...Introduction The stock market is the most active financial market in the U.S., which includes more than 5000 securities companies, trade associations, the stock exchange, investment banks and other institutions. The stock market can be divided into two level. The primary market including corporation, government agency, and investment bank sells securities to initial buyers, in other words called securities issue. The secondary market resell securities which have been previously issued in primary market. Secondary market can be organized in two ways. One ways is to organize exchanges, “where buyers and sellers of securities (or their agents or brokers) meet in one central location to conduct trades.”(Mishkin Eakins) The other way is to have an over-the-counter (OTC) market. The participants in OTC market trade through telecommunications networks such as telephone, email, and electronic system without a regular location. One of the importance network is the National Association of Securities Dealers Automated Quotation System (NASDAQ). Beyond those, Electronic Communications Networks (ECNs) have been challenging both the organized exchanges and NASDAQ for years. ECNs is a large quantity of stock trading electronic network that connect brokerages and traders so that they can trade directly without intermediaries. There are tens of billions of dollars of stock trading in the market every day. The management of the stock market of U.S. government is to regulate the issue and trading...
Words: 2297 - Pages: 10
...the most fragile. In the last few months, its stock market has seen an incredible rise in prices. Those prices have now been crashing down; causing broader concern about the impact a Chinese economic meltdown could have on the rest of the world. After the China stock rout, Indonesian and Malaysian currencies are back at Asian crisis levels. This isn't just China's problem. Over the past few years, Major American companies depend on the health of China's economy, and its stock market, for their revenues. Apple points to its growth in China as a bright point; with $13.2 billion in sales there, China is the company's second-biggest market after the U.S. with revenues jumping 112% in the past year. China and its taste for mass luxury is why the gold iPhone exists. Chinese stocks lost about $3.9 trillion in value. It looked like the market could be on the verge of a total collapse. Due to the wild swings, more than half of listed Chinese companies have taken the drastic step of suspending their own shares. That's right: half the companies on the Chinese stock market aren't even trading, and stocks are still crashing. The Chinese government is working furiously to avert catastrophe in its stock market. They're doing this the good, old-fashioned way — by pouring in billions of dollars in cash. China is using a state-owned company — China Securities Finance Corp. — to lend money to people that can, theoretically, be used to buy stocks. This is meant to buy up shares to keep prices...
Words: 582 - Pages: 3
...asset price of Chinese capital market. Some countries with low interest rate will attract many investors to borrow money, and those investors will use this amount of capital to transfer into other curries so that they can invest in that country. With more capital flowing into the capital stock market, the index measured the performance of stocks will have some changes. Somehow, the changes in the exchange rate should be able to predict the changes in Shenzhen Component Index. Using the data from some reliable resources, we would figure out the relationships between them. Introduction: Exchange rate is one of the most common rates we concern about in our daily economic activities. Knowing the effect of this rate on Shenzhen...
Words: 1444 - Pages: 6
...Economic Climate-China’s Perspective * Chinese Stocks Have Further To Fall * Negative wealth effect on Chinese households * Financing Channels Now Closed * Property Market Stability At Risk * Renewed stability in the property market in the past * The weakening stock market reflects poor incomes and housing affordability * Banks become increasingly risk averse * Recession And/ Or Financial Crisis Risks Growing * Economic growth structure too reliable on debt * Excess Capacity of Manufacturing industry * Chinese demand is underperforming the bullish expectations Details With the Chinese equity bubble finally bursting in line with our expectations and likely to continue declining much further from still-extreme valuations, we are assessing the potential for either a recession or a financial crisis, which we believe are growing risks. * Chinese Stocks Have Further To Fall * Negative wealth effect on Chinese households * Financing Channels Now Closed * Property Market Recovery At Risk * Renewed stability in the property market in the past * The weakening stock market reflects poor incomes and housing affordability * Banks become increasingly risk averse Given that the property market and the upstream industries supplying it (cement, metal etc) accounts for almost 30% of GDP, and property and land prices are a major source of loan collateral, the housing market remains a crucial factor in China's economy...
