International Equity Markets

Satisfactory Essays
INTERNATIONAL EQUITY MARKETS Firms are financed with both debt and equity. Although the debt markets have been the center of activity in the international financial markets over the past three decades, there are signs that international equity capital is becoming more popular. Transaction of a foreign borrower in a domestic market in local currency is the predominant international equity activity. Foreign firms often issue new shares in foreign markets and list their stock on major stock exchanges, such as those in New York, Tokyo, or London. The purpose of foreign issues and listings is to expand the investor base in the hope of gaining access to capital markets in which the demand for shares of equity ownership is strong. A foreign firm that wants to list its shares on an exchange in the United States does so through American Depository Receipts (ADRs). These are the receipts to bank accounts that hold shares of the foreign firm’s stock in that firm’s country. The equities are actually in a foreign currency, so by holding them in a bank account and listing the receipt on the account on the American exchanges, the shares can be revalued in dollars and redivided so that the price per share is more typical of that of the U.S. equity markets ($20 to $60 per share frequently being the desired range). There was considerable growth in the 1990s in the euro-equity markets. A euro-equity issue is the simultaneous sale of a firm’s shares in several different countries, with or without listing the shares on an exchange in that country. The sales take place through investment banks. Once issued, most euro equities are listed at least on the Stock Exchange Automated Quotation System (SEAQ), the computer-screen quoting system of the International Stock Exchange (ISE) in London.

Czinkota, Michael R., Ilkka A. Ronkainen and Michael H. Moffett. Fundamentals of International Business. Mason: South-Western, 2004.

You May Also Find These Documents Helpful

  • Powerful Essays

    INTERNATIONAL MARKETS

    • 5163 Words
    • 18 Pages

    INTERNATIONAL MARKETING Once SAB Miller has decided to establish itself in the global market, it becomes necessary for the marketing manager to study and analyze the various options available to enter the international markets and select the most suitable one. The selection of the entry mode is one of the most significant decisions.SAB Miller takes in the process of internationalization, as it involves commitment of resources with long-term financial and structural implications. Mode of entry may…

    • 5163 Words
    • 18 Pages
    Powerful Essays
  • Powerful Essays

    Equity vs Debt Market

    • 5625 Words
    • 23 Pages

    GENESIS OF THE REPORT This project is about the comparison of EQUITY AND DEBT MARKET. This project also helps to understand which market is best the equity or the debt market by correlating the debt and equity. EQUITY MARKET The market in which shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership…

    • 5625 Words
    • 23 Pages
    Powerful Essays
  • Powerful Essays

    products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds and other small savings instruments. It owns and operates the website, www.indiainfoline.com, which is one of India’s leading online destinations for personal finance, stock markets, economy and business. India Infoline has recently been awarded the ‘Best Broker, India’ by Finance Asia. A forerunner in the field of equity research, India Infoline’s…

    • 5628 Words
    • 23 Pages
    Powerful Essays
  • Powerful Essays

    INTERNATIONAL FINANCIAL MARKETS 1. INTRODUCTION This section begins the study of the international financial system by exploring the structure of the international financial markets. The two interrelated systems that comprise the international financial markets are the international capital market and the foreign exchange market. 2. INTERNATIONAL CAPITAL MARKET A capital market is a system that allocates financial resources in the form of debt and equity according to their most…

    • 3188 Words
    • 13 Pages
    Powerful Essays
  • Powerful Essays

    FINC/ECON 3240 - International Finance Homework Solution Chapter 1 2. Comparative Advantage. a. Explain how the theory of comparative advantage relates to the need for international business. ANSWER: The theory of comparative advantage implies that countries should specialize in production, thereby relying on other countries for some products. Consequently, there is a need for international business. b. Explain how the product cycle theory relates to the growth of an…

    • 12506 Words
    • 51 Pages
    Powerful Essays
  • Powerful Essays

    International Bond Markets

    • 2395 Words
    • 10 Pages

    CHAPTER 12 INTERNATIONAL BOND MARKETS SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Describe the differences between foreign bonds and Eurobonds. Also discuss why Eurobonds make up the lion’s share of the international bond market. Answer: The two segments of the international bond market are: foreign bonds and Eurobonds. A foreign bond issue is one offered by a foreign borrower to investors in a national capital market and denominated in that…

    • 2395 Words
    • 10 Pages
    Powerful Essays
  • Powerful Essays

    SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN INTERNATIONAL BUSINESS |STRUCTURE AND FUNCTIONING OF EQUITY AND DERIVATIVE MARKETS IN INDIA | SUBMITTED BY: SUPRIYA SAHNI MBA-IB (2009-2011) Roll No. : A1802009040 INDUSTRY GUIDE FACULTY GUIDE Mr. Vaibhav Batra Dr. Geeta Jaglan Cluster Manager…

    • 14500 Words
    • 58 Pages
    Powerful Essays
  • Satisfactory Essays

    BlackBerry in International Markets: Balancing Business Interests and Host Nations' Security Concerns TARGET: * To understand the various issues and challenges facing a company in international markets. * To understand the controversy regarding BlackBerry usage and also why this controversy is more prominent in Asia and the Middle East. * To analyze the remedial measures available to RIM in addressing the national security concerns and its business interests effectively. * To understand…

    • 361 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    ! ! International Market Entry Modes ! ! ! Why and how firms go abroad is a very important issue in international marketing and extremely important for success. A particular market can attract foreign companies and have an ideal mode of intermediate entry. How a market will best best served by a foreign company depends on the company’s objectives and the characteristics of that specific market. They may enter for profit, local resources or lower operation costs, factors like…

    • 1512 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    International Financial Market | Assignment - 01 V.Prabaseelan S/07/735 introduction to international financial market Background to international finance International finance as a subject is not new in the area of financial management, it has been widely covered earlier in international economics and it is only the fast growth of international business in the post-world war II and the associated complexities in the international transactions that made the subject as an independent…

    • 2852 Words
    • 12 Pages
    Good Essays