Case Study on Industrial and Commercial Bank of China

国际筹资曾经是跨国公司的领域。跨国公司不仅在世界各地销售原材料，或在许多地理区域出售产品，还在世界各地寻找资本，在更便宜的地方筹集资金。投资者对外国公司股票的兴趣也在增加，全球股市的国际化正在以更快的速度发生。然而，证券市场的国际化具有更宽泛的内涵涵盖所有的投资，如养老基金大票的球员组合投资、对冲基金和私人股本基金和它们的同类，本模块的重点是中国工商银行从国际市场股权资本提高了。

 

Abstract 摘要

 

International fund raising used to be the domain of multinational companies. MNCs not only source raw material across the world or sell products at many geographical regions, they also scouting for capital all over the world and raise capital where it is cheaper. Investors’ appetite for foreign company shares have also increased manifold and internationalization of equity market across globe is happening at a faster speed. However, internationalization of equity markets has a broader connotation covering entire gamut of FDI, portfolio investment by big ticket players like pension funds, hedge funds and private equity funds and their ilk, this module focuses on equity capital to have been raised by Industrial and Commercial Bank of China from the international market.

 

Why ICBC felt the need to issue equity in markets outside of China 为什么中国工商银行感到有必要在中国市场股票发行

 

工商银行主要向境外市场发行股票，以加强其公司治理实践、风险管理和内部控制，并加强其财务业务、资产管理、企业银行和投资银行业务以及不良贷款处置能力。例如，工商银行与安联合作开发和提供银行担保产品和服务给他们的客户；至于美国运通，工商银行开始并继续扩大其在银行卡业务、风险管理和客户服务方面的合作，以提高其财务业绩和效率。

 

ICBC mainly issued equities to foreign markets to strengthen their corporate governance practices, risk management and internal controls, and enhance their treasury operations, asset management, corporate banking and investment banking operations as well as their non-performing loan disposal capabilities. For instance ICBC collaborated with Allianz to develop and provide bank assurance products and services to their customers; and as for American Express, ICBC began and continue to expand their cooperation on bankcard business, risk management and customer service to enhance its financial performance and efficiency.

 

Advantages and disadvantages of issuing equity in foreign markets 国外市场股权发行的利与弊

 

Through the move of issuing equity in markets outside china, ICBC is able to raise capital denominated in USD and that to huge amount of capital, which may be difficult to raise from the issuer’s home country. By issuing securities in a new market, it is able to expand the investor base. When ICBC’s share listed in a domestic market, analysts in the domestic market start analysing the company, its product; its market share etc. thus indirectly helps in advertising the company. When a foreign ICBC’s shares are listed in a domestic exchange and the foreign company wants to acquire another domestic company, then share swap can be an option for the foreign company. Despite the prime advantages of issuing equity to foreign markets, several obstacles may be present for instance companies have to pay for the, depository fee, listing fee, audit fee and also companies have to recast their annual report as per the GAAP of the foreign country.#p#分页标题#e#

 

Attraction of the ICBC in Regards To Providing Exchange Listings to Foreign Investors 工商银行对向外国投资者提供外汇上市的吸引力

 

As host countries are getting advantages of FDI and, the investors are also not far behind in terms of their benefits. Numerous factors attracted ICBC to provide exchange listings to foreign investors in a number of ways. ICBC was mainly attracted to exchange listings as it enhances the domestic competitiveness, provides the opportunity of taking significant advantages of international trade technology, contributes towards increasing of sales and profit, extends sales potentials of the existing products, and maintains cost competitiveness in the domestic market set-up. It also enhances possibilities of business expansion, helps in the process of obtaining global market share, reduce the dependency on existing markets, and also stabilize seasonal market fluctuations (Oman, 2000; Rajan, 2005; Rao et al.,1999). The advantages of FDI have been successfully utilized by ICBC in almost every sector.

 

Why investors should be interested in exchange listings 投资者为何对交易所上市感兴趣？

 

There are many benefits to why investors should be interested in exchange listings for instance income returns and price change. The income return represents periodic cash flows generated by the investment. These include dividends paid for ordinary shares and periodic interest paid for bonds. Stocks that pay dividends typically distribute them quarterly. Government bonds pay interest on a semi-annual basis, and debentures pay interest monthly, quarterly, semi-annually, or annually. Investors whose primary objective is to generate periodic income from their investments focus on the income return. Price change is the increase or decrease in price of the asset in relation to the purchase price or the market price in the previous time. An appreciation in the price of the asset is called a capital gain while a price decline is called a capital loss. The prices of assets such as stocks, bonds, and real estate fluctuate over time in response to a variety of factors such as economic news, industry conditions, company`s performance, political conditions, as well as speculation. While the investor expects a capital gain, there is no guarantee that the price will always increase in value. Those investors whose primary investment objective is capital appreciation focus on the price change component of return.

 

Risks for a foreigner associated with investing in ICBC 外商投资工商银行的风险

 

Stocks are volatile investments. The price of a single stock can vary quite widely from day to day, and the factors that cause these price fluctuations are beyond the control of the investor. Buying a widely diversified basket of stocks can be difficult for all but the wealthiest investor. Small investors are better off buying a quality stock mutual fund. Mutual funds pool the investments of many different people in order to buy a diversified set of stocks. This diversified approach helps to reduce the risk inherent in the stock market.#p#分页标题#e#

 

As investors near retirement, the amount of stocks in the portfolio should be reduced. Investors who are close to retirement age can no longer afford to take chances with their money, and that means moving a significant portion of their retirement funds to safer and more stable investments. Buying and selling stocks costs money in the form of brokerage commissions, and many brokerage firms charge account maintenance fees as well. It is important to look for low cost alternatives when buying and selling stocks.