1、Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-0 9 The International Capital Market -The Stock Market (Chapter 13) Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-1 Overview of International Stock Market lAt year-
2、end 2003, total market capitalization of the worlds equity markets stood at $31,948billion lOf this amount, 89 percent is accounted for by the 31 developed countries. Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-2 lThe other 11% is accounted for by the m
3、arket capitalization of developing countries in “emerging markets”. nLatin America nAsia nEastern Europe nMideast/Africa Overview of International Stock Market Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-3 Measures of Liquidity lThe equity markets of th
4、e developed world tend to be much more liquid than emerging markets. nLiquidity refers to how quickly an asset can be sold without a major price concession. nThe turnover ratio is the result of stock market transactions over a period of time divided by the size of the stock market. Irwin/McGraw-Hill
5、 Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-4 Turnover Ratio in Developed Countries (Year End 2003, transactions in USD/market capitalization in USD) Spain 158 Germany 130 The United States 123 Italy 122 The United Kingdom 101 Irwin/McGraw-Hill Copyright 2001 by The McG
6、raw-Hill Companies, Inc. All rights reserved. 7-5 The Turnover Ratio in Developing Countries (Year End 2003, transactions in USD/market capitalization in USD) lPakistan 497 lIndonisia 237 lTaiwan 185 lIndia 139 lChina 83 lArgentina 6 Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc
7、. All rights reserved. 7-6 Measures of Market Concentration lEmerging Markets tend to be much more concentrated in relatively few companies. lThat is, a few issues account for a much larger percentage of the overall market capitalization in emerging markets than in the equity markets of the develope
8、d world. Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-7 Market Structure, Trading Practices, and Costs lPrimary Markets nShares offered for sale directly from the issuing company. lSecondary Markets nProvide market participants with marketability and sha
9、re valuation. Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-8 North American Equity Market Benchmarks Name Symbol Dow Jones Industrial Average DJIA NASDAQ Combined Composite CCMP S&P 500 SPX TSE 300 TS300 Mexico BOLSA Index MEXBOL Irwin/McGraw-Hill Copyri
10、ght 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-9 European Equity Market Benchmarks Name Symbol FT-SE 100 UKX EASDAQ EASDAQ Frankfurt DAX Index DAX IBEX Index IBEX Milan MIB30 MIB30 BEL20 Index BEL20 Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights re
11、served. 7-10 Asia/ Pacific Rim Equity Market Benchmarks Name Symbol NIKKEI 225 Index NKY Hang Seng Index HSI Sing Straits Times Index STI ASX All Ordinaries Index AS300 Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-11 Reasons for International Equity Trad
12、ing Globally integrated equity trading developed since 1980s. Following are the reasons: nBenefits of international portfolio investment nCapital markets becomes more liberalized nComputer and telecommunication development nMNCs realizing the benefits of sourcing capital internationally Irwin/McGraw
13、-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-12 Cross-Listing of Shares lCross-Listing refers to a firm having its equity shares listed on one or more foreign exchanges. lThe number of firms doing this has exploded in recent years. Irwin/McGraw-Hill Copyright 2001 b
14、y The McGraw-Hill Companies, Inc. All rights reserved. 7-13 Advantages of Cross-Listing lIt expands the investor base for a firm. lEstablishes name recognition for the firm in new capital markets, paving the way for new issues. lMay offer marketing advantages. lMay mitigate possibility of hostile ta
15、keovers. Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-14 American Depository Receipts lForeign stocks often trade on U.S. exchanges as ADRs. lIt is a receipt that represents the number of foreign shares that are deposited at a U.S. bank. lThe bank serves
16、 as a transfer agent for the ADRs Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-15 American Depository Receipts lThere are many advantages to trading ADRs as opposed to direct investment in the companys shares: nADRs are denominated in U.S. dollars, trade
17、 on U.S. exchanges and can be bought through any broker. nDividends are paid in U.S. dollars. nMost underlying stocks are bearer securities, the ADRs are registered. Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-16 lMacroeconomic Factors lExchange Rates l
18、Industrial Structure Factors Affecting International Equity Returns Factors Affecting International Equity Returns Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-17 lThe data do not support the notion that equity returns are strongly influenced by macro fa
19、ctors. lThat is correspondent with findings for U.S. equity markets. Macroeconomic Factors Affecting International Equity Returns Macroeconomic Factors Affecting International Equity Returns Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-18 Exchange Rates
20、lExchange rate movements in a given country appear to reinforce the stock market movements within that country. lOne should be careful not to confuse correlation with causality. Irwin/McGraw-Hill Copyright 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 7-19 Industrial Structure lStudies examining the influence of industrial structure on foreign equity returns are inconclusive.
