chapter 19 – int’l stock markets
DESCRIPTION
Chapter 19 – Int’l Stock Markets. Globalization and Trading Overseas Multiple Listings U.S. Stocks on Foreign Exchanges Foreign Stocks on U.S. Exchanges American Depository Receipts (ADRs) International Depository Receipts (IDRs) Diversification and Foreign Stocks Correlation Coefficients - PowerPoint PPT PresentationTRANSCRIPT
Chapter 19 – Int’l Stock Markets
Globalization and Trading Overseas Multiple Listings
U.S. Stocks on Foreign Exchanges Foreign Stocks on U.S. Exchanges American Depository Receipts (ADRs) International Depository Receipts (IDRs)
Diversification and Foreign Stocks Correlation Coefficients Diagram of -1, 0, +1 Correlations between two
risky assets
Chapter 19 – Int’l Stock Markets
International Exchanges United Kingdom (England)
London – LSE Regionals Consolidated in 1980s Dublin Stock Exchange started in 1995 FTSE (Footsie) 100 – Major Stock Index
Germany Major Stock Exchange – Frankfurt (FSE) Seven Independent Regionals Bank controlled – buying and selling is a bank
transaction
Chapter 19 – Int’l Stock Markets
European Developments The central idea
Pan-Europe (One market for all of Europe) Trading on many floors with one system
The hang-up Ownership Regulations on Trading Electronic Trading System
Connections to the U.S. Markets Nasdaq and NYSE
Chapter 19 – Int’l Stock Markets
International Exchanges Japan
Tokyo Exchange (TSE) Six Locations – Tokyo, Osaka, Nagoya, Kyoto,
Fukuoka, and Sapporo Zaraba Method – Saitori Members
China Still Rudimentary Government Controlled A-Market and B-Market
Chapter 19 – Int’l Stock Markets
Exchange Characteristics Ownership
Private to Government Trading Agents
Broker/Dealer to Government Controlled Trading Procedures
Continuous or Call, Electronic or Out-Cry Regulations
Self-Regulating Organizations to Government Controlled
Chapter 19 – Int’l Stock Markets
Global Depository Receipts - GDRs Shares issued by a financial institution (bank) Share value based on the underlying security
of a firm in a foreign country Shares meet local government regulations “Mutual Fund” type trading
Shares issued receive “dividend” pass-throughs Shares information is pass-through via
disclosures in original country reports to local country language
ADRs – American Depository Receipts Shares Trading on U.S. Exchanges
Chapter 19 – Int’l Stock Markets
Indexes of Performance Some Daily Measure of the General
Performance of Stocks Different Mechanics Different Stocks Different Weights Movement to “Free-Float”
Shares that are available for public trading Target date is June 2002