International Trade Finance & Investment: Detailed Analysis of UK Financial Market and Capital Allocation in Domestic and International Markets

This study examines the financial market in the UK and evaluates its background, allocation of capital in domestic and international markets, economic aspects of the country, and challenges faced by the nation due to trade and industrialization policies.

MS60056 International
Trade Finance &
Investment

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Detailed examination and evaluation of financial market with reference to the UK and analysis of its
background..............................................................................................................................................3
Examination of the allocation of the capital that is done within the domestic economy........................5
Examination and evaluation of the capital allocation that is done within the international markets.....7
Detailed analysis and evaluation of the economic aspect of the country................................................8
Detailed explanation and evaluation of the challenges that are faced by the nation due to the trade
and industrialisation policies...................................................................................................................8
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................11

INTRODUCTION
Trade and commerce is among the most important and crucial qualities because it allows
different organizations to do corporation worldwide in terms of developing and flourish in a fast-
paced and competitive organisation. Trade finance relates to the money support provided by
financial companies in the trade agreements industry, which is managed through credit
derivatives including credit facilities, debit cards, as well as other means (Mukherjee and et.al,
2021). These numerous financial instruments and alternatives let market participants conduct
business with minimal economic burden. It introduces a third party to the equation, closing the
gap between foreign trades and encompassing processes like based on credit issuance, funding,
and functioning. The financial organizations in the United Kingdom are examined, analyzed and
evaluated in this study that has a lot of benefit for enterprises operating in relation to the change.
Apart from that, this research covers a wide range of themes concerning the current financial
sector in the Uk. In addition, the study looks at resource management methods that are presently
in use in the industry and are used by a variety of organizations to boost productivity and
revenue in their respective industries.
MAIN BODY
Detailed examination and evaluation of financial market with reference to the UK and analysis of
its background
The financial market is critical at about this moment since it has the ability to raise and
improve the country's production, and it may do it in such a constructive light whether it is done
correctly. Here's a walk breakdown about what it implies.
Financial markets- It is a location in which daily transactions of mutual funds, including
all types of relationships, marketable securities, alternative investments, and etc, are undertaken,
and it is also within the reach for most people person because no extra fees are applied,
attempting to make this one of the exchanges which remains in use every year. The financial
market is a location wherein financial products may be bought and sold. Commodities are traded
in this market to create opportunities (Hatzigeorgiou and Lodefalk, 2021). It's also recognized as
the stock exchange or the stock exchange. Simply said, it's a location where investors and

businesspeople assemble to secure funding for a cause. Monetary and capital markets are two
different types of financial markets. Lengthy asset trading occurs in the equity market.
Shareholdings are acquired here, as well as other financial instruments. The capital market is
likewise split into two sectors: direct and indirect.
As a result, it's critical to study and evaluate the best option from the preceding segment's
listing in order to achieve more success and development in a brief span of time. The finance
world, whose is one of the most commonly used industries in both the old and new worlds, as
well as the housing, contracts, and financial products, all of which have immense benefits, are
the most essential tools employed in the monetary system. The currency trading, for example, is
extremely important since it handles with different exchange and money, both of which are
crucial to the country's existence. The buying and selling of commodities, companies,
commodities, and futures, as well as profitability ratios in the secondary market, are all part of a
banking industry (Gnangnon, 2021).
The United Kingdom's financial market: The UK's financial and associated business
services trade balance is predicted to reach $107 billion (£83 billion). The size of exporters in
comparison to imports suggests that the sector is increasingly competing on a worldwide scale.
The majority of financial advisory business is carried with other emerging economies. With 18.6
percent of total sector export earnings, the United States is the leading independent provider to
the UK's trade balance situation. Other EU member nations contributed for 43.8 percent of
overall net manufactured output as a group. The United Kingdom retains a worldwide leadership
position in an array of investment sectors. For instance, it accounts for 18% of worldwide bridge
bank loans. With roughly 250 international banks or subsidiaries in the city, London is a
financial hub. London, the capital of the United Kingdom, is known as a financial centre since it
is headquarters to more than 250 banking institutions and their affiliates, and also possessing a
foreign exchange transaction of more than 37 percent when compared to the rest of the world.
Additionally, the wealth management sector in the Uk contributed £132 billion to the country's
revenue, a significant number given that it represented for 6.9% of total economic activities, with
London accounting for around 49% of that (Yao, Chen and Zhang, 2021).
The United Kingdom is linked to many of the country's greatest and most sophisticated
money system, with London serving as one of the international country's economic 3 'control

