International Investment Decisions Based on Economic, Political and Social Factors
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Added on 2020-12-09
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ASSIGNMENT TABLE OF CONTENTS INTRODUCTION 1 Background of Financial market 1 Capital allocation with domestic economy 2 Capital allocation with international markets3 Evaluation of emerging economy of your choice4 Critical aspectsofchallengesthatcountryfacesdue to industrialisation and trade policies.7 CONCLUSION 8 REFERENCES 9 INTRODUCTION International investment decisions have been based on analysing various economic, political and social factors relevant with the country. On basis of nature of claim it is categorised as debt and equity market as debt
International Investment Decisions Based on Economic, Political and Social Factors
Added on 2020-12-09
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ASSIGNMENT
TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 Background of Financial market.................................................................................................1 Capital allocation with domestic economy.................................................................................2 Capital allocation with international markets.............................................................................3 Evaluation of emerging economy of your choice.......................................................................4 Critical evaluation of challenges that country faces due to industrialisation and trade policies.7 CONCLUSION................................................................................................................................8 REFERENCES................................................................................................................................9
INTRODUCTION International investment decisions have been based on analysing various economic, political and social factors relevant with the country. In the present report there will be analysis over the domestics’ market as UK as well as Emerging market as India. Moreover, in respect with such analysis there will be use of various techniques and methods which will be indicative and helps in terms of meeting requirement of international investment decisions. there will be analysis over the economic scenario of UK and India with the purpose of making investment in the nation. Background of Financial market Financial market is considered as broad term which describes about marketplace where various securities are traded such as equities, currencies, derivatives and bonds occur. It is place where individuals are engaged with type of financial transaction where sellers and buyers are involved in purchase and sale of financial products as shares, mutual funds and so on. The prices offinancialmarketmightnotindicatetrueintrinsicvalueofstockbecauseofvarious macroeconomic forces such as taxes. Aggregately, securities prices are heavily reliant on informational transparency for purpose of ensuring efficiency along with appropriate prices set through market. It could be classified with nature of claim, maturity of claim, timing of delivery and organizational structure. On basis of nature of claim it is categorised as debt and equity market as debt market where fixed claims along with debt instruments like bonds or debentures which are purchased and sold among investors. In the similar aspect, equity market where investors directly deal with equity instruments as it is market for purpose of residual claims (Matvos, Seru and Silva, 2018). The maturity through claim it is classified in money and capital market as in money market is with monetary assets along with commercial paper, treasury bills, certificate of deposits etc. which will directly mature in a year which will be traded. This is market for funds of short term as no market exist physically as transactions will be performed with virtual network. The capital market where medium and long term financial assets are traded as it is also categorised in two types such as primary and secondary market. On basis of timing of delivery, it has cash and future market as in cash where transactions along sellers and buyers are directly settled in real time. In future market is one with delivery along with settlement of commodities would be undertaking for future specified date. With context of organizational structure, it is of exchange traded and over the counter market as in exchange is financial market where 1
organization is centralised with procedure in standardised aspect. Further the over the counter market, it is through decentralised business entity which will be having procedures in customised aspect (Fischer and Krauss, 2018). The most important role is of financial market is for mobilising its savings and puts with various productive application. This will help for identifying securities price and presence of frequent interaction among investors which will directly fix securities price with context of demand and supply in market. This will be giving liquidity for tradable assets as it will facilitate exchange as investors could sell securities and transforms assets to cash. Henceforth, it saves money, efforts and times as they will not waste resources for extracting probable sellers and buyers of securities as this will be decreasing cost by giving valuable information related to securities traded in financial market. The financial market might not have presence of physical location such as exchange of asset among parties which could take place over phone and internet as well (Lumsdaine and Potter van Loon, 2018). Capital allocation with domestic economy The function of capital allocation is of asset managers as it is significant facilitator of UK company funding which will contribute to growth for long term productivity. It capability is broad as this will extend for multiple asset classes and structure of funding along with supplies funds over the whole economic cycle. The capital allocation will attain success as it will facilitate potential for holdings of long term and it will allow for involvement of long term with organizations. The asset managers will be holding equity of UK for average of six years as it will be longer than its own clients which will hold investment in its pooled funds. The role of asset managersinengagementandstewardshiphasbeenraisedwithreflectionoflongterm relationship which could facilitate supply of innovative finance. It had shown long term relationship which will facilitate significance of issue of shares (Epstein, 2018). There is observance of lens of equity dominated cycle as in recent year its function as debt managers which are very important with reference to alteration in landscape of capital markets as it will help business entity for maintaining access to new capital and for decreasing cost of capital through switching via bank as it will lend to cheaper financing of bond. Furthermore, the financing channels will be diversified as investment in debt will extend market of public corporate debt with alternative form of debt finance and via varietal of infrastructure projects as it will consider social housing as well (Groh and et.al., 2018). 2
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