Summary: World securities market. The World Securities Market: General Characteristics of Higher Professional Education
The release of securities into the market is called emission , and the firm or organization that produces them - issuer .
World financial market (securities market) - This is a segment of the global loan capital market, where the issue and purchase and sale of securities and various financial obligations are carried out. Therefore, the MFR is often called the world securities market.
In the primary financial market, bonds, shares, etc. are issued. In the secondary market, there is a centralized or non-centralized (through stock exchanges) purchase and sale of previously issued securities.
World securities market is divided into 2 parts:
1) circulation between countries of shares and bonds of national issuers of different countries (for example, bonds are issued in country A in its national currency and sold in countries B, C, D, etc.);
2) a special issue of securities of foreign issuers for a certain national market (for example, country A allows to open a foreign bond market for foreign individuals and legal entities issued in the currency of this country).
The main instruments of borrowing in the world market are bonds, shares, Euro bills, etc.
Bonds placed by foreign firms in the US are called Yankees, in Japan - samurai, in Spain - matadors, in the UK - bulldogs.
The market for long-term loans exists, as a rule, in the form of a bond market. With a certain degree of conventionality, it can be represented as a combination of two sectors: the foreign bond market and the Eurobond market. A foreign bond is essentially a type of national bond. Their specificity is that the issuer and the investor are located in different countries. There are two main ways to issue foreign bonds (see above).
Eurobond – it's a bond issued by the borrower through the intermediary of the International Banking Consortium and denominated in Eurocurrencies. It is usually issued in a currency other than the currency of the issuing country, and is placed simultaneously in several countries (on the international capital market). The usual maturity of Eurobonds is 10-15 years. Eurobonds have a number of advantages over foreign bonds. They are not subject to national securities regulations, interest on Eurobond coupons is not subject to withholding tax, they provide more opportunities for profit and currency risk avoidance. Eurobond holders do not require special registration. Eurobonds are issued to the bearer, so they have high liquidity.
Bonds have been circulating on the world market since the 1960s; before the shares arrived there, and the value of bonds in international circulation is several times higher than the volume of shares.
The placement of foreign bonds on the national market is carried out by associations of banks, which are called consortia.
International bonds are placed mainly in the form of a market eurobonds- issues of foreign issuers in the markets of developed countries. Most issues of foreign bonds are concentrated in the market of 4 countries: USA, Germany, Japan, Switzerland.
The US foreign bond market is attractive, firstly, because of the large size of loans ($100 million on average), and secondly, because of their long duration (up to 25-30 years).
There are more reliable borrowers on the Eurobond market, so developing countries have limited access to this market. The duration of the issue of Eurobonds is now 5-7 years.
International bonds are issued in different currencies. And since they have different stability, the interest rate, and, consequently, the yield of bonds, mainly depend on the stability of the currency in which the loan is issued.
In addition to Eurobonds, various instruments of loan capital market transactions have become widespread, in particular Euro bills- short-term debt obligations that can be alienated (assigned). Interest on euro bills more accurately reflects the movement of current market rates. Unlike other securities, euro bills can be issued by companies that do not have an official rating, and for any period (usually 3-6 months).
Widespread in the European market are also certificates of deposit- these are written certificates issued by banks on the deposit of funds by depositors, giving them the right to receive a deposit and interest (terms of deposits from a month to several years).
The profound qualitative changes that have taken place over the past decades have led to the creation of a global integrated market for loan capital. This creates, on the one hand, more favorable conditions for obtaining global financial resources, and on the other hand, it significantly increases systemic risks. That is why the importance of international monetary and financial institutions is growing.
STATE EDUCATIONAL INSTITUTION
HIGHER PROFESSIONAL EDUCATION
RUSSIAN CUSTOMS ACADEMY
Rostov branch
Department of International Economic Relations
Coursework in the discipline:
"International Economic Relations"
SUBJECT:
"Modern trends in the development of the world securities market".
Performed:
Third-year student of the specialty "World Economy"
Kolosova Ekaterina
Checked:
Senior Lecturer, Candidate of Economics A.A. Guiliano
Rostov-on-Don
Introduction |
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Essence and main features of the global securities market |
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The concept and main elements of the global stock market |
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Main Stages of Development of the World Securities Market |
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Features of the development of the global securities market on present stage |
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The role of individual countries in the international securities market |
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The role of Russia in the global securities market |
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3. Problems and prospects of modern development of the world stock market |
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Conclusion |
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Bibliography |
Introduction
It is well known that the securities market is one of the main mechanisms for the accumulation and redistribution of investment capital in the global economy. At the present stage of development of the world economy, one can speak of the predominance of this source of capital formation in comparison with credit and domestic accumulation and the further growth of its significance.
The globalization of the world economy, which has accelerated over the past decades, has led to the formation of an almost unified global capital market. To a certain extent, one can also speak of the reverse pattern: the rapidly developing international securities market serves as the driving force for the further integration of national economies into a single world economy.
The relevance of the topic of the work is also emphasized by the fact that in modern conditions it is impossible to ensure the growth of competitiveness without attracting large capitals, financing development projects only at the expense of enterprises' profits. For this reason, the struggle for investment resources is at the center of modern world competition.
The securities market within a market economy is an important tool for achieving macroeconomic balance, in particular, by ensuring financial stability. The formation of an efficient securities market is the most important condition for mitigating the negative effects of the global financial crisis.
