Case Study on Industrial and Commercial Bank of China

國際籌資曾經是跨國公司的領域。跨國公司不僅在世界各地銷售原材料，或在許多地理區域出售產品，還在世界各地尋找資本，在更便宜的地方籌集資金。投資者對外國公司股票的興趣也在增加，全球股市的國際化正在以更快的速度發生。然而，證券市場的國際化具有更寬泛的內涵涵蓋所有的投資，如養老基金大票的球員組合投資、對沖基金和私人股本基金和它們的同類，本模塊的重點是中國工商銀行從國際市場股權資本提高了。

 

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 為什么中國工商銀行感到有必要在中國市場股票發行

 

工商銀行主要向境外市場發行股票，以加強其公司治理實踐、風險管理和內部控制，并加強其財務業務、資產管理、企業銀行和投資銀行業務以及不良貸款處置能力。例如，工商銀行與安聯合作開發和提供銀行擔保產品和服務給他們的客戶；至于美國運通，工商銀行開始并繼續擴大其在銀行卡業務、風險管理和客戶服務方面的合作，以提高其財務業績和效率。

 

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 國外市場股權發行的利與弊

 

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#分頁標題#e#

 

Attraction of the ICBC in Regards To Providing Exchange Listings to Foreign Investors 工商銀行對向外國投資者提供外匯上市的吸引力

 

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 投資者為何對交易所上市感興趣？

 

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 外商投資工商銀行的風險

 

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#分頁標題#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.