Emerging Markets
Definition: Emerging markets are some of the fastest growing economies in the world and represent countries that are experiencing a substantial economic transformation and lots of growth.
Investing in these countries has lots of potential for big returns, but it also carries lots more risk than domestic investing.
Emerging countries are listed below:
1. China 9. Chile 17. Malaysia 25. Taiwan
2. India 10. Colombia 18. Morocco 26. Thailand
3. Mexico 11. Czech Republic 19. Peru 27. Turkey
4. Pakistan 12. Egypt 20. Saudi Arabia 28. Venezuela
5. Brazil 13. Hungary 21. Philippines
6. Russia 14. Indonesia 22. Poland
7. Argentina 15.
Genicon is a manufacturer and distributor of surgical instrumentation which are focused specially on laparoscopic surgery. The company is in growth phase and is driven to meet the needs of contemporary healthcare system through identification of clinical needs and meeting the economic demands of healthcare systems worldwide. To continue with its growth initiatives, the organization needs to find international market to expand its operations. The case pertains to evaluation of four growth opportunities for the organization – namely, Brazil, China, India and Russia. The paper carries of the evaluation with respect to various criteria.
Stocks are easily diversified. Investing in the stock market is not limited in one country, you can actually buy different stocks in different countries which minimize the risk of investing.
Each country in the world has experienced different economic situations. For example, some experienced unemployment, high inflation rates, while others faced bankruptcy, slow economic growth and many others, which are directly linked to their economy. In the following paragraphs, the economic situation of Colombia would be analyzed to get an insight on how this country is doing economically. Colombia is situated in South America and has the third largest population (around 48 million) of all Latin America (Agriculture and Agri-Food Canada, p.2, 2013). Economically, Colombia has a nominal GDP of around $370 billion (USD dollars), according to the World Factbook (2012), making it the 30th economy in the world and among the top ones in Latin America, but its GDP per capita is around $11 000 ranking 110th compared to the world, in part because there are large inequalities among rich and poor. Currently, Colombia is a free market with many natural resources in their disposition, but they are highly dependent on their oil exportations for their economy as they exported to their principal buyer (United States), “332 000 barrels per day in the year 2000” (Encyclopedia of the Nations, 2013). However, their economy is also based on mining, agriculture and manufacturing. Nowadays, Colombia is mainly experiencing problems with, large income inequality and investment security, which could be resolved in part with modifications in the current fiscal policies and a raise in human capital. To better understand the aforementioned main problems, the causes and consequences of each problem would be analyzed and supported by statistics. Finally, some solutions would be proposed in order to resolve, to a certain extent, the problems faced by Colombia...
Globalization is a double-edged sword, smart local companies have used the benefits of globalization to close gaps in technology, capital, and talent with their rivals from the developed world. Local firms act strategically in order to keep the multinational out of the competition, this attempts the local companies to capitalize the local presence & the command over the cultural & economical environment in their home country. In this paper we will try to highlight on the fact that local firms can compete successfully to MNC with close to Kingfisher & Haier as examples.
In the modern time, the competitive business world seems to be more serious than previously. The main aim of business strategy is creating the benefit in trade and also reducing some of its limitations. Furthermore, another strategy that is applied to the modern business world is to link the economic globalization such as in order to become a listed company on the stock market. We can see lots of advantages by listed companies compared to private companies such as financial stability or are more opportunities to do business. It is an absolutely interesting that the top biggest companies in the world, (by top 100 companies) are all listed on the Stock Market, such as Wal-mart stores the biggest companies by 2010 (Fortune global 500, 2010) listed on The New York Stock Exchange (NYSE) and also The London Stock Exchange (FTSE), Toyota Motor Corporation, fifth of ranking by 2010 listed on The Tokyo Stock Exchange, (NIKKEI), also listed on NYSE and FTSE.
The BRICS “has come to symbolize the growing power of the world’s largest emerging e...
International diversification: If creditors invest only in domestic market, the risk of loss is high. However if the same investment is spread across different countries, there is lesser risk. The risk in this case becomes dependent on economic conditions of countries.
