International Financial Market
Beijing January 12, 2000 --- The performance of China Unicom on the US stock market will likely be a litmus test for other Chinese Internet and telecom companies who seek to go public abroad. China’s second largest telecom operator Unicom
achieved more than a 10 percent surge in its New York and Hong Kong trading debuts. Chinese companies have made a lot of efforts to go public in US stock markets, ranging from traditional industry giants to the Internet start-ups. Netease.com, a China-based Internet technology company, announced Friday that it has commenced its initial public offering (IPO0 of American Depository Shares (ADS) at New York’s NASDAQ stock market. The number of Chinese Internet users quadrupled last year, fueling frenzy among foreign investors over the world’s largest potential Internet market.
After China Unicom’s successful listing, the fixed-line operator China Telecom also
plans to go public in the United States.
However, Internet start-ups yearn for listing on the NASDAQ even though the market has suffered setbacks since this March. China’s first Internet player Sohu.com is due to be listed on the NASDAQ today, becoming the fourth Chinese Internet portal the US stock market after China.com, Sina.com and Netease.com.
Successful listing also partly relies on the capabilities of its underwriters. Given the hot pursuit for NASDAQ listing, China’s Internet players should fin other listing destinations since requirements and listing costs have surged on the NASDAQ.
Syndicated Eurocurrency Loans
Although the Eurocurrency market concentrates on large-volume transactions, at times no single Eurobank may be willing to provide the amount needed by a particular corporation or government agency. In this case, a syndicate of Eurobanks may be organized. Each bank within the syndicate participates in the lending. A lead bank is responsible for negotiating terms with the borrower. Then the lead bank organizes a group of banks to underwrite the loans. The syndicate of banks is usually formed in about 6 weeks, or less if the borrower is well known because the credit evaluation can then be conducted more quickly. Borrowers that receive a syndicated loan incur various fees besides the interest on the loan. Front-end management fees are paid to cover the costs of organizing the syndicate and underwriting the loan. In addition, a commitment fee of about 0.25 percent or 0.50 percent is charged annually on the unused portion of the available credit extended by the syndicate.
Syndicated loans can be denominated in a variety of currencies. The interest rate depends on the currency denominating the loan, the maturity of the loan, and the
creditworthiness of the borrower. Interest rates on syndicated loans are commonly adjustable according to movements in an interbank lending rate, and the adjustment may occur every 6 months or every year.
Syndicated Eurocurrency loans not only reduce the default risk of a large loan to the degree of participation for each individual bank, but they can also add an extra incentive for the borrower to repay the loan. If a government defaults on a loan to a syndicate, word will quickly spread among banks, and the government will likely have difficulty obtaining future loans. Borrowers are therefore strongly encouraged to repay syndicated loans promptly. From the perspective of the banks, syndicated Eurocurrency loans increase the probability of prompt repayment.
The International Financial Market’s Influences on the World Economy
The international market is a double-edged sword, playing both positive and negative roles in affecting the world economy, exercising its positive influence in the following aspects:
(1) Adjusting balance of payment. Countries with surplus invest the redundant
foreign exchange in the international financial market while those countries
with a red account will make use of the credit loans provided in the market to
cover its budget deficit.
(2) Advancing the development of the world economy. International financial
markets provide international trade with financing facilities. After the World
War II, international trade industry has been growing at a rate higher than that
of the growth of average global economy. Members of the international
community often avail the international financial market to finance their foreign
trade business. Meanwhile, the market offers handy channels of availing foreign
funds to countries in shortage of capital for expanding production. The
international market turns considerable futile capital into practicable real capital,
and enlarges the total sum of domestic social capital of individual countries. (3) Enhancing the development of the world economy. Under the influence of
Globalization and economic liberalization, financial activities are no longer
constrained by borders. A global uniform financial market system has taken
shape. With constant innovation and exploration, international economic
connection manifests itself in the terms of financial relationships. Increasing
attention has been paid to finance as one of the most important economic
resources across the world. The globalization of international finance is
essentially the trend of optimization and utilization of such an economic
resource. The coordination of international financial relationships is becoming a
crucial aspect of the harmony of the international economic community. Thus,
financial security turns out to be the focus of the concern about world economy
However, the international financial market also imposes negative effects on the world economy:
(1) It provides with possibilities for speculation.
(2) Tremendous hot money flows unconstrained among nations, which hinders
sovereign countries to independently implement their own monetary policies,
and leads to instability of foreign exchange markets.
(3) It worsens the worldwide inflation.
Blue Chip: 绩优股
Even after Black Friday, most bulls remained, well, bullish. Nasdaq was still down
only to where it stood last November, and remained almost 40% higher than this time last year. The blue chip Dow Jones Industrial Average, too, although down 12% from its all time high, was broadly back to its November value. Gloom, the bulls argued,
was overdone, creating huge opportunities for bargain-hunters.
( from Economist )
Even without further antitrust action, technology stocks could have further to fall,
. How stretched is difficult to because their valuations have become so stretched
determine, because traditional valuation methods are not good at coping with fast-growing companies – especially if they have neither dividends or profits. For what it is worth, however, Nasdaq trades on a price / earnings ratio of 62 times
trailing earnings. Between 1973 and 1995, its p/e never exceeded 21. (from Economist)
price / earnings ratio？ price per share / earning per share 股票价格和股票收益