Words: 542 - Pages: 3
...The relationship between stock prices and exchange rates in China Mengyuan Chen Illinois Wesleyan University Dec 10, 2012 Abstract This paper uses the data of RMB exchange rates and stock market prices in China from 1994 to 2011 to estimate the relationship between stock prices and exchange rates. There are two major theories concerning the relationship. According to the portfolio balance effect, these two variables should be negatively related; in addition, according to the international trading effect theory, these two variables should be positively related. The linear regression model is adopted to observe the various relationships between stock and foreign exchange markets. The results confirmed my hypothesis, which indicates that the international trading effect is more dominant, thus the net effect is a positive causal relationship from exchange rates to stock prices. I. Introduction Within the emerging Chinese market, China now has more open policies and advanced financial market instruments to promote globalization. For example, China started to allow the RMB to float within a larger daily range in 2005 and brought derivative options into the stock market. These significant steps all suggest that China is beginning to face a new economic condition. For instance, the challenging policy making of RMB exchange rate is one. Exchange rates and stock prices are both key indicators of the economy and financial markets. So the relationship between those two becomes an...
Words: 2999 - Pages: 12
...Political Connections on Stock Price Synchronicity: Evidence from China By Seven Cheng Lin 1130600072 Accounting Chris Chaofan Chen 1130600006 Accounting Submitted to Jessica Tian Beijing Normal University-Hong Kong Baptist University United International College Dec 2014 Content 1. Introduction…………………………………………………………………………1 1.1 An Overview of stock price synchronicity…………………………………….1 1.2 Political Connection in China………….…..……...……………………….……….2 1.3 Study Objective………….…………………………………………..…………………3 2. Literature Review…………………….……………………………………………………...4 2.1 Literature Related to the Stock Price Synchronicity………………..…………………4 2.2 Literature Related to Political Connections …………………..……………..……….5 3. Statement of hypotheses…………………………………………………………….……….6 3.1 Political Connections and its Impact on Stock Price Synchronicity …………..……...6 3.2 Moderate Effects of Institutional Environment in Different Regions……………..…..7 4. Methodology………………………………………………………………………..8 4.1 Dependent Variable………….….………………………………….…………………..8 4.2 IndependentVariable……....…………….………………………..…………………9 4.3 ControlVariables………………….………………………………..………………..9 4.4 Framework………………...…………………………………………….……………10 5. Schedule………………………...…………………………………………….……………10 6. Reference………...………...…………………………………………….…………….11 1. Introduction 1.1 An Overview of Stock Price Synchronicity Since the successive establishments of the ShenZhen Stock Exchange and the ShangHai Stock Exchange in 1990, the Chinese stock market obtained the great improvement...
Words: 3651 - Pages: 15
...2. Why did FedEx’s stock price outstrip UPS’s during the initiation of talks over liberalized air cargo routes between the U.S. and China? Assuming a perfectly efficient stock market, how might one interpret a 14% increase in FedEx’s market value of equity? Since the talks of a transportation agreement between China and the Us began in mid Feb both UPS and FedEx stock began a steady incline. Fedex had the largest share of the Chinese market with 11 weekly flights, almost twice UPS with 6 weekly flights, and served 220 Chinese cities. Their volumes in China had grown more than 50% bt 2003 and 2004. FedEx had the reputation of being innovative, and an operational leader, whereas UPS was know as the industry follower. UPS had problems with unionization, and FedEx did not. FedEx set a goal of producing “superior financial returns” meaning increasing earnings and maximizing value to shareholders. I also believe the lower price to earnings ratio of FedEx, 22.93 vs 29.01 and a higher EPS made FedEx a much more attractive stock to investors. With FedEx’s already strong position in China, expected to be the worlds largest economy in 2009, it would potentially be much easier for them to continue to capture the growing Chinese market that UPS, with much less of a presence. I believe the 14% increase in FedEx vs 3% increase in UPS is largely due to the position FedEx had in the Chinese market with 11 weekly flights almost twice UPS with 6 only weekly flights. Also FedEx’s...
Words: 426 - Pages: 2
...problem: Google’s initiative to enter the Chinese market has been the topic of many arguments from different parties, from shareholders to Human Rights organizations and the actual Chinese government. Google’s image and reputation in the media, investors and users’ minds has been deeply harmed in 2006 at the launch of Google.cn. Google core mission is to make the world’s information available to the greatest number of people possible. And offer this service freely & easily. But Google also strongly stands behind the importance of user privacy. Although their refusal to provide the mandated user information to the U.S. Justice Department created a contradiction to what consumers now perceived of Google after its entry in the Chinese market it did not protect the company from suffering a staggering fall in their stock prices (-7.5% on January 11, 2005). This situation and the unprecedented disappointing fourth quarter final numbers had numerous financial specialists thinking about the possibility that Google had at last lost its exponential growth and momentum since its conception in 1998. Moreover, investors were pondering whether their mantra of “Don’t Be Evil” would have the ability to uphold their beliefs and company values while developing internationally or not. The company’s executives and founders also have to face the issue of the services that they provide in China (Gmail, blogging services, etc.) as the Chinese government requests them to offer and as Google...
