends and prospects of foreign direct investment (FDI) in emerging market countries. The views expressed should not be attributed to the staff and management of HSBC, members of the CMCG, the International Monetary Fund, and the World Bank. -2- Contents Page Main Findings ..........................................................................................................................3 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................................................
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...weaknesses, opportunities, threats, and trends that will impact the company in the future. With promising growth prospects in emerging markets, the company has implemented an aggressive plan to establish a dominating fast food throughout the world. This strategy poses several important risks and opportunities that shape the contents of the SWOTT analysis. Economic Trends Economic trends play a major role in the strategic decisions of Mexican Food Express. The brand has an ambitions global growth plan that is sensitive to economic changes. For example, the company reports that China and India are it’s main targets for new restaurant locations and expects see significant growth as economic conditions improve (Yum! Brands 2012). As income levels rise in these countries, it is expected that new franchise owners will be eager to implement proven restaurant concepts into the local community. In addition, higher incomes will provide greater opportunity for a loyal customer base. However, if economic conditions start on a downward trend, Mexican Food Express’s aggressive expansion could be threatened by insufficient demand for their product. If franchise owners are not finding the locations profitable, it could create irreparable damage to the company’s image abroad and force the closure of restaurants. Legal and Regulatory Forces Each new emerging market presents a unique mix of regulatory...
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...the document.] | Abstract This essay covers the economic, legal and social environment factors impacting Samsung and Apple. Tough economic conditions are forcing them to take their fight to the emerging markets. Social factors are forcing them to operate locally while being global companies while legal factors are making them to fight over patent infringement etc. The organizational culture is impacting their performance so they are trying to make it positive by involving employees in the decision making and making them more autonomous. The leadership style is pretty aggressive and they are taking higher risk to gain higher returns. Technological advancements means the rivals are also customers and vendors of each other as well. I have selected Samsung as it is the company for which I want to work after graduation. Samsung is famous for its electronic products specially smartphones and smart TVs. My second selection as per requirement is Apple Inc. Samsung’s biggest rival. Economic Environment Economic environment is particularly important for both Samsung and Apple because both are working in numerous developing and developed economies and are expending upon their foot prints globally. Economic factors are particularly worrying for both the companies as the economic crisis has negatively impacted the purchasing power of the consumers in the developed market hence forced them to look to the emerging markets for profitable ventures. Their macro environment, filled with...
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...An emerging market is a country that has some characteristics of a developed market, but does not meet standards to be a developed market. This includes countries that may be developed markets in the future or were in the past. Many businesses may feel that it is most effective to target an emerging market to increase and maximise profits because the market can become loyal to the brand, making the market more sustainable. When a business expands into an emerging market, there is the opportunity to become part of an economic system that is still forming. Deloitte, a worldwide financial firm, notes that companies in emerging economies must expand capacity and capability. As large companies build power plants, roads and dams, other businesses step in to provide the locals with the goods and services they need. As the region's economy develops, the businesses that open up shop earlier may have a better chance at building lasting relationships with customers, increasing profits in the long run. Access to new capital is what drives many businesses to take on the risks of doing business in emerging markets. As new economies emerge, untapped capital is up for grabs and building and maintaining a pipeline to those funds helps companies not only expand abroad, but also bring in new resources for domestic growth. Emerging market capital can breathe new life into companies that have maxed out potential for new capital domestically. Small businesses especially may have opportunities...
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...Chapter 1 Multinational Management in a Changing World MULTIPLE CHOICE 1. Businesses of all sizes are increasingly looking for global opportunities because |a. |Trade barriers are falling. | |b. |Money is flowing more freely across countries. | |c. |The world is becoming one interconnected economy. | |d. |All of the above. | ANS: D AACSB Analytic, Strategy PTS: 1 2. Globalization is |a. |The trend of businesses expanding beyond their domestic boundaries. | |b. |Increasing average temperature over the globe. | |c. |The increased use of global satellite communication systems. | |d. |A strategy of developing unique products for each nation in the world. | ANS: A AACSB Reflective thinking, Environmental influence PTS: 1 3. Which of the following would not be considered a basic source of globalization? |a. |Similar customer needs ...
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...companies and the ranking of Vodafone came down to number 10 in the year 2010 for the top 100 brands listed and that is published by Millward Brown. According to Brand Finance’s A Global Brand Survey done in the year 2010 Vodafone is ranked the 7th Most Valuable Brand. Best in Class Technology:- Vodafone is equipped with the most advance Infrastructural Network round the globe which helps Vodafone deliver the most unsurpassed quality of communication. There are over 200.000 base stations for the wireless signal Transmission and the network traffic is around 700 billion minutes and over 90 pet bytes of data per year, and the peak download speed is around 28.8 Mbps. This is ultimately serving the Vodafone’s customers to best services in the market. Vodafone came up with a new Service in the year 2010 named as “Vodafone 360” which is an excellent service for the customers who are wanting to be connected everywhere and this particular service is perfect for customers who want to access the latest information available on the internet by keeping their contacts in that. Vodafone 360 is connected to the latest updates from the popular social networking sites, such as Face book, Msn and skype, so Vodafone 360 users can stay update from their Friends and latest news. Vodafone was the First operator to Provide DRM- Free Bundles and has the largest Digital music Subscriptions In Europe where are over 500,000 Customers. Global presence and diversification revenue Vodafone has expanded its...
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...Special Report Investing in Emerging Market Currencies A Whole New World of Opportunity Editor: Evaldo Albuquerque World Currency Watch 98 S.E. 6th Avenue, Suite 2 Delray Beach, FL 33483 USA USA Toll Free Tel: (888) 358-8125 Email: http://worldcurrencywatch.com/contact-us Website: www.worldcurrencywatch.com Copyright © 2011 by World Currency Watch. All international and domestic rights reserved. No part of this publication may be reproduced in any form, printed or electronic, without prior written permission from the publisher, World Currency Watch. Notice: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold and distributed with the understanding that the authors, publisher and sellers are not engaged in rendering legal, accounting or other professional advice or service. If legal or other expert assistance is required, the services of a competent professional advisor should be sought. The information and recommendations contained in this brochure have been compiled from sources considered reliable. Employees, officers, and directors of World Currency Watch do not receive fees or commissions for any recommendations of services or products in this brochure. Investment and other recommendations carry inherent risks. As no investment recommendation can be guaranteed, the Society takes no responsibility for any loss or inconvenience if one chooses to accept them. Any information or statements contained...
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