International Financial Market
- 2. International Financial Market The international financial market is the worldwide marketplace in which buyers and seller trade financial assets , such as stocks , bonds , currencies , commodities and derivatives , across national borders.
- 3. Motives for the internationalization of financial transaction 1:- Differences in interest rates. 2:- International diversification 3:- Economic growth prospects 4:- Exchange rate fluctuation
- 4. Segments of IFM 1:- Foreign exchange market 2:- International bonds market 3:- International Equity market 4:- International Money market 5:- International credit market
- 5. Foreign Exchange Market 1. Foreign exchange market is the market for the purchase and sale of foreign currencies. 2. It is an important segment of the IFM. 3. Borrowing or investing internationally requires the use of foreign exchange market for conversion of currencies. 4. The foreign exchange market facilitates international trade and international transaction.
- 6. Foreign Exchange Market 1. The foreign exchange market is the world’s largest financial market. 2. The foreign exchange market is an over the counter market. 3. That mean there is no physical location where trader get together to exchange currenScies.
- 7. Different rates used in foreign exchange market • Cross Rate • Spot Rate • Forward Rate • Forward premium • Forward Discount • Bid price • Ask price
- 8. Participants in foreign exchange market include • Importers • Exporters • Portfolio managers • Commercial banks • Brokers • Speculation • Government • Hedger
- 9. International Bond Market It is the segment of international financial market where international bonds are brought and sold.Companies may rise long term funds in foreign currencies through issue of international bonds. Foreign and Euro bonds are the two types of international bonds. s
- 10. Foreign bonds Euro bonds Foreign bonds are underwritten by the underwriters of the country where the are issued. Maturity based on the need of investors of a particular country. Foreign bonds are subjected to government regulations in the country where they are issued Underwritten by internationally. Offered simultaneously to investor in a number of countries. Issued outsides the jurisdiction of any single country. They are not registered a regulatory agency. Make coupon payment annually
- 11. International Money Market Money market is the market for transfer of short-term-funds. In international money market , transaction takes please in a variety of different currencies. The European money market is an important part of the international money market.
- 12. Internatio1nal Credit Market MNCs can obtain short-term funds foreign currencies from the international money markets , and can obtain long term funds in foreign currencies from the international bonds markets. The segment of the international financial market where medium term funds are exchanged between the suppliers and borrower s of such funds is sometimes referred to as international credit market.