According to Wall Street Journal demonstrated that it is not only the West country but also developing country both pushed China revaluation of its currency. A G-20 central banker pursued "they should seek consensus rather than confrontation." They expected China will allow its currency to rising more rapidly. Because they believed that revaluation of the Yuan will help them to against the effect of their inflation, and to increase their import.
Since 2007, China shifts its exchange rate policies to managed floating exchange rate regime, made a more flexible exchange rate environment. Dollar became more and more weakness to against Yuan from $8 to $6 until now. Furthermore, there are many impacts exist in the domestic economic environment. Export is the significant part affected by Chinese exchange rate rising. There are 30 per cent of GDP from exports. It can be shown how important export is in China. Processing trade has occupied 50 per cent of export in China. Lower labor, lower price are the main characters for processing trade to compete with other competitors. Revaluation of Yuan will improve them products quality, and hence their competitive capability in the market. It also bought a huge increase pressure on China's export business in the short time. The processing trade will lose their main competitive factor, low price.
On the other hand, great deals of foreign refugee capital will entry into the estate market and stock market in China according to Chinese currency raising. It also become threaten for the Chinese economic market risk management.
China is a one of large export countries around the world. However, their export tax policy still limit parts of resources export leaving from China. It will protect the demand of domestic and the competitive price between home and foreign countries.
In a conclusion, Chinese government has to face a serious of problems made them hardly pick up the currency raising. The export company lack of the core preponderant competitive ability. Chinese financial market does not maturate opening to foreign investors. They have not ability to accept too much capital into the market. And the issue of inflation in China waits for solving to encourage people depositing their funds into the bank. Is it exist a way to reduce the pressure from other European countries or US raising currency, while improves domestic economic growth?
Sunday 27 February 2011
Sunday 20 February 2011
Raising finace for multinaional enterprises
Debt and equity are the two main sources of capital available to businesses. The form of debt financing is usually granted with expected repayment, and plus interest. Some companies and corporations use debt raising their finance through national market, foreign debt market and Euro-securities market. Advantage of debt financing is presented by low cost, low risk and beneficial reducing taxable profit. However, there are still exist some disadvantages of debt finance. Borrowing has to repay the capital and also include interest. Furthermore, if a company carried too much debt, it will make company unattractive to investors and reduce their ability to raise additional capital in the future.
The form of equity financing is that money obtained from investors in exchange for owned share in the business. Contrast with debt financing, equity financing is no obligation to pay dividends, and not be paid the capital. Some companies and corporations will obtained and increasing their capital from the main market of the London Stock Market, Alternative Investment Market and venture capital.
Debt and equity are both useful increasing the capital of companies. If company obtained too many funds from investors, there are issues existed that company could loose their management capability. Their exclusive have to make a balance strategy for borrowing and obtaining from investors.
In order to increasing their capital, most of multinational company trends to global expansion. Joint ventue is the one of style for company and corporations expanding their business, such as Sony Ericsson Mobile Communications International AB. It was built a joint 50% shares respectively by the Japanese consumer electronics company Sony Corporation and Swedish telecommunications company Ericsson.
Sony and Ericsson aimed increasing their GSM market share and promoting their profitable situation respectively, so they chose joint together. However, the result of their alliance is not like their expected. According Sony Ericsson annual report 2010, it demonstrated their operation turnover declined significantly, and EPS continued decrease on four years.
Creasing capital for multinational companies is the most things which have to be concerned that risks which include environment risk, exchange rate risk, political risk and so on. So multinational firms have to focus on their long term strategy to create wealth growing.
The form of equity financing is that money obtained from investors in exchange for owned share in the business. Contrast with debt financing, equity financing is no obligation to pay dividends, and not be paid the capital. Some companies and corporations will obtained and increasing their capital from the main market of the London Stock Market, Alternative Investment Market and venture capital.
Debt and equity are both useful increasing the capital of companies. If company obtained too many funds from investors, there are issues existed that company could loose their management capability. Their exclusive have to make a balance strategy for borrowing and obtaining from investors.
In order to increasing their capital, most of multinational company trends to global expansion. Joint ventue is the one of style for company and corporations expanding their business, such as Sony Ericsson Mobile Communications International AB. It was built a joint 50% shares respectively by the Japanese consumer electronics company Sony Corporation and Swedish telecommunications company Ericsson.
Sony and Ericsson aimed increasing their GSM market share and promoting their profitable situation respectively, so they chose joint together. However, the result of their alliance is not like their expected. According Sony Ericsson annual report 2010, it demonstrated their operation turnover declined significantly, and EPS continued decrease on four years.
Creasing capital for multinational companies is the most things which have to be concerned that risks which include environment risk, exchange rate risk, political risk and so on. So multinational firms have to focus on their long term strategy to create wealth growing.
Sunday 13 February 2011
Who is the winner?
Nokia is the biggest cell phone producer around the world. Their smartphones which run the in-house Symbian OS made the top-selling in 2010, but Google's Android software has posted increasingly sharp gains recently. Nokia which was regarded outdated, has lost market share in the rapidly growing smart phone sector to complete with Google's Android and Apple's operating system. In order to catch up in the fiercely competitive smartphone market, Nokia CEO Stephen Elop announced a plan that alliance with Microsoft and running the Windows Phone OS instead of the in-house Symbian OS on this Friday. It clearly demonstrated that there are three main competitors in the global cell phone market between Microsoft-Nokia, Google's Android and Apple iPhone OS.