Thus, we see that the research topic is extremely relevant for modern economic science. This is also emphasized in the works of various researchers-economists. We note the works of such authors as Alekhin B.I., Anikin A.V., Matrosov S.V., Morovoy A., Rozhkova I.V., Rubtsov B.B., Fabozzi F., Fedorova A., Eng M. V., Yurov S.N. and a number of others.
The purpose of the course work is to identify the essential features of the global securities market.
This goal involves the solution of the following tasks:
The structure of the work contributes to a more complete disclosure of the topic and includes an introduction, three chapters with paragraphs, a conclusion and a list of references.
1. Essence and main features of the global securities market
1.1 The concept and main elements of the global stock market
World experience in the socio-economic development of industrial societies convincingly indicates that at a certain stage of concentration (aggregation) of industrial production, there is an objective need for concentration, centralization of industrial capital. In turn, the concentration of capital, its centralization lead to the emergence of large joint-stock companies, corporations and adequate financial institutions, including the securities market.
The international stock market is a superstructure over the national stock markets, which form its basis, and is a market for secondary financial resources. If in the national stock markets the subjects of financial transactions are legal entities and individuals of a given country, then in the international stock market - different countries.
There are a number of factors contributing to the formation of the international stock market and the expansion of its geographical boundaries. These include:
1) the growing interconnection between national and foreign sectors of the economy;
2) deretulation by the state of cash and capital flows, exchange rates, and in some cases the migration of labor resources;
3) introduction of innovations in trade operations, increasing the role and importance of international trade and stock exchanges, improving payment settlements;
4) development of computer-based interbank telecommunications, electronic transfer of financial assets 1 .
In terms of its structure, the international stock market is a combination of various financial institutions through which capital is transferred in the sphere of international economic institutions. These are TNCs, TNBs, international stock exchanges and financial institutions, government agencies, and various financial intermediaries.
All transactions in the international stock market can be divided into commercial and purely financial (associated with intersectoral migration of capital). National financial market instruments (various types of securities, including promissory notes) are at the same time an instrument of the international stock market.
Throughout the industrial world, the stock market, being an integral part of the financial market, allows you to:
mobilization of temporarily free financial resources and their transformation into investment capital;
financing (investment) of the real sector of the economy;
free flow of investment capital between various industries and enterprises;
effective attraction of savings of the population and their transformation into investments of the national economy:
effective solution of social problems of society, etc. 1 .
Along with the main economic role - attracting investments in the economy, the securities market is at the same time an important tool for social partnership between issuers and investors. Investors (individuals and legal entities) provide issuers with their savings in exchange for securities, receive income (dividends), as well as property and non-property rights. These rights give investors (shareholders) the opportunity to participate in the management of a joint-stock company. Thus, in countries with developed stock markets, the population not only receives additional income from transactions with securities, but is also widely involved in corporate governance, which indicates the emergence of a steady trend towards a decrease in the level of social stratification in society.
In general, we can say that the international securities market is understood as one of the segments of the global financial market, that is, the market that ensures the distribution of funds between participants in international economic relations. In the securities market, a set of economic relations is realized regarding the issue and circulation of securities between its participants.
1.2 Main stages of development of the global securities market
The world securities market (ISMB) has existed for about 150 years and has gone through a number of stages in its development.
The first stage covers the time before the start of the World War, when there were mainly sporadic issues of bonds by foreign issuers in need of financial resources.
The appearance of securities and the performance of various kinds of financial transactions with them has a long history. The prototype of stock transactions was the process of exchanging one currency for another between traders at fairs. In different cities of the world, merchants from all over the world carried on a brisk trade in their goods. In order to harmonize the monetary units of different countries, there were exchange offices, the owners of which exchanged money at the current rate for an appropriate commission. Due to the growth of trade and the increase in the number of futures transactions, debt receipts - bills of exchange - gradually became the object of financial transactions. A bill of exchange is the first classic security that laid the foundation for the emergence and development of the stock market. Bills of exchange were very widespread in Great Britain, Germany and other countries that actively traded with India and China. A bill of exchange was a very convenient instrument of settlement between suppliers and buyers, but even at that stage of the formation of the bill of exchange system, it was not without fraud 1 .
Initially, transactions with securities were made on commodity exchanges and other wholesale markets. The Belgian port city of Antwerp is officially considered the birthplace of the stock exchange. The first trading on this stock exchange took place in 1592. The beginning of the era of great geographical discoveries served as an impetus for the formation of organized trading in securities and the emergence of their new classical types. The equipment of sea expeditions and large trade caravans to the countries of the New World required significant investments. This entailed the association of merchants, shipowners, bankers and industrialists in a kind of partnership in order to create a common capital. The introduction of a share was formalized by a special document certifying the ownership of one's share in the total capital and the right to receive part of the profit in the event of a successful joint venture. This document was called a "share", and the partnership became known as a joint-stock company or company. The first such joint-stock companies are considered to be the Dutch and English East India companies, as well as the French company "Companies des Ende ocidantal", and these companies arose in the period from 1600 to 1628. The activation of the market for stock values and the rapid growth of stock trading falls on the first third of the 18th century and subsequent years. It was then that stock exchanges were formed in France, Great Britain, Germany and the USA. The number of stock exchanges increased rapidly and close interrelations were formed between them 1 .
