...activity in the process of rapid industrialization. Based on national income and the development of their market infrastructure, the FTSE has divided the emerging markets into advanced emerging and secondary emerging countries. Moreover, advanced emerging countries are defined as “upper middle income GNI countries with advanced market infrastructures and high income GNI countries with lesser developed market infrastructures” (FTSE Glossary). According to the FTSE Global Equity Index Series, The Czech Republic is on the second position in the FTSE Advanced Emerging Countries Ranking, while Mexico is found on the fifth position. 3 Report on the purchasing power for the exchange rate between the US dollar and the Mexican peso and the Czech koruna After computing the Changes in Exchange Rates (Czech Koruna vs US Dollar and Mexican Peso vs US Dollar) and the Differential inflation rate (please see the computations performed in the excel file – also attached to...
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...statements. In this assignment we need to understand and analyze the impact of the Company FEMSA Annual Report with the two variables using on this report; Mexican pesos and U.S. Dollars. FEMSA, the largest beverage company in Latin America, started operations in 1890. FEMSA work thru three important roots: Coca-Cola FEMSA, FEMSA Cerveza (Heiniken Mexico) and FEMSA Comercio. (See Figure 1.1.) Figure 1.1 Participation of the operations of FEMSA Coca-Cola FEMSA represents the largest and most important bottler in Latino America and the second largest in the world, which represents the 16% of the volume around the world, this number represents the biggest bottler around the world in terms of volume (See Figure 1.2.) Figure 1.2 Principals Bottlers in the world for Coca-Cola Company The company has presence in Latin America, including Mexico, Brazil, Argentina, Colombia, and Venezuela to make and examples. FEMSA has had fusion with other important companies, the last 2010 FEMSA Cerveza make a fusion with Heineken, this Holland is one of the biggest beer company in the world, this fusion represents the rise of volume and presence in countries where FEMSA was not. Figure 1.3 Presence of FEMSA in Latin America FEMSA Comercio has had an important increased of revenue in the last years, in the past 5 years from 2,683 million of dollars to 5,028 million of dollars, OXXO it principal self-service for Comercio has risen the numbers of stores from 4,141 to 9,148 which...
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...Executive Officer From: Hongjie Pan, Assistant Chief Financial Officer On October 9, 2012, I attended a conference, and the speaker gave a presentation about a report entitled “Porsche Powers Profit With Currency Play”. This report was written by Stephen Power, and it was published in The Wall Street Journal on December 8, 2004. I would like to share what techniques this multi-international company is using to maximize their wealth. The main point of the report was that Porsche used its profit to do investments and hedged the appreciation of the US dollar. Porsche had a great market share in the United States and lots of revenue came from US buyers in US dollars. The Porsche Company betted that US dollars would drop so they bought put options to prevent the currency loss. I suggest Nike should learn from Porsche, and buy call options to prevent currency loss. From the presentation, I found out that Porsche gain more than 80% of the profit of a fiscal year by hedging in 2003. According to the article, “or up to 800 million euros ($1.07 billion) of the 1.1 billion euros Porsche reported for the fiscal year that ended July 31 – came from skillfully executing options.” It showed how important hedging was. Porsche made the right bet on US dollar depreciation in 2004. Porsche not only earned money by hedging the week US dollar, but also using new technology to lower the cost of material and using material more efficiently to produce cars. Lower the cost and higher the production, it...
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... A report by Sandeep Vete 1 DANGER #6: Collapse of US Dollar as world’s de-‐facto currency The modern US currency under the “Dollar Standard” is a FIAT currency but the underlined reality is that the world oil trade and the strength of US military backs the US Dollar. Source: w ww.beforeitsnews.com Demand for dollar is created by its “Petro-‐Dollar” status and mitigates the inflation to a large degree by distributing the consequences globally and not merely affecting United States. Essentially US writes the hot check and the world has to pay the bills. (When Will The Economy Collapse? 2013, July 24) This system is perfect till no one decides to twist the system like Iraq did in 2000 by selling oil in euros or Libya did by try pulling most of Africa off the dollar or like Iran is doing now. As long as US military...