centers' (along with New York City and Tokyo). Whereas the United Kingdom has the worlds
largest sixth biggest industry in terms of gross Domestic product, it ranks third on the list of its
proportion in international equities exchanges (behind the U.S. and Japan). The nation is also
home to the nation's biggest foreign currency (forex) industry and the strongest web and
disconnected equity derivatives. The UK financial sector supports the government by providing
generous donations in a short amount of time, which is critical for the nation's lengthy prosperity
and development. In the financial sector, there are a number of enterprises that helps clients
expand while also looking to boost and improve the standard of living by encouraging residents
to engage in the industry in attempt to benefit from the present better returns.
Furthermore, it provides jobs for a significant number of people, leading to reduction of
joblessness by permitting informed youngsters to seek work in the financial world, which
provides a wide selection of opportunities for career socioeconomic development. Additionally,
both of the directly and indirectly industries are quite in regard to the United Kingdom,
permitting it to obtain customer base based on its requirements and providing it a competitive
edge (King, Loncan and Khan, 2021).
Examination of the allocation of the capital that is done within the domestic economy
Economy may be defined as a framework or a form in which all acts linked with economic
aspects take place, indicating how people in a certain location make a living and cover their
everyday costs. While business areas or those who are depending on or linked to using vital
resources for the fulfillment of human requirements, like expenditure, whereby items and
activities are predominantly transferred for financial worth. Business or capitalist marketplaces,
controlled or socialist markets, and differentiated benefit marketplaces are indeed the three types
of economy, but each nation manages its market differently on the basis on its requirements and
aspirations.
Domestic economy: The trade of items & services within a particular market which is well
within a border zone is referred to as the national market. In this regard, the United Kingdom is
in a nice situation, because it performs very well on both domestic and export markets. The real
GDP (GDP) of a country is being used to evaluate its sector, and the Britain has the sixth -
largest strongest economy, estimated at $2.83 trillion, following only the US, China, Japan,
Germany, and India. It has a population of 66 million inhabitants, the majority of whom are

youthful and so contribute to the prosperity of a nation and development via gainful activities.
The mainly four people living in the United Kingdom are England, North Ireland, Wales, and
Scotland, with England producing the majority of GDP and gaining the moniker "core of the
UK." The UK would fight to stay up with competitors if it did not have it (Patra and Rao, 2021)
(Kong and et.al, 2021).
It uses a capitalistic system in which the companies and industry jointly control and
manage all state currency, rendering this one of the most important and crucial parts of the
country's lengthy growth and achievement. The European Union is the UK's most important
customer, representing for 43.5 percent of all exports in a particular period. Despite the fact that
all firms pay into the network, the crude oil, gas, and aviation industries represent a large
percentage of the banking markets, resulting in fast expansion.
Inside that UK's internal market structure, project budget is extremely important. The
technique of spending a country's cash that enhances the performance and quantity of the cash is
known as sharing of resources. Due to the obvious size of the country and the significance of its
operations, capital spending is one of most essential factors, and each of them is explored in
length and also in order below.
Infrastructure facilities: Infrastructure investments have a lot more value because they
can boost market expectations and grow, and if they're not designed correctly, they can destroy a
country's long-term brand value. It also helps to raise life quality by giving citizens a variety of
opportunities to grow in an increasingly competitive environment. The United Kingdom
appreciates this and has maintained a structure that enables enterprises to contribute
meaningfully to the nation's GDP by employing British state institutions. As a consequence, it
assists in connecting the nation to other parts of the globe, enabling for smooth corporate
transactions with little glitches (LE and et.al, 2021).
Small business: Small companies are important for any nation since they cover the gap
between distributors and consumers by providing products and services for individuals and
communities who do not have simple access to various enterprises to meet their aims and needs.
The United Kingdom made major investments in this field since it offers various benefits, such

job opportunities that try to reduce inequality, leading to an improved and extended quality of
life for its residents.
Examination and evaluation of the capital allocation that is done within the international markets
A capital market is simply a system by which people, companies, and governments with
excess wealth transfer that wealth to those in need. This method makes it possible for all who
wish to obtain or investment to do so efficiently. Whenever anyone loans capital to purchase a
car or a house, for example, they are making use of the financial sector. Equity markets perform
the appealing financial duty of diverting money to good ends.
International market- It is a sector in which companies do business far beyond their territorial
boundaries in order to grow and prosper in the industry by increasing the company's valuation.
The United Kingdom employs a number of strategies for sending funds to the United Arab
Emirates, all of which are detailed somewhere else on this site:
Debt repayment- A nation's obligation to return revenue in accordance to the remaining
quantity obtained for different purposes, the most frequent of which is to expend, is known as
debt management. Currency may occur in a variety, such cash, commodities, investment
vehicles, and etc, and the United Kingdom makes timely payments to the United Arab Emirates
to avoid getting into a financial mess that will stymie the country's long-term operations (Yao
and et.al, 2021).
Mergers and acquisitions- Mergers and acquisitions are important because it allows a firm that
isn't performing well during the marketplace to collaborate with something that is, assuming both
parties can benefit. It also aids in the reduction of competitors and, in some cases, gaining a
larger share in the company. The United Kingdom takes full use of this in order to flourish in the
United Arab Emirates market, helping both countries to prosper.
• Creating an organic investing strategy is a long process that requires years to complete. To
amass vast sums of money, business executives must determine whether investment
opportunities are acceptable. Even though shareholders often appoint administrators to pay for
infrastructure decisions, significant shareholders have a responsibility to watch the above
judgments in order to develop long-term efficiency gains on the capital they allocate to
categorized enterprises on favor of consumers and beneficiaries.