Words: 575 - Pages: 3
...14:11 BST After the Chinese stock market suffered its biggest one day loss since 2007, plummeting 8.5%, the country's media have dubbed today "Black Monday". The ripple effect has been felt across the globe, with indices nosediving one after the other. The FTSE 100 fell below the 6,000 mark for the first time since 2013, and Japan's Nikkei, the German DAX and France's CAC all followed suit in recording heavy losses. The Shanghai Composite lost gains made in 2015, plunging 8.5%. Why is this happening? Slowing growth in the world's second largest economy has been spooking investors since the beginning of the year, which has contributed to the loss. China is targeting growth of 7% in 2015, down from 7.4% in 2014, as the country attempts to move from an export-led economy to one more focused on consumer spending. However, there are now worries it will fail to hit forecasts and economic data come in weaker. Earlier in 2015, investors signalled their concern about the slowdown by embarking on a selling frenzy that wiped out more than 30% – some $3tn (£1.9tn, €2.7tn) – of China's equity market value in one month. The Chinese government has responded by injecting billions into blue chip stocks, permitting its state pension fund to invest in domestic shares for the first time and by devaluing its currency in a bid to boost exports. But none of these actions appears to have had the desired effect. Instead, the reaction from investors has been to sell off stocks, causing bourses around...
Words: 930 - Pages: 4
...Rules to Toughen Listing Standards for Reverse Merger Companies) Beginning in 2007 and continuing into the present, more than 150 Chinese companies have obtained listings on both U.S. and foreign stock exchanges via reverse mergers (RTOs). 2. The structure of RTO (Coming to America) • Matchmakers in China and the U.S. connect businesses in China with American ailing or shell companies and propose a merger • The under writer hires an auditor to prepare the financial statements required for the merger to be approved by the SEC • Once the merger is approved, the company is renamed. Often the names contain the word "China" or "Sino". • The company builds up credibility and moves up to a well-known exchange such as Nasdaq • The company works with an investment bank to sell shares. Analysts catch on, investors start paying attention, and funds buy the stock, all moving the price. 3. Why a reverse merger rather than an IPO? • Reduced time and costs to secure public listing Take US stock exchange as example: A firm can avoid having to go through the lengthy SEC review process. This can save the firm anywhere from 2-12 months • Less legal groundwork needed, and therefore less legal expense A RM typically costs $200,000 – 300,000 less than an IPO, and this does not include indirect IPO costs such as underpricing. • No need to time the market since a limited...
Words: 1586 - Pages: 7
...same amount in the | | | |future due to its potential earning capacity. | | |Efficient market |An investment theory that states it is |Www.Investopedia.com | | |impossible to “beat the market” because stock | | | |market efficiency causes existing share prices | | | |to always incorporate and reflect all relevant | | | |information. | | |Primary versus secondary market |The difference between the primary capital |Www.Investopedia.com | | |market and the secondary capital market is that | | | |in the primary market, investors buy securities | | |...
Words: 1070 - Pages: 5
...capital markets have been in an expansionary mode for years. Both the bond and the stock markets rank 3rd in the world (FAQ: China’s Bond Market), right behind the U.S and Japan. Despite all these achievement, China has yet to exploit its full potential as its financial markets have still not been fully opened yet. In our report, we will make an analysis of what will happen if China opens their capital markets. First, we will introduce the Chinese capital markets, second discuss the current state of the stock and bond markets, then give a description of what should be done before opening the markets and finally conclude our analysis with what will happen after markets open. China’s capital markets do not have a long history. After the civil war in 1949, mainland China had a stock exchange market called the “Tianjin” Stock exchange market. However, the market was shut down in 1952 because of political acts that targeted capital markets and capitalists. After that date, the capital market remained close until the “opening up” policy set in. At that point, the stock markets reopen in the early 90s (Shanghai Stock Exchange and Shenzhen Stock exchange). China’s capital markets are comprised of the stock and bond markets, securities investment funds, and futures. The stock market can be divided in 3 categories, the A-shares, B-shares, and the H-shares. The A-shares are the most important stock shares in China’s mainland. It is a RMB denominated shares that is issued by Chinese companies...