Mr. Elop who came Nokia last year from Microsoft made the deal aimed to revamp the company increasing their market share of smart phone. However, it made Nokia shares decreased sharply from $11.27 on 7th Feb. to $9.59 on 11th Feb. And Microsoft shares took off $27.70 on 7th Feb. to $27.63 in this weekend. Why will cause this declined under this decision made?
Some analysts thought Nokia accepted the software from Microsoft while intends to use their Bing research engine across its cell phone. It is really grand for Microsoft as its challenge Google as the world's largest search engine. Furthermore, this bid is a possible main breakthrough for Microsoft which should be able to get 30 million from smartphones sold by Nokia each quarter.
Nokia cost $4 billion a year more than twice Apple's R&D budget. About four-fifths of Nokia's 18,000 to 19,000 R&D employees are in software. However, according to Elop announced shift toWindows, hundreds of employees walked out in Tampere where about half the 3,000 workers are Symbian developers. Nokia cut a huge its R&D spending through bid with Microsoft, and earning more than billion dallors from Windows.
Nokia saved their spending to create more benefits for company, and gained huge benefits from this deal. However, Nokia had to face the pressure of their debt issue and the drastic competition. Is it a truth winner in this bid events with Microsoft?
Mr. Elop who came Nokia last year from Microsoft made the deal aimed to revamp the company increasing their market share of smart phone. However, it made Nokia shares decreased sharply from $11.27 on 7th Feb. to $9.59 on 11th Feb. And Microsoft shares took off $27.70 on 7th Feb. to $27.63 in this weekend. Why will cause this declined under this decision made?
Some analysts thought Nokia accepted the software from Microsoft while intends to use their Bing research engine across its cell phone. It is really grand for Microsoft as its challenge Google as the world's largest search engine. Furthermore, this bid is a possible main breakthrough for Microsoft which should be able to get 30 million from smartphones sold by Nokia each quarter.
Nokia cost $4 billion a year more than twice Apple's R&D budget. About four-fifths of Nokia's 18,000 to 19,000 R&D employees are in software. However, according to Elop announced shift toWindows, hundreds of employees walked out in Tampere where about half the 3,000 workers are Symbian developers. Nokia cut a huge its R&D spending through bid with Microsoft, and earning more than billion dallors from Windows.
Nokia saved their spending to create more benefits for company, and gained huge benefits from this deal. However, Nokia had to face the pressure of their debt issue and the drastic competition. Is it a truth winner in this bid events with Microsoft?
Sunday 6 February 2011
After the financial crisis: AIG and U.S. aid
U.S. government saved American International Group Inc. (AIG) from brink of collapse in 2008. There are $120 billion of taxpayer support and $49 billion from the Treasury's Troubled Asset Relief Program received by AIG. After the financial crisis, AIG made a plan that repaid U.S. taxpayers in full and $49 billion preferred shares converted by the Treasury Department into common shares. Those common shares could sell off to private investors which move would reduce the government ownership in the AIG. It clearly showed in AIG 2009 Annual Report that "Our company- wide strategy is focused on repaying taxpayers, achieving growth, and balancing risks."
According to the depth affected by financial crisis, AIG had to face worse remaining issue, debt, than before. AIG expected to raise more than $40 billion and sold their major assets to repay federal funds and the New York Fed, the largest creditor of AIG. But they lack of capability to repay the Treasury, due to their cash limited. Graci, an analyst at Chapdelaine Credit Partners, deduced the government has no choice. The government would preferred to sell their interest to the private investors.
However, the CEO of AIG, Robert Benmosche was diagnosed with cancer on October, 2010. It took more concerned by investors about AIG broad. Although he said the doctors found he had an "atypical positive response" to the drugs. And his condition and test results showed "while.. matters of cancer circumstances can change". He tried to avoid mention about his illness specific situations to prove his health well. He claimed that he doesn't want his health to get in the way, but he is well to lead the company out of the government's hands.
AIG faced huge pressure for repaying and the move of preferred shares to common shares hold by the Treasury Department. Their shareholder also had to take a risk from their volatile stock price and latency change on AIG board.
According to the depth affected by financial crisis, AIG had to face worse remaining issue, debt, than before. AIG expected to raise more than $40 billion and sold their major assets to repay federal funds and the New York Fed, the largest creditor of AIG. But they lack of capability to repay the Treasury, due to their cash limited. Graci, an analyst at Chapdelaine Credit Partners, deduced the government has no choice. The government would preferred to sell their interest to the private investors.
However, the CEO of AIG, Robert Benmosche was diagnosed with cancer on October, 2010. It took more concerned by investors about AIG broad. Although he said the doctors found he had an "atypical positive response" to the drugs. And his condition and test results showed "while.. matters of cancer circumstances can change". He tried to avoid mention about his illness specific situations to prove his health well. He claimed that he doesn't want his health to get in the way, but he is well to lead the company out of the government's hands.
AIG faced huge pressure for repaying and the move of preferred shares to common shares hold by the Treasury Department. Their shareholder also had to take a risk from their volatile stock price and latency change on AIG board.
Subscribe to:
Posts (Atom)