...ries such as Spain, Belgium, UK, Japan, and China. Future growth can be obtained through positioning current brands in those emerging markets.
same with an all-domestic portfolio yet lesser volatility. In other words, adding foreign stocks enable Lucy to earn higher return with lower risk. As globalization happens to tighten the links between global markets, it creates various opportunities for businesses as well as chances to invest in foreign stocks. Notwithstanding, light creates shadow, if Lucy is invest in foreign stock, she must also be cautious to the risks of it. The risks of foreign stocks include political risk, market risk and currency risk. These are the elements she have to look into before decide to jump into any foreign investments.
A diverse portfolio is essential for an investor to expose their portfolio to the necessary risk due to the differences in characteristics from one asset to the next; these assets will be within both the domestic and international market. Fisher (2012) states that a “global portfolio should earn a higher return for the same level of risk and take less risk for the same level of return.” Therefore an investor can achieve a reduction in risk through international diversification. Some financial experts give advice to investors to include international assets into their portfolios. Over recent years, experts have begun to look ahead into the market and it has been noted that there is “A continuation of the long-term trend in the decline of the dollar” (Fisher, 2012). This information indicates that the incorporation of international assets withi...
Developing countries have been the fastest growing market in the world in terms of goods and services. Several MNE’s from the emerging markets have entered and successfully running business in North America and Europe. For example: Tata group of India and China’s Haier group.
An emerging market is a market that is a developing market but is not yet deveveloped, thus has few characteristics of a developed market but is missing those such as the level of market efficiency and strict accounting and securities regulations when compared with developed economies. Emerging markets will typically have a financial infrastructure including banks, a stock market and a currency. The economy could be a future developed market or a developed market in the past. The term “emerging market” was first coined in 1981 by Antoine Van Agtmael who was an economist who worked at the world bank.
There is one thing that differentiates the international business with the domestic business where it uses more than one currency in the commercial transaction. For example, if a company from British purchases some goods from a company from US, the international transaction will require for exchanging pounds and U.S. dollars which involve the foreign exchange market. In the foreign exchange market, any country that wish to do business with foreign country, the country need to convert their domestic currency into the foreign currency that they are wish to cooperate with through foreign exchange.
The stock market is an essential part of a free-market economy, such as America’s. This is because it provides companies the capital they need in exchange for giving away small parts of ownership in their company to investors. The stock market works by letting different companies sell stocks to gain capital, meaning they sell shares of their company through an exchange system in order to make more money. Stocks represent a small amount of ownership in a company. The more stocks a person owns, the more ownership they have of that company. Stocks also represent shares in a company, which are equal parts in which the company’s capital is divided, entitling a shareholder to a portion of the company’s profits. Lastly, all of the buying and selling of stocks happens at an exchange. An exchange is a system or market in which stocks can be bought and sold within or between countries. All of these aspects together create the stock market.
Country-specific risks are known as macro risks; these political risks impact the MNE at the project or corporate level but originate at the country level. The two main types of risks in this category are transfer risk and cultural and institutional risks. Transfer risk concerns mainly the problem of blocked funds, but also peripherally sovereign credit risk. Whereas, cultural and institutional risks spring from ownership structure, human resource norms, religious heritage, nepotism and corruption, intellectual property rights, and protectionism . An example of country-specific risks was witnessed recently when Nepal was under fire for its violation of labour laws. Nike was largely affected by this and they had to justify and prove that they were complying with all labour laws. Consumers specially in North America were worried about buying products that were made in a country with poor labour laws and were thinking of boycotting Nike. Furthermore, the financing issue related to country-specific risks is blocked funds. The financing issue associated with blocked funds is “when a government runs short of foreign exchange and cannot obtain additional funds through borrowing or attracting new foreign investment, it usually limits transfers of foreign exchange out of that country.” Management can consider blocked funds in their capital budgeting analysis. Temporary blockage of funds normally reduces the expected net present value and internal rate of return on a proposed