In the late 18th and early 19th centuries, the role of the stock exchange in the capitalist economy increased significantly. There is a process of initial accumulation of capital. The first joint-stock banks and industrial corporations appear in the countries of Europe and America, although at that time operations with securities did not yet have a significant impact on the processes taking place in the economy. The stock exchange did not immediately, but gradually entered into a single system of financial and economic relations, became an important element of the entire economic mechanism of the state. This happened with the growth of industrial production, the development of trade, credit relations, the construction of railways, etc. The element of the market of free competition ensured an almost unlimited flow of large funds from industry to industry, bypassing state distribution, through the stock exchange and the lending sector.
Such an intensive growth of social production, which significantly outpaced consumption, led to a significant increase in living standards, as well as to a change in the role of financial capital in the system of economic relations. This period is characterized as the time of unorganized "wild" market. Indeed, at that time there was almost no legislation regulating certain business transactions, regulatory bodies were not formed, most transactions were not registered in any way. All this directly applies to the securities market as an integral part of the state economy of the capitalist countries of the last century. With the emergence of monopolies, large associations, enterprises and an increase in the issue of securities, the exchange and over-the-counter turnover of financial assets is growing. A large role is played by commercial banks that carry out the initial public offering of shares of corporations. The stock market is becoming more and more regulated 1 .
The securities market in the United States has developed especially widely. If in continental Europe businessmen generally preferred to keep free cash in bank accounts, purchase insurance or real estate, then in America the majority of entrepreneurs invested capital in financial assets. Thus, the US national stock market has significantly outstripped the European one in its development, it has developed a more advanced mechanism for financial transactions, and at present it is rightfully considered the most organized and democratic securities market. However, the stock market, like the entire economy as a whole, is not immune from recessions, crises and other shocks, sometimes causing paralysis of all economic activity. Moreover, it is the collapse on the stock exchange that serves as a formidable omen of a general financial catastrophe in the state. The stock market crisis of 1929 was especially terrible and grandiose in its consequences, when the fall in rates on the New York Stock Exchange led to a world economic crisis 1 .
Shows that ... in the United States is divided into two large segments: organized exchanges valuable papers and OTC market. At...
Introduction
It is well known that the securities market is one of the main mechanisms for the accumulation and redistribution of investment capital in the global economy. At the present stage of development of the world economy, one can speak of the predominance of this source of capital formation in comparison with credit and domestic accumulation and the further growth of its significance.
The globalization of the world economy, which has accelerated over the past decades, has led to the formation of an almost unified global capital market. To a certain extent, one can also speak of the reverse pattern: the rapidly developing international securities market serves as the driving force for the further integration of national economies into a single world economy.
The relevance of the topic of the work is also emphasized by the fact that in modern conditions it is impossible to ensure the growth of competitiveness without attracting large capitals, financing development projects only at the expense of enterprises' profits. For this reason, the struggle for investment resources is at the center of modern world competition.
The securities market within a market economy is an important tool for achieving macroeconomic balance, in particular, by ensuring financial stability. The formation of an efficient securities market is the most important condition for mitigating the negative effects of the global financial crisis.
Thus, we see that the research topic is extremely relevant for modern economic science. This is also emphasized in the works of various researchers-economists. We note the works of such authors as Alekhin B.I., Anikin A.V., Matrosov S.V., Morovoy A., Rozhkova I.V., Rubtsov B.B., Fabozzi F., Fedorova A., Eng M. V., Yurov S.N. and a number of others.
The purpose of the course work is to identify the essential features of the global securities market.
This goal involves the solution of the following tasks:
The structure of the work contributes to a more complete disclosure of the topic and includes an introduction, three chapters with paragraphs, a conclusion and a list of references.
1. Essence and main features of the global securities market
1.1 The concept and main elements of the global stock market
World experience in the socio-economic development of industrial societies convincingly indicates that at a certain stage of concentration (aggregation) of industrial production, there is an objective need for concentration, centralization of industrial capital. In turn, the concentration of capital, its centralization lead to the emergence of large joint-stock companies, corporations and adequate financial institutions, including the securities market.
The international stock market is a superstructure over the national stock markets, which form its basis, and is a market for secondary financial resources. If in the national stock markets the subjects of financial transactions are legal entities and individuals of a given country, then in the international stock market - different countries.
There are a number of factors contributing to the formation of the international stock market and the expansion of its geographical boundaries. These include:
1) the growing interconnection between national and foreign sectors of the economy;
2) deretulation by the state of cash and capital flows, exchange rates, and in some cases the migration of labor resources;
3) introduction of innovations in trade operations, increasing the role and importance of international trade and stock exchanges, improving payment settlements;
4) development of interbank telecommunications based on computers, electronic transfer of financial assets.
In terms of its structure, the international stock market is a combination of various financial institutions through which capital is transferred in the sphere of international economic institutions. These are TNCs, TNBs, international stock exchanges and financial institutions, government agencies, and various financial intermediaries.
All transactions in the international stock market can be divided into commercial and purely financial (associated with intersectoral migration of capital). National financial market instruments (various types of securities, including promissory notes) are at the same time an instrument of the international stock market.
Throughout the industrial world, the stock market, being an integral part of the financial market, allows you to:
Mobilization of temporarily free financial resources and their transformation into investment capital;
Financing (investment) of the real sector of the economy;
Free flow of investment capital between various industries and enterprises;
Effective attraction of savings of the population and their transformation into investments of the national economy:
Effective solution of social problems of society, etc.