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...representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas. ADRs help to reduce administration and duty costs that would otherwise be levied on each transaction. Introduction First introduced by the investment house of JP Morgan in 1927, ADRs are simple in concept. In the most basic terms, A United States bank or investment institution places a certain amount of stock of a foreign company into its vaults - the "depositary" part of the name - then allows investors to buy shares in that collection of stocks, priced in US dollars. Those shares, or receipts, can then be traded on regular stock markets almost as though they were shares held directly in the foreign company itself, only the arrangement is better for US investors. Since ADRs are traded in US dollars and are securities that originate within the United States, they carry none of the cross-border fees or other hassles that might ensue if an investor from Peoria were to try to buy stock directly in a South Korean steel mill. The worst most investors have to worry about are small fees, often a few pennies per ADR per year, charged by the depository institution to cover their costs of offering the service. Thus, in a sense, US investors gain access to the world through ADRs without having to leave the comfort of their own living rooms. Benefits 1. To The...
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...includes Mac OS (operating system), iOS (mobile operating system for the i-product line), iTunes, iLife, QuickTime player, Final Cut Studio, and iWork. Apple has retail stores in 45 states in the United States of America (US) as well as being located in 13 different countries. Additionally, the company also has an online website where product orders can be placed. Since its inception, Apple has steadily grown in net worth and is the largest publically traded company in the world (by market capitalization). Apple is also the largest technology company in terms of revenue and profit. Today, software and computer sales are only a small part of Apple’s operations. There are many important variables and factors that can affect the overall performance of any company, including Apple Inc., in terms of their relationship with their customers as well as other important entities who are involved in their supply chain. Additionally, since Apple has stores and manufacturing facilities located outside of the US, they must contend with exchange rate risk, interest rate risk, and commodity price risk. Risks Facing Apple Interest Rate Risk Apple Inc. faces many risks as both an investor and issuer. According to Apple’s most recent annual report (filed 10/26/11 for the period ending on 09/24/11), they are susceptible to global instabilities such as economic conditions, policies, laws, regulations, and natural disasters. Two significant risks posed by international trade...
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...trade deficits The exchange rates will increase. Because the trade deficits made a great demand of dollar, dollar became going up and the exchange rate will increase. 2. Increase in government budget deficits The exchange rates will increase. Because the government budget deficits will lead to the BOP deficits, as a result, the purchasing power of dollar will decrease and the demand of foreign currencies will increase, then the exchange rate will go up. 3. Inflation The exchange rates will increase. Because of the decline of the purchasing power of dollar, the demand of foreign currencies will go up. 4. Government provides tax breaks and other incentives for capital spending The exchange rate will decrease. Because these fiscal tools lead to a increasing purchasing power of dollar. 5. Good stock market performance (Dow Jones Index goes up) The exchange rates will decrease. Because the good stock market performance attract more foreign investors to buy dollars. 6. Government announcements an intention to intervene in foreign exchange markets to weaken a currency. The exchange rate will decrease. Because the currency which is weakened, the foreign exchange rate will decrease relatively. 7. Monetary growth The exchange rate will increase. Because of the great supply of dollar, the value per dollar will decrease and finally, the exchange rate will increase on the contray. 8. Increase in...
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... Gold will have its day in the sun at other points down the road, but the clouds on the horizon could portend still lower gold prices over the next couple of years. 6% 4% 2% 0% BRIC G7 + Eurozone (416) 594-8041 warren.lovely@cibc.ca Emanuella Enenajor (416) 956-6527 emanuella.enenajor@cibc.ca Andrew Grantham (416) 956-3219 andrew.grantham@cibc.ca “text text text” The Money Myth Gold’s allure has typically rested on two concerns about the alternative asset: money. Either inflation alone, or in concert with a steep currency depreciation, is seen as a reason for holding gold rather than the most prominent alternative, the US dollar. In terms of current inflation, it’s hard to see what anyone would be worried about. CPI inflation has all but melted away, not only in the US, but across the developed world (Chart 1). True, there’s been a bit more heat in the developing world, but for the four large players that make up the so-called BRIC group, inflation is still well below where it stood in 2011. Those in India might be somewhat more concerned, but it’s not clear that they would be better off piling...