Detailed analysis and evaluation of the economic aspect of the country
The United Arab Emirates' economic is primarily built on oil and its linked features
because it is one of the world's top production and export of the commodities. It has a mixed
government economy that really is reliant on competitive oil and natural gas development, which
amounts for around 77 percent of GDP and employs the majority of the population
(approximately 96 million populations). It is the second-largest sector in the Near East, following
Saudi Arabia, with a Gross Domestic Product of $414 billion (AED 1.52 trillion). Furthermore,
the nation has reached and exceeded its aim of additional GDP growth, because it keeps
increasing at a greater pace over time than the previous year. High crude, fruits, nat gas, dried
freshwater animals, and other agriculture products were exported to nations such as Japan, Iran,
Switzerland, the United States, India, and Oman, whereas machineries, foodstuffs, and chemical
items were imported mostly from the United States and India (Elheddad and et.al, 2021).
The UAE is a Middle Eastern country located between the Persian Gulf and the Andaman
Sea. Oman and Saudi Arabia are two countries that are close neighbors. It is strategically placed
on the southern approaches to the Strait, a major crude oil transportation path throughout the
world. The United Arab Emirates is characterized by rolling dunes, sand dunes, and hills in the
southeast. The government is structured as a democracy, with some functions delegated to the
UAE federal government and many others reserved for member countries; the presidency is in
control of a country, whereas the head of state is the nation's leader. The United Arab Emirates
has a large market system that uses a flexible trading mechanism to determine goods prices
(Zhang and et.al, 2021). The United Arab Emirates is a part of the Company of Arab States (Gulf
States) and the Council of Islamic Conference (GCC).
Detailed explanation and evaluation of the challenges that are faced by the nation due to the trade
and industrialisation policies
Industrialization- This is the most important, vital, and risky component for every area
interested in expanding in the industry, since it is a process that assist in the rise of
industrialization through to the implementation of technology strategies, which can be beneficial
of improving the total quantity of economic system. There appear to be many factors that lead to
its development, but the five primary drivers are space, wealth, persons, information, and
connections, which all work together to help a country become industrialized. It originated in

late-eighteenth-century North America and Europe, and subsequently spread across the globe as
the currency value increased (Cuong, Luu and Tuan, 2021).
The United Arab Emirates is a strategically located country with well-connected elements
to the entire world, enabling it to ensure that all activities are focused on achieving the goals set
out from the start. Industrialization may help a nation like the UAE eliminate disparity by
increasing the use of technology developments in the goods and services, which can
subsequently help to increase the quality of living for its citizens. Here on voyage, there's a few
challenges along the way, which are mentioned in passing below.
Unequal income distribution- It is a situation where in the gap between the wealthy and the
poor widens over period, and it is among the most dismal states for a community because
recuperation is slow. The United Arab Emirates is in a similar circumstance, with the
underprivileged becoming impoverished and the wealthy becoming richer day by day, stifling
economic progress. This factor becomes significantly more complicated and difficult since there
is no structure in place to ensure that money is dispersed appropriately.
Emigration- This is a big problem in the UAE, as migrants come to other countries so there are
more job opportunities for everybody, helping them to live better lives than they do today. There
seem to be no defined regulations, norms, standards, or codes of conduct for firms operating
there, finding it challenging for staff to perform in a toxic environment (Bruno, Campos and
Estrin, 2021).
Trade deals are set of laws and rules designed for engaging with other countries in order for
firms to grow significantly by gaining a competitive advantage. The UAE has a variety of laws
in place to guarantee that all is carefully scrutinized and they are all documented here.
• Economic warfare: The United Arab Emirates employs this approach, which attempts to
weaken the political institutions of other states in order to let the UAE flourish and flourish over
time.
• Intellectual Property Theft- Import tariffs are a source for production surveillance since they
help a corporation grow into new nations by supporting the company in responding to new

business settings. Organizations stealing others' projects, ideas, creativity, or technology may be
damaging to a country such as the UAE, posing a serious financial danger (Ji and et.al, 2021).
CONCLUSION
According to the study, global trade lending and investments is one of the most essential
factors since it helps firms to access new consumers and is thus critical in the long run. From the
preceding, it could be deduced that the finance system, including its associated chapter presents
the method, are particularly important in the present market climate, then each of them should be
properly investigated in order to participate to rather than subtract from the company's value.
Apart from that, the preceding indicates that the industries of the United Kingdom and the United
Arab Emirates are in great form; while there are certain causes for concern; they are all still
considerably higher than other countries.

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