Along with the main economic role - attracting investments in the economy, the securities market is at the same time an important tool for social partnership between issuers and investors. Investors (individuals and legal entities) provide issuers with their savings in exchange for securities, receive income (dividends), as well as property and non-property rights. These rights give investors (shareholders) the opportunity to participate in the management of a joint-stock company. Thus, in countries with developed stock markets, the population not only receives additional income from transactions with securities, but is also widely involved in corporate governance, which indicates the emergence of a steady trend towards a decrease in the level of social stratification in society.
In general, we can say that the international securities market is understood as one of the segments of the global financial market, that is, the market that ensures the distribution of funds between participants in international economic relations. In the securities market, a set of economic relations is realized regarding the issue and circulation of securities between its participants.
1.2 Main stages of development of the global securities market
The world securities market (ISMB) has existed for about 150 years and has gone through a number of stages in its development.
The first stage covers the time before the start of the World War, when there were mainly sporadic issues of bonds by foreign issuers in need of financial resources.
The appearance of securities and the performance of various kinds of financial transactions with them has a long history. The prototype of stock transactions was the process of exchanging one currency for another between traders at fairs. In different cities of the world, merchants from all over the world carried on a brisk trade in their goods. In order to harmonize the monetary units of different countries, there were exchange offices, the owners of which exchanged money at the current rate for an appropriate commission. Due to the growth of trade and the increase in the number of futures transactions, debt receipts - bills of exchange - gradually became the object of financial transactions. A bill of exchange is the first classic security that laid the foundation for the emergence and development of the stock market. Bills of exchange were very widespread in Great Britain, Germany and other countries that actively traded with India and China. The bill was a very convenient instrument for settlements between suppliers and buyers, but even at that stage of the formation of the bill of exchange system, it was not without fraud.
Initially, transactions with securities were made on commodity exchanges and other wholesale markets. The Belgian port city of Antwerp is officially considered the birthplace of the stock exchange. The first trading on this stock exchange took place in 1592. The beginning of the era of great geographical discoveries served as an impetus for the formation of organized trading in securities and the emergence of their new classical types. The equipment of sea expeditions and large trade caravans to the countries of the New World required significant investments. This entailed the association of merchants, shipowners, bankers and industrialists in a kind of partnership in order to create a common capital. The introduction of a share was formalized by a special document certifying the ownership of one's share in the total capital and the right to receive part of the profit in the event of a successful joint venture. This document was called a "share", and the partnership became known as a joint-stock company or company. The first such joint-stock companies are considered to be the Dutch and English East India companies, as well as the French company "Companies des Ende ocidantal", and these companies arose in the period from 1600 to 1628. The activation of the market for stock values and the rapid growth of stock trading falls on the first third of the 18th century and subsequent years. It was then that stock exchanges were formed in France, Great Britain, Germany and the USA. The number of stock exchanges increased rapidly and close relationships formed between them.
Introduction
Chapter 1. Theoretical foundations for the functioning of the international securities market
1.1 The concept of the international securities market and its development
1.2 Classification of securities in the international market
1.3 International fund centers
Chapter 2. Analysis of the functioning of the international securities boom market G
2.1 The modern securities market and its promising areas
2.2 Dynamics of the international securities market
Chapter 3. Problems of Belarus' entry into the world securities market
Conclusion
List of sources used
Introduction
One of the leading trends in financial globalization is the formation and development of the international securities market - ISMB, which ensures the movement of transnational capital flows and their subsequent placement. The international stock market as a system of institutions and relations refers to that part of the international financial market where transactions are carried out with foreign stock assets, such as shares, bonds and derivative financial instruments, and there is an international movement of financial claims and liabilities between the owners of assets, companies managing them and debtors. Being at its initial stage a small part of the international financial market, it then expanded significantly and has now become one of its main components. Although in some cases the close interconnection and interweaving of various flows of transnational financial resources during their intercountry movement makes it difficult to clearly distinguish this market segment, nevertheless, in general, the trend towards its expansion, its growing weight in the system of international financial markets is becoming more and more obvious.
The international securities market initially developed as part of national markets and then gradually became a segment of the world market as a whole. First of all, it was considered as a set of transactions with foreign securities on national markets, purchases and sales of international securities proper. In modern conditions, national and international markets are closely interconnected, it is only conditionally possible to consider the actions of the participants in these markets in isolation from each other, in fact, the operations performed are of a cross nature, the advantages of one or another market are used to obtain higher income.
Now the world securities market is concentrated in two centers: the Tokyo Stock Exchange and the New York Stock Exchange, which was founded in 1792 by the “sycamore agreement”, which gave impetus to the creation of the largest exchange in the world. In 1971, the exchange was registered as a non-profit organization, and the entire world market began to be reflected in the daily movements of company stock prices. Now here are the shares of the world's largest companies.
It is interesting that the world securities market in our understanding has existed for about 150 years. Its development began before the First World War, then it was severely hampered by the Great Depression and the Second World War, but in the 60s, along with the technical revolution and the outflow of capital, the second stage of the rapid development of the global stock market began. The third stage of development is usually associated with the emergence of euroshares, but it is logical to single out the 90s, when Russian oil and telecommunications giants appeared on the world market.
