Securitization of the future flow-backed receivables is a new phenomenon in developing economies. Future Flow Securitization has grown in emerging markets in response to finding lower cost funding instrument by investment grade firms in the emerging market economies where their abilities were hampered by sovereign rate ceiling. While many of these companies historically relied on bank loans, or straight debts syndicated by major foreign banks in the past, rising volatility of interest rates and foreign exchange rates as well as reduced risk tolerance of major lenders have pushed these institutions (sovereign and private companies) toward an alternative vehicle such as future flow securitization.… Read the rest
Global Investment Management
Effective Communications in Investor Relations
Corporations worldwide work daily to increase the value of their stock for the investing public. In order to exploit this value, businesses must constantly make every effort to extensively communicate to their investors and potential investors. In view of this, investor relations are a vital part of business strategy, principally in the area of communication. Corporate departments involved with investor directions must make a necessary connection between efficient communication and company goals. Since communication is starting to play such an important role in investor relations, corporate communication programs are being created not only to participate in financial areas, but also to take part in media relations and other public communication.… Read the rest
Case Study: The Story of Warren Buffett
Warren Edward Buffett, born August 30, 1930 is a U.S. investor, and philanthropist. He is one of the most eminent investors in chronicle, the basic shareholder and chief executive officer of Berkshire Hathaway and in 2008 was ordered by Forbes as the 2nd most robust person in the world on an approximated net worth of around $62 billion.
Buffett is often called the “Oracle of Omaha” or the “Sage of Omaha’ and is noted for his adhesiveness to the value investing philosophy and for his own frugalness in spite of his huge riches. Buffett is also a famed altruist, having engaged to impart 85 percentage of his fate to the Gates cornerstone.… Read the rest
Emerging Trends in International Capital Markets
Three interrelated developments in global capital markets are:
- The sustained rise in gross capital flows relative to net flows;
- The increasing importance of securitized forms of capital flows; and
- The growing concentration of financial institutions and financial markets.
Taken together these trends may signal what some others have referred to as a ‘quiet opening’ of the capital account of the balance of payments, which is resulting in the development, strengthening and growing integration of domestic financial systems within the international financial system. Finance is being rationalized across national borders, resulting in a breakdown in many countries in the distinction between onshore and offshore finance.… Read the rest
Emerging Markets for International Capital Investments
Of late emerging markets have become a buzzword among the international investors for reaping greatest potential rewards which would be impossible if they stayed put in their affluent hinterlands. The term emerging markets (EMs) is a collective reference to the stock markets of the developing nations. A question, which overpowers a discerning mind, is why the international investors are looking towards emerging markets for investing their funds instead of established markets like US? Three reasons can be given to answer this question.
First, the average total return of emerging markets has outstripped those of developed markets. Investments total return index computed by the IFC (International Finance Corporation) which measures the total return for each country based on those stock available to foreign investors shows that return on investment in IFC composite of EMs is 61.64 per cent higher than the return on investment in US market over the years.… Read the rest
Syndicated Euro Credits
History of Syndicated Euro Credits
Syndicated Euro Credits are in existence since the late 1960s. The first syndicate was organized by Bankers Trust in an effort to arrange a large credit for Austria. During the early seventies, Euromarkets saw the demand for Euro credits increasing from non-traditional and hitherto untested borrowers. The period after first oil crisis was marked by a boom phase. To cope with the increasing demand for funds, lenders expanded their business without undertaking due credit appraisal of their clients or the countries thus financed. Further, the European banks had short-term deposits while bulk of borrowers required long-term deposits.… Read the rest