Words: 2384 - Pages: 10
...Stocks Selecting Our team have a discussion about the stock selecting and get the conclusion to get five stocks stands for different industries and the stock should have a certain amount of trading volume this year, so that their stock prices’ waving can reflect the common situation of their own industry and our gap trading can have opportunities to show its power. Finally these stocks are selected as our trading gap trading objects: 0005.hk(HSBC HOLDINGS);00031.hk(CHINA AEROSPACE);0700.HK(TENCENT);00027.HK(GALAXY ENT) and 0040.HK(GOLD PEAK); Here are some introduction about them and some simple analyses will be give along with their stock price this year (from June). 0005.hk(HSBC HOLDINGS): Introduction HSBC Holdings plc is a British multinational banking and FINANCIAL services company headquartered in London, United Kingdom. It is the world's fourth largest bank. It was founded in London in 1991 by the Hongkong and Shanghai Banking Corporation to act as a new group holding company. The origins of the bank lie in Hong Kong and Shanghai, where branches were first opened in 1865. The HSBC name is derived from the initials of the Hongkong and Shanghai Banking Corporation. As such, the company refers to both the United Kingdom and Hong Kong as its "home MARKETS". HSBC has around 6,600 offices in 80 countries and territories across Africa, Asia, Europe, North America and South America, and around 60 million customers. As of 31 December 2013, it had total assets of $2.671...
Words: 1578 - Pages: 7
...Trends and Calendar effects in Malaysia Stock Market Mahmoud Khalid Almsafir Nur Hanis Hazwani Binti Husni Ayman Abdalmajeed Ahmad Al-smadi Graduate Business School, College Of Graduate Studies, Universiti Tenaga Nasional, Jalan IKRAM-UNITEN, 43000 Kajang, Selangor, Malaysia. mahmoud@uniten.edu.my, hanis.husni@gmail.com, smadi370@yahoo.com ABSTRACT Investing can help a person's wealth to generate more, and investing in stock is proven as one of the most profitable forms of available investment. The benefits gained in stock broking are immediate Buy/Sell which investor can sell part of their investment any time and at low transaction cost. However, investing in stock will require investor to observe the market, as market can be a volatile place and investor need to acquire knowledge of what they actually are doing. This study will discuss the price trends over the year, and how it will get affected by the seasonality in Malaysia, which also known as the calendar effects. The factor to be investigated in this study is the price on holiday’s season, the January effect or any other monthly seasonality. The daily price of KPJ Healthcare Berhad for the year 2011 is the sample was chosen in this study. Further this study, data used is derived from the weak-form efficient markets hypothesis, which is the price history and case study. Regression method is used in this study in order to help achieving the findings. This should be a continuous study, and adding on more other...
Words: 4125 - Pages: 17
...Get the inside scoop on investment banking careers in the Asia Pacific region! Read this extended excerpt of the all-new Vault Career Guide to Investment Banking, Asia Pacific Edition and get the inside story on investment banking careers, including: • An inside look at corporate finance, sales & trading, research and other major functions at investment banks. • An oveview of equity and debt markets in the region • A discussion of industry trends and corporate culture in Asia Pacific • Days in the life of investment bankers in Asia Pacific This PDF is an excerpted version of the full 198-page guide To get the complete guide: • Purchase your own print or e-Book version of the guide. Go to www.Vault.com/Asia. • More than 900 universities and MBA programs worldwide subscribe to the Vault Online Library, providing more than 4.5 million students worldwide with access to Vault's guides and career information. Contact your career center today to ask about access to the Vault Online Career Library. ABOUT VAULT Founded in 1996, Vault is the leading global media company focused on careers. With offices in North America, Europe, India and Asia, Vault provides graduates and young professionals worldwide with insider information on careers and education through its award-winning web sites and career guides. CAR E E RS VAU LT CA R E E R G U I D E TO INVESTMENT BAN KING A S I A P A C I F I C E D I T I O N INVESTMENT BANKING JUNG B. LEE, TOM LOTT and the staff of vault ...
Words: 10918 - Pages: 44