The object of research is the securities market.
The subject of the study is the global securities market.
The purpose of the course work is to study the international securities market, its role and the problems of joining the Republic of Belarus.
To achieve this goal, it is necessary to solve the following tasks:
consider the theoretical foundations of the functioning of the international securities market;
analysis of the functioning of the international securities market;
study the problems of Belarus' entry into the world securities market. security market
The work consists of introduction, 3 chapters, conclusion, list of references.
Chapter 1. Theoretical foundations for the functioning of the international securities market
1 The concept of the international securities market and its development
Difficulties that arise in determining the MRCB require the development of uniform approaches based on general principles. According to the principle of transfer of ownership, these transactions, for example, can include transactions between non-residents and residents of a given country, or between non-residents, the former are often defined as foreign, the latter as actually international in the securities market. At the same time, it is possible to consider the composition of the participants in the international financial market as investors and borrowers, as well as professional intermediaries specializing in operations in this market.
The international stock market is also defined as a group of institutions and organizations that provide international trading in financial products, for example, a section of foreign shares on the stock exchange. In this case, the international securities market also includes directly the relationship of sellers and buyers in the course of trading in financial instruments. Shares for sale in this section are offered, for example, by a multinational company, and the buyer is a brokerage firm engaged in international operations.
Another important part of the international financial market is the totality of financial instruments circulating in this market. In a broad definition, they include all types of financial instruments that are traded between residents and non-residents, or between non-residents. In most developed market countries, securities having national jurisdiction can be purchased by a foreign investor under capital convertibility regime.
The international securities market in a narrower definition is considered as a market for specific international instruments traded in limited market segments. Therefore, the instruments of the international securities market usually include the following: shares of foreign companies - exchange and over-the-counter transactions; foreign bonds and eurobonds, which enable foreign borrowers to accumulate funds by placing their securities on foreign debt markets; derivatives, where the underlying asset is the above groups of instruments that ensure the cross-border movement of capital through transactions related to hedging and speculative transactions between residents of different countries.
The close connection of the international securities market with other segments of the financial market is manifested primarily through the mediation of the international currency market, serving the movement of cross-border capital flows. To a large extent, it is based on the activities of international financial centers, where the necessary financial infrastructure is available. Liberalization of foreign exchange transactions in freely convertible currencies in the 70-80s. significantly expanded the circle of participants who have the opportunity to directly carry out foreign exchange transactions, although due to their specificity and scale, the implementation of international financial transactions is still carried out mainly through "major players". At the same time, the volatility of foreign exchange markets, especially during periods of crisis shocks, becomes one of the factors hindering the movement of capital between countries, although in some cases the presence of stable flows, for example, between the stock and credit markets, can help maintain exchange rates and transaction volumes.
Along with the foreign exchange market, the influence on international stock transactions of the market of derivative securities, which are based on traditional financial instruments and use the possibilities of hedging and speculative operations on changes in the rates of securities, currencies, etc., is increasing. The uncertainty and instability of the global financial market is accompanied by the emergence of more and more new ones. types, necessitating further development of the mechanism for managing financial instruments. This becomes especially important in the case of using credit derivatives based on depositary receipts and debt securities.
The promotion of the securities market to the place of one of the main segments of the global financial market, both in terms of the breadth of the financial instruments used and the volume of attracted capital, required from national and international organizations a much more complete statistical coverage of the main elements of the global stock market. The most detailed statistical information available on stock exchange markets is presented in the publications and database of the World Federation of Exchanges, which, in addition to associated 54 full participants with a capitalization of more than 60 trillion. dollars In recent years, the main trends in the development of the securities market are increasingly reflected in the publications of rating agencies and consulting companies. Despite the significant difficulties in conducting international comparisons for various groups of financial instruments, as well as for investors and intermediaries, cross-country information on many financial indicators is expanding, which is especially important for determining the situation on the market and in the global economy as a whole. For international comparisons, static publications of the International Monetary Fund, the World Bank, the Bank for International Settlements, the OECD and other international and regional organizations are usually used.
The development of the international securities market is the result of complex processes in the sphere of the movement of transnational capitals, which determine their functional and regional structure. The processes of global financial integration have intensified since the early 1990s. During this period, companies in the United States and other developed countries significantly increased the international diversification of asset investment, and by the end of 1999, foreign assets had already reached a significant amount, amounting to 28 trillion. dollars, or 79% of world GDP. A system of cross-border flows has developed between the United States, Western Europe and Japan, dominated by the capital of American companies, which accounted for about 50% of all open international financial positions. At the same time, cross-border financial ties with countries with emerging markets were at a low level: in general, the movement of capital did not exceed $ 1 trillion. dollars. Their development was hampered by the possible risks of macroeconomic and political instability, which especially intensified after the Asian financial crisis of 1997-1998, as well as limited information about the potential of the markets. On the other hand, investors in emerging markets did not have sufficient access to the financial markets of developed countries, both due to the weak development of the international operations sector in their financial system, and as a result of the restrained position of American and Western European companies in relation to attracting funds from this group of countries. .