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...over the years. The size of this sunshine industry of India grew from 150 million US Dollars to 50 billion US Dollars between 1990-1991 and 2006-2007. The growth of the IT industry has been very high in the last few years. The size of the Information Technology industry of India was 5.7 billion US Dollars in 1999-2000. After the turn of the century the industry experienced exponential growth to reach the 50 billion mark by 2006-2007. The projections about the size of India's IT industry present a very optimistic picture. The industry is expected to grow to double its current size by the year 2012. India's IT industry is expected to grow at an annual average rate of 18% in the next five years. The industry is also expected to cross the 100 billion US Dollar mark by 2011. One of the major areas of growth for the IT industry of India is by tapping the potential in the domestic market. The IT industry of India is largely dependant on the export market. Penetrating more into the domestic market would create further opportunities of growth for the IT industry. POLICES N REGULATION The projections about the size of India's IT industry present a very optimistic picture. The industry is expected to grow to double its current size by the year 2012. India's IT industry is expected to grow at an annual average rate of 18% in the next five years. The industry is also expected to cross the 100 billion US Dollar mark by 2011. One of the major areas of growth for the IT industry of India is...
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...Russia and China, and finally US national security and trade interests in Venezuela. 2. Nearly two times the size of the state of California according to the CIA World Fact Book, Venezuela is situated on the northern tip of South America. Venezuela’s available natural resources are abundant, and, according to Heather D. Heckle, in her article for the Encyclopedia Britannica, include some of the world’s largest natural gas deposits, iron ore, vast coal reserves, gold, diamonds,...
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...In this report, we are going to answer question 9 “who is buying US treasury bonds and why”. With the development of economic globalization, countries have a deep communication on the import and the export. Generally speaking, US dollar is the main way to trade in this environment. Therefore, to keep a relative stable exchange rate between home currency and US dollar becomes a topic for every country. Buying US treasury bonds is the main way to control the balance between home currency and US dollar. On the other hand, different countries have their own reasons to buy US treasury bonds except this main reason as well. We are going to answer this question from talking about the reasons China, Japan and EU buying US treasury, because they are the first three holders. To answer this question, we found the data from the website called “US department of the treasury”. The first data is a table showed “Foreign holdings of U.S. securities, by country and type of security, for the major investing countries into the U.S., as of June 30, 2011”. In this table, China, Japan and EU are the three main economic entities hold more U.S treasury bonds than others. In 2011, China and Japan were the first two countries held 1,727 billions of dollars and 1,585 billions of dollars respectively. European countries followed them after. While the UK held 982 billions of dollars, Luxembourg, Switzerland, Belgium and Ireland held 817,488,443, and 405 billions of dollars. The second table is called...
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...QBE Financial Risk Management Report Date: 18/04/2012 Team of Financial Risk Management Content Executive summary 2 Company background 2 Global Financial Crisis influence 2 Risk Exposures 3 Foreign Exchange Exposure 4 Transaction Exposures 4 Translation Exposures: 5 Interest Risk Exposure 5 Borrowing exposure 5 Investment exposure 6 Gross Profit exposure 6 Recommendations for Two Risk Exposures 6 Foreign exchange risk 7 Interest rate risk 7 Appendices 8 Reference list 11 Executive summary Company background Global Financial Crisis influence The impact from the global financial crisis(GFC) on us is complex. Compared to our competitors, the situation showed that little was the overall operation of our company negatively affected. It was both the positive and negative effects of GFC that contribute to this. From the downside, we do experienced significant loss in several areas. Our share price has going down from $22.4 to $16 per share during the financial year 2008-2009. Our equity decreased 28.5% on its value, and apparently, stroked the worst record in years. In addition to the impaired equity value, GFC also challenged us with a lower investment yield, a decreased risk margin, as well as increasing claims of large individual risk. First, due to the fall in equity market, lower interest rates and the loss on our property (account 29.5% of our portfolio), we keep a low yield from our investment. Only 2...
