Global Capital Market Essay

This essay examines ICBC's decision to issue equity in markets outside China. It analyzes the advantages, such as increased capital, improved corporate governance, and global recognition, and disadvantages, including foreign exchange risk and regulatory differences. The essay also explores the attractions of ICBC for foreign investors, highlighting its position as China's largest bank and the potential for high returns in a booming economy. Finally, it summarizes the risks associated with investing in ICBC for foreigners, emphasizing the importance of understanding the regulatory environment and potential foreign exchange fluctuations.

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“GLOBAL CAPITAL MARKET”
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1. Examine why ICBC felt the need to issue equity in markets outside of China.
Describe the advantages and disadvantages of such a move.
IPO shares are listed by ICBC in both the Shanghai stock exchange as well as the Hong Kong
stock exchange. It is very necessary to list those shares on the Hong Kong exchange for the
reason of strict reporting along with governance standards. Thereby, this message should be
sent to those potential investors. Like the other companies, ICBC is thus hoping that this
system will raise cash and also improves the corporate governance along with transparency.
Thus, it brings the global recognition for the company.
The credit listing is not tending to focus in case of checking of those investors who are
interested to get the suitable environmental permission from the relevant authorities. In that
case the investment countries would not like to work with the operation of ICBC (Emtairah,
Hansson, & Guo, 2005).
2. Determine the attraction of the ICBC in regards to providing exchange listings to
foreign investors. Provide examples of why investors would be interested.
The equity listing brings a great success for ICBC as one of the reasons is the listing is
oversubscribed and the bank can raise its issue price, thereby return. Foreign investors are
more attracted towards the listing as it is a start-up of China’s booming economy. Also, being
the largest banks of China, ICBC has provided some attractive options as well (Hill, 2011).
3. Summarize the risks for a foreigner associated with investing in ICBC. Provide
examples of possible risks.
It can be suggested to the investors that they can invest in ICBC so as to deal with foreign
exchange risk as well as in turn of foreign investments. There should be presence of strict
transparency in Hong Kong exchange market in case of listing IPO. ICBC has made the effort
for reassuring its investors that there are the operations present in the above board. In this
scenario, the investors may assume a little level of risk as they are investing in the foreign
company belonging to a country which is governed where the laws and regulations are
different by all means. Although, it is not always very risk to be considered about the nature of
country it is, as the investments only on global market scenario (ICBC, 2017).
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WORKS CITED
Emtairah, T., Hansson, L., & Guo, H. (2005). Environmental challenges and opportunities for
banks in china: The case of industrial and commercial bank of china. Greener
Management International, 85-95.
Hill, M. (2011). International Business. New York: Tata McGraw Hill.
ICBC. (2017). Industrial and Commercial Bank of China 2016 Business Review. Retrieved from
http://www.icbc-ltd.com/: http://www.icbc-ltd.com/ICBCLtd/%E5%85%B3%E4%BA
%8E%E6%88%91%E8%A1%8C/%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB
%8B/%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B2009.htm
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