By the beginning of the XXI century. The network of cross-border investments is undergoing significant changes as economic and political ties expand and deepen between different regions and groups of countries. The growth of foreign assets is no longer determined only by the movement of investments between the major financial centers of developed countries, but also reflects the growing importance of the financial markets of developing countries. The system of cross-border relations is becoming noticeably more complicated, mutual capital flows in Europe after the creation of the eurozone are growing, and the volume of financial resources moving between developed and developing countries, especially between Western European countries and the countries of the Near and Middle East, Southeast Asia, etc. there is a decrease in the role of the United States as a leading exporter of capital - over the first decade of this century, the share of the United States in the total volume of cross-border investments has decreased from 50% to 32%.
At the same time, flows are also expanding between various south-south developing regions as governments and corporations in these countries become more active players in global markets. In the period before the 2008 global financial crisis, cross-border investment between developing countries in Asia, Latin America and the Middle East grew about twice as fast as investment with developed countries, but this trend is now recovering again.
2 Classification of securities in the international market
The securities market is of no small importance for the enterprise in terms of providing the enterprise with financial assets. All funds of the enterprise can be divided into two types:
) funds to maintain the current liquidity of the enterprise;
) funds intended for investment, for the development of production.
If the enterprise has a shortage of funds, managers can decide to attract loans; if there is an excess of funds, the enterprise itself can act as a creditor. In both cases, securities can act as a loan instrument. In its size, the securities market far exceeds all other markets. The securities market is not associated with the presence of any natural resources or the political system in the state, and therefore can exist in any country.
By regulating the securities market, the state
establishes mandatory requirements for the activities of issuers, professional participants in the securities market;
creates systems for protecting the rights of owners and monitoring the observance of their rights by issuers and professional participants in the securities market;
carries out registration of issues of emissive securities and issue prospectuses and control over observance by issuers of the conditions and obligations stipulated in them;
licenses the activities of professional participants in the securities market;
participates directly in open market operations.
Representative bodies of state power and bodies of local self-government set limits on the issue of securities issued by the executive bodies of the corresponding level.
All types of professional activity in the securities market are carried out on the basis of a special permit - a license issued by the relevant government authority (in Russia - the Federal Commission for the Securities Market or its authorized bodies that have a general license.) The license issuing authority controls the activities of professional participants the securities market and makes a decision to revoke the issued license in case of violation of the securities legislation.
When considering options for placing free cash assets of an enterprise in securities, it is necessary to proceed from the risk-return ratio. The highest return can be obtained on securities with the highest risk. The most reliable of all existing securities are government securities, which provide not very high, but guaranteed income.
When issuing debt obligations, the state pursues the following goals:
financing of the state budget as a whole or specific state investment programs;
smoothing cash gaps (differences in the time of receipt of tax payments and public spending);
refinancing (repayment of previous government loans).
In the United States, federal government securities are usually divided into direct obligations of the Federal Treasury, which performs the functions of the US Department of the Treasury, and obligations of federal agencies. Three types of Treasury bonds are especially popular among Treasury securities:
treasury bills - discount obligations issued for up to one year in order to cover cash gaps;
treasury notes - interest-bearing bonds with maturity from one to 10 years;
treasury bonds - interest-bearing bonds with a maturity of more than 10 years; 30-year bonds enjoy the greatest interest, the real yield to maturity of these securities is one of the main financial indicators of the economic situation in the US.
For a number of obligations of federal agencies, the US Government provides its own guarantees. Agencies whose obligations are guaranteed by the government include EXIM Bank (Exim Bank), which issues bonds to finance foreign trade, and the Government National Mortgage Association (State National Mortgage Association, a division of the Ministry of Housing and Urban Development), which issues real estate-backed securities. .
UK government securities have a number of features. For example, in 1888, the British Government issued bonds with a 2.5% annual coupon, which could be redeemed by the issuer after 1924. Later, a number of similar bond issues were made. These bonds are circulating on the market to this day. In fact, these bonds do not have a definite maturity (they are called bonds with an indefinite maturity date - undated bonds), their redemption will be beneficial for the issuer when the real market interest rates fall below the interest rates on these bonds.
Another feature of UK government bonds is the existence of index linked bonds. The essence of these bonds is that the interest income paid on them increases by the value of the consumer price index, which is calculated for 600 types of goods.
The second place in terms of reliability among securities is occupied by a bond - an issuance security that secures the right of its holder to receive from the issuer of the bond within the period stipulated by it its nominal value and the percentage of this value fixed in it or other property equivalent.
Unlike stocks, bonds express exclusively credit relations and have a final circulation period, however, this period can be very long. So, in 1996, the American company IBM placed bonds with a maturity of 99 years.
The Russian securities market is dominated by bonds issued by state authorities. As for corporate bonds, the total volume of their issue in 1997 was less than 1% of the volume of government short-term bonds issue. The main deterrent to the activation of corporate bond issues should be called high interest rates in the domestic market and the obligation to pay interest income on bonds, in contrast to shares, on which dividends can not be paid or paid in a minimum amount. In order to reduce the cost of servicing bonds, Russian enterprises are paying more and more attention to foreign financial markets. This process intensified after the credit ratings of the Russian Federation were assigned by the world's largest rating agencies at the end of 1996. Already in the following 1997, Russian issuers made 19 issues of Eurobonds in the amount of 7.25 billion US dollars, and the authoritative magazine Euromoney awarded Russia a prize in the nomination "The best borrower is a beginner."
It is necessary to distinguish between types of international securities.