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...GCC to be hit if US debt ceiling crisis worsens Monday, 14 October 2013 DOHA: The economic consequences could be dire for the GCC states if political leaders in the US fail to agree on lifting their government’s debt ceiling by Thursday, economists here warn. For one, the oil-rich GCC states have massive investments in the US, the currencies of most of them are pegged to the dollar, and more importantly, a debt crisis in the US would likely have a disastrous impact on the world oil market. “A continuing debt ceiling crisis in the US would hit China hard, and this would have a cascading effect on the rising Asian economies,” said celebrated financial expert Abdullah Al Khater. Since the GCC states are dependent on revenues from oil and gas, the impact on Asian economies would mean that GCC oil and gas exports would suffer hugely, Al Khater told The Peninsula yesterday. Recalling the days of oil embargo in 1973, he said the GCC economies suffered immensely then as they posted huge budget deficits. “If the US fails to lift the debt ceiling, we would be entering a phase of uncertainties and immense difficulties.” When told about a recent Washington Post report that put the GCC’s exposure to the US at $257.7bn, Al Khater said that was a very conservative estimate. “I expect the figure to be much higher.” He said if one took into consideration the assets of the sovereign wealth funds of the GCC states as a whole, it would be in hundreds of billions of dollars. And much of these...
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...America has a governmental system set force for the country to run as smoothly as possible, there are still some aspects of it that in my opinion are detrimental to our country’s prosperity. One topic that I would like to go over is the United States Agency for International Development (USAID). This organization is in charge of working on several key areas in the rehabilitation of Afghanistan and the Afghan people. Another program designed in order to provide to the betterment of the country, the IRP, which stands for the Afghanistan infrastructure and rehabilitation program was put together in 2006, to create an economically sustainable environment in the country. The US army has put over 100 billion dollars into the rehabilitation of the Afghan economy and wellbeing. In an attempt to create jobs, the US has created various plants in metal processing, created power plants in an attempt to give the Afghan public power, which is very scarce in the area. The Taliban, a radical Islamic terrorist group, which originated in Afghanistan, domineers the country and every attempt that we have to rehabilitate it. Essentially the money that we put into the rehabilitation of the country gets funneled right back in to the Taliban, funding their practice and the warlord’s proliferation. Whether this money comes from the Taliban demanding it from the general people benefitting from the newly installed power, taking over any businesses developed, or domineering any developed Afghan infrastructure...
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...An Analysis of Weakening of Indonesian Rupiah against US Dollar Adrian Kohar Submitted in partial fulfillment of the requirement of the English 4 course 008201300005 December 1, 2015 Acknowledgements “I would like to express my deepest appreciation to all those who provided me the possibility co complete this report. A special gratitude I give to my lecturer, Mr. Daniel John Blanchett, whose contribution in stimulating suggestions and encouragement, helped me to coordinate my project especially in writing this report. Also another gratitude to God and my friend who help me finish this report in any way they can.” Table of Contents Acknowledgement …………………………………………………………………………………………………………..2 Table of Contents …………………………………………………………………………………………………………….3 Abstract …………………………………………………………………………………………………………………………..4 Introduction ………………………………………………………………………................................................5 Literature Review ……………………………………………………………………………………………………………..6 Methodology ……………………………………………………………………..................................................7 Findings …………………………………………………………………………………………………………………………….8 Conclusion ……………………………………………………………………………………………………………………….12 Recommendation …………………………………………………………………………………………………………….13 Bibliography …………………………………………………………………………………………………………………….14 Abstract This study was to discuss the causes of weakening of Rupiah against US Dollar. It was requested by lecturer in President University, Mr. Daniel Blanchett, currently...
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