International Trade Finance and Investment Assignment

International Trade Finance and
Investment

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
Background of financial markets ..........................................................................................3
Identification of key players in the market broken down into the following categories........4
Identification and definitions of main financial Instruments broken down into equities,
debts, and other (derivatives).................................................................................................4
Capital allocation within domestic economy ........................................................................5
Capital allocation within international markets .....................................................................6
Evaluation of emerging economy of your choice..................................................................8
Critical evaluating challenges that country faces due to industrialization and trade policies
..............................................................................................................................................12
Conclusion ...........................................................................................................................14
REFERENCES ........................................................................................................................16

INTRODUCTION
Trade finance is associated with the funding of transactions pertaining to both domestic
and international aspects. There are several intermediaries such as banks and other financial
institutions which in turn facilitate both national and international transactions by offering
funds for trade. Effectual strategic and policy framework is the key in both home and
international financial market which in turn contributes in both growth as well as
developmental purposes. In the context of both domestic and global financial system
regulators emphasize on channelizing investors saving into growing market. It can be
summarized from the report that banks, financial institutions and other market instruments
allocates or provides capital to the firm. In both domestic and global market, the main
motives behind capital allocation is to foster economic growth and development. It can be
presented from the evaluation that globalization and trade policies like protectionism imposes
challenges in front of Indian financial system.
Background of financial markets
In the recent times, financial market plays a vital role in enhancing international trade
finance and investment. The five financial markets includes financial institution, individuals,
investment bankers, money and stock market. Financial markets are the one which attract
funds from investors and provide business organizations with the same. This in turn enables
business unit to finance their corporations and thereby achieve goals or objectives. In
financial market, large number of buyers and sellers participate for trading in assets such as
equities, bonds, derivatives etc. International financial market refers to the mechanism which
ensures fund transfer from lender to borrower at global level. Financial institutions and
instruments are considered as the main part of global trade market. Unlike internationally,
under domestic financial market assets like currencies, commodities, equities are bought and
sold within national boundaries. However, as compared to domestic, international market
facilitates smooth functioning of business operations (Melvin and Norrbin, 2017).
Differential interest rates, international diversification, economic growth aspect and exchange
rate fluctuations are the main aspects due to which emphasis placed on the
internationalization of financial transaction.

Identification of key players in the market broken down into the following categories.
A.) Individuals:
these are the saver and purchaser of the securities that are being issued by different
corporates. These individuals provide funds to the corporates by purchasing their shares or
bonds and by making other investments
Investors: They are one who invest or lends money in the market in order to make profit.
Firms or corporates: these re the net borrowers in financial market. They requires funds for
various business activities. In order to fulfil them they offer different types of securities in
market. The funds get by issuing securities are further invested in their capital projects.
B). Brokers: the approves brokers fro the capital market can be operates in stock exchanges.
They performs the job of being an intermediaries between buyers and seller of securities
market.
Investment bankers: they are the agencies or organisation that are being related and licensed
to get worked in capital market regulators. The objectives of these intermediaries is to
smooth-en the process of investing funds in market and to established a link between
investors and users of funds
C).Regulatory bodies are:
Some regulatory bodies and financial institutions are:
Financial institutions and regulatory bodies in financial market help in providing and
lending long term funds to industry. Financial Conduct Authority is a financial regulatory
bodies in UK which are engaged in financing by charging fees to members of the financial
services industry (Bekaert and Hodrick, 2017).
Identification and definitions of main financial Instruments broken down into equities, debts,
and other (derivatives)
Financial instruments can be termed as documents which can be traded in financial
market. In other words, it can be stated that financial instruments imply for monetary contract
which in turn takes place between two parties. Financial instruments mainly include equity,
currency and bonds. It represents an asset of one part and a liability or equity to others.
Financial instruments is a documents that has some monetary value and can be represents as a