Eurobonds (eurobonds) are securities placed simultaneously on the markets of several countries and denominated in a currency other than the national currency of the borrower or lender. Such bonds are placed through issuing syndicates of financial companies in several countries. The main part of the Eurobond market is made up of medium-term registered bonds (euro-medium-term-notes, EMTNs).
Foreign bonds (foreign bonds) - bonds placed on the market of one state (as a rule, resident companies are the underwriter), and the loan currency for the lender is national, and for the borrower - foreign.
Depending on the type of income, there are:
bonds with a fixed rate of interest, bonds with a constant coupon (straight bonds, standard fixed-rate security issues);
bonds with a floating rate of interest, bonds with a variable coupon (floating-rate bonds);
discount bonds, zero coupon bonds (zero-coupon bonds, discount bonds).
The third type of securities actively used in investments is stocks. A share is an issuance security that secures the rights of its owner (shareholder) to receive part of the profit of a joint-stock company (JSC) in the form of dividends, to participate in the management of the JSC and to part of the property remaining after its liquidation.
Share properties:
certifies the ownership of the property of the joint-stock company after its liquidation, and also gives the right to manage this property in the course of the activity of the joint-stock company;
perpetual, inextinguishable security;
limited liability of the owner (it is impossible to lose more than invested in the share);
indivisibility of rights (with collective ownership of a share, the same rights are granted as with individual ownership);
an exclusively registered security (according to Russian legislation), bearer shares are widely used in Germany and Switzerland.
Under the laws of most countries, the circulation on the domestic market of securities of foreign issuers, as well as securities of residents on foreign markets, is limited, and sometimes completely prohibited. To overcome this kind of barriers to the international integration of capital, depositary receipts arose. They first appeared in 1927 in connection with the British government's ban on exporting shares of national companies abroad. As of June 1997, the volume of American investments in foreign securities through depository receipts is more than $250 billion, including about $6 billion in shares of Russian companies. All existing receipts are divided into Global depositary receipts (GDR - global depositary receipts) and American depositary receipts (ADR - American depositary receipts). Characteristics of the existing types of depository receipts are given in Table 1.1.
Table 1.1 - Characteristics of existing types of depositary receipts
Source:
Let's consider the technology of emergence of depository receipts on the example of issuing American depositary receipts (ADR) for Russian shares. The issuance of depositary receipts is carried out by the depositary-agent, who is a resident of the country in which the receipts are issued. The depository agent (95% of ADR issues are accounted for by three banks - Bank of New York, Citybank, J.P. Morgan) is registered in the register of shareholders of a Russian company as a nominal holder. The issuing enterprise concentrates part of its shares and transfers these shares in nominal holding to the depository-agent. The depositary-agent issues certificates for the entire number of securities registered in his name. The ratio between the number of shares and the certificates issued for them is set on the basis of the market value of the shares so that the cost of one ADR is in the range of 20-50 US dollars. ¨
Along with the task of placing temporarily free cash in securities, an enterprise often faces the task of attracting additional resources to enhance its economic activity. Here again, securities appear as a solution to the problem. That is, the company begins to act no longer as an investor, but as an issuer of securities. Of the variety of securities, only two are used to raise capital - stocks and bonds. Both papers have their advantages and disadvantages. Circulating shares are less burdensome for the enterprise in terms of mandatory payments, that is, with the support of shareholders, it is possible to build a dividend policy in such a way that only minimal dividends are paid, and the bulk of the profit is directed to the development of production. For a bonded loan, such a deferral of interest payments is not possible. In addition, a bond loan is urgent and sooner or later the time comes to repay the loan - to repay the bonds. On the other hand, with an additional issue of shares, shareholders of the enterprise have problems, because with the appearance of an additional number of shares in circulation, the share of shareholders in the authorized capital of the company, and, accordingly, the ability to influence the policy of the enterprise, is significantly reduced. Therefore, most often, enterprises with highly dispersed capital resort to the issue of shares, when none of the shareholders is able to single-handedly influence the policy of the enterprise, or enterprises with highly concentrated capital, when the main owner is not afraid of a new issue of shares and a slight decrease in the share in the capital of the company .
Both shares and bonds are emissive securities, that is, they are placed in a single issue or issue. The issue of securities is a set of securities of one issuer that provide the same amount of rights to the owners and have the same conditions for initial placement. An equity security is simultaneously characterized by the following features:
placed by issues;
fixes the totality of property and non-property rights subject to certification, assignment and unconditional exercise in compliance with the form and procedure established by law;
has an equal volume and terms of exercising rights within one issue, regardless of the time of purchase of the security.
The procedure for issuing securities includes the following steps:
) adoption by the issuer of a decision on the issue of securities;
) preparation of the issue prospectus;
) registration of the issue prospectus and issue of securities;
) production of securities certificates - for the documentary form of issue;
) disclosure of information contained in the prospectus and in the report on the results of the issue;
) placement of issuance securities;
) registration of a report on the results of the issue of emissive securities.
In the case of a public issue of securities, the issuing enterprise is obliged to provide access to the information contained in the emission prospectus. An issuer placing securities is obliged to provide any potential owners with the opportunity to access information before purchasing securities.
3 International fund centers
The relationship between the financial and stock markets, the interpenetration of various investment functions is clearly visible in the activities of international financial centers - the IFC. In a number of cases, the formation of the MFC took place around the exchange infrastructure, or the development of various market segments within their framework proceeded in parallel. It is precisely because of their wide functionality that international financial centers were able to provide conditions for attracting foreign investors. They are becoming one of the foundations of the modern network structure of the world economy, which ensures the movement of financial flows between large clusters of the world economy.
The formation of international financial centers was a consequence of the internationalization of economic processes, further concentration of financial capital at the present stage of development of the world economy. They have developed as a form of functioning of the national financial market as part of the global financial market in the context of growing global capital flows and differ significantly in their size, specialization and financial transactions. These currently include more than 60 cities and territories, while the top ten most active include London, New York, Hong Kong, Singapore, Tokyo, Zurich, Chicago, Shanghai, Seoul, Toronto, where a wide range of assets under management. In terms of the nature and scope of financial services, MFCs can be global, regional or sub-regional, universal or specialized, domestically oriented or offshore. Among them are those that have been operating for several centuries and have appeared in recent decades.
Nevertheless, despite significant differences, they usually have the following basic conditions that ensure their activities: the stability of the national economy and its integration into the world economy; favorable geographical position in terms of specialization of the MFC; the presence of a diversified, competitive and capacious financial market, a developed monetary system and exchange infrastructure that provide favorable conditions for international stock and currency transactions; providing access to foreign financial intermediaries with the participation of international financial institutions; availability of a wide range of financial instruments corresponding to the current stage of development of the global financial market; a stable and predictable regulatory system that operates in accordance with international standards for working in financial markets; provision of conditions for the training of highly qualified personnel for servicing the MFC.
Among the leading financial centers in the context of globalization, London has managed to regain its lost positions in a number of key performance indicators, while New York's leadership has ceased to be unconditional. The London MFC maintains a more flexible nature of regulation, especially for international stock transactions, flexible and differentiated listing systems, incl. regarding inclusion in the lists of global depositary receipts, placement of foreign shares on the London Stock Exchange. Another advantage was the possibility for foreign companies, subject to the established standards, to be included in the FTSE group of indices.
At the same time, American stock markets have become less attractive due to the tightening of American legislation, especially after the adoption in 2002 of the Sarbanes-Oxley Act, which establishes strict financial reporting rules not only for American companies, but for all companies. Ultimately, these actions prompted a number of foreign companies to leave the New York Stock Exchange and move to London and other major Western European markets. This, however, does not mean that New York, which retains its leadership in key performance indicators among world exchanges and developed infrastructure, will not seek to regain its dominant position, especially in the field of innovation in financial markets.
Using cluster and correlation analysis, Z/Yen Group identified three key areas that determine the profile of the financial center in terms of its competitiveness: interaction with other financial centers, providing the necessary conditions for the unhindered movement of transnational capital; diversification as the breadth of a set of financial and industrial services that provide the most favorable business environment for the activities of the MFC; specialization as the degree of concentration on the provision of services in areas such as asset management, investment banking, insurance, wealth management.
According to the Z/Yen Group experts, the combination of these three factors makes it possible to determine the general profile of financial centers and their place in the global financial architecture, classifying them in accordance with the results obtained as global, transnational or local MFCs, at the same time classifying them according to the degree of diversification of the services provided.
The creation of clusters built according to the sectoral specialization of issuers is one of the key factors in maintaining the competitive positions of the leading financial centers. First of all, there are four main areas of specialization that contribute to the attractiveness of the London Stock Exchange and the New York Stock Exchange for listing shares of foreign companies: the mining cluster. Currently, the London Stock Exchange lists the shares of the largest companies in the extraction of non-ferrous and precious metals and their subsequent processing. Investment banks and wealth management funds provide a high level of expertise in stock valuation, which is carried out by a highly professional staff in the field of accounting, consulting and production, and is also supported by lobbying groups, which, as a rule, allows securities to be quoted at a premium; fuel and energy cluster.
Financial centers in other countries are also striving to build their own system of clusters in order to take a leading position in the corporate securities market with a more narrowly defined specialization. Thus, the investment base of Hong Kong, where trading in securities of foreign companies, including derivatives, is developed, the legislation complies with international standards, and is primarily focused on serving the financial sector of the PRC. Singapore, being one of the largest international ports in Southeast Asia and having an offshore trading zone, is expanding its position in the international market for risk management services, insurance, and real estate. As Canada's leading financial center and North America's third-largest regional mining financial services leader, Toronto is rapidly expanding as a hub for mid- and small-cap mining companies.
For regional and local MFCs, there is a growing risk of an overflow of operations with assets to other, more competitive markets. Under these conditions, a fuller use of the opportunities created by globalization, and the limitations at the same time arising from not? risks are becoming one of the most important tasks for regulators in the capital markets. As a result, for many of them it is absolutely necessary to strengthen the international functions of the existing national financial market in order to ensure access to a higher level of competition. The crisis of 2008-2009 had a significant impact on the configuration of world finance, one of the consequences of which was the relative strengthening of the positions of emerging markets, primarily in terms of the accumulation and redistribution of national capital.
After two decades of globalization in the financial sector, as well as the development and implementation of new information and telecommunications technologies, industrialized countries have found themselves at the epicenter of the most serious economic problems. For the first time since the 1950s, the financial services sector of these countries began to show a steady downward trend, while financial centers in Asia continued to grow. In conditions of more dynamic development of the economy, a growing part of the