I am a business analyst for an Australian investment bank, The Flying Emu. I was asked by my manager to conduct an analysis for a Singaporean pharmaceutical company. The company seeks advice from the bank as to whether it should follow the strategy of many multinational corporations, like Acer and Toyota, and establish production facilities in Mainland China…
Its population is estimated to be about 1,306,313,812 as of July 2005 making it the world's most populous nation. It has strictly advocated the "One child policy" in 2002 to control its population but the downside of it is that it is now one of the rapidly aging nations in the world. Its population is said to peak to 1.6 billion by 2050 before stabilising.
Culture: In China, business meetings are often very slow, and the businesses are built on assurance of a good relationship. The person in charge is addressed most respectfully, and refusal of ethnic or exotic food or drink is considered as a slight. All business done in China will need to be programmed for a long term since it takes a while to establish trust and run the enterprise in the Chinese landscape. Business deals and negotiations are better done with the presence of a local partner who not only deals with the corruption in the government sector but is also accustomed to dealing with local labour and mitigates risks due to cultural differences.
Economy: China's economy grew at an average rate of 10% per year during the period 1990-2004, the highest growth rate in the world. China's gross domestic product (GDP) grew 9.3% in 2003, and even faster, 9.5%, in 2004, despite attempts by the government to cool the economy. China's total trade in 2004 surpassed $1.1 trillion, making China the world's third-largest trading nation after the U.S. and Germany.
The Chinese government is firmly committed to economic reforms and opening up to the outside world. Government policies have moved markedly towards allowing market forces influence economic activity and have been reformed in order to assist in the progress of the price determination, foreign trade and investment, exchange rates, entry barriers, internal markets etc.
All this seems to have paid off and at this current rate of growth China is supposed to have the fourth largest GDP by 2010.
The immediate years to follow are crucial for China. China's accession to the World Trade Organization (WTO) in 2001, China presents a vast market that has yet to be fully tapped and a low-cost destination for export-oriented production because it is labour intensive and has a surplus of labour due to its enormous population.
Environment and infrastructure: China is one of the most polluted nations in the world due to its rapid industrial advancement at the cost of its natural resources. A 1998 World Health Organization report on air quality in 272 cities worldwide concluded that seven of the world's 10 most polluted cities were in China. It is no surprise that respiratory and heart diseases related to air pollution are the leading cause of death in China. Most of its rivers are polluted to some degree and half of its population does not have access to clean water. Water scarcity is a rampant problem. China's leaders are increasingly paying attention to the country's severe environmental problems. In recent years, China has strengthened its environmental legislation and in 1999, China invested more than 1% of GDP in environmental protection, Beijing is investing heavily in pollution control, as it is the host of the 2008 Olympiad.
Education: China was long lagging behind India for its mastery over the English language. ...
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(“International Corporate Finance College Essay Example | Topics and Well Written Essays - 2000 words”, n.d.)
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(International Corporate Finance College Essay Example | Topics and Well Written Essays - 2000 Words)
“International Corporate Finance College Essay Example | Topics and Well Written Essays - 2000 Words”, n.d. https://studentshare.net/business/293556-international-corporate-finance-college-essay.
Share price refers to the price of a single share that company issues for subscription. While taking decision on share subscription, an investor compares the share price with company’s financial statements.
This is possible through conducting a country risk analysis, where the political and economical risks of the country would be evaluated in details in order to take decisions for the same. The country chosen is South Africa and gold would be best option when it comes to choosing mining mineral in South Africa.
Afterwards the political and the financial risks associated with conducting business in both of the countries have been discussed in detail. The foreign direct investments (FDI) and their influence on the economy of both of the countries have been studied in the paper.
Any change in the political leadership of the country/region could trigger a change in the economic scenario, specifically, bond markets. A populist government might hike the rate of interest from Fixed income securities. Another leader might want to bring down the rates of such instruments.
The Company has access to a large inventory of hotel rooms; has developed its own technology, which searches for hotel inventory to be used by travel agents and Internet portals, and owns or has agreements with travel agents for the distribution of its inventory.
However, it is not the only factor. The most important aspect, perhaps, is the close complexity of relations and interdependence between payout policy and major part of the financial and investment decisions the companies make:
Management and the board of directors must decide the level of dividends, what repurchases to make (and the mirror image decision of equity issuance), the amount of financial slack the firm carries (which may be a nontrivial amount; for example, at the end of 1999, Microsoft held over $17b in financial slack), investment in real assets, mergers and acquisitions, and debt issuance.
(Bodie et al., 2005). The CAPM is based on a number of assumptions, which have been attacked by a number of researchers. For example, the CAPM assumes that all investors invest only for a single holding period, which is not the case in practice. In addition, the CAPM assumes that all investors borrow and lend at the risk-free interest rate which is also not feasible in real life.
The main question answered by the report is: "Whether we should invest into Chinese production facilities or" Additionally it analyses the situation on the Chinese market and gives recommendations concerning the operation on it. At first, the economic situation is discussed both for the whole China and for its pharmaceutical industry.
From the list above, it would be advisable to undertake a forward contract hedge since it offers the least cost for the company. The plan calls for a forward exchange rate of $1.48 / agreement with the UK supplier for a 90- day due date.
This financial agreement is a swap that involves the exchange of principal and interest in one currency for the same in another currency after a specific period of time.
It is headquartered in London, the United Kingdom and employs about 6,900 people in its subsidiaries with a further 2,300 employed in joint ventures The group participates mainly in four markets: food and beverage; industrial; pharmaceutical and personal care; and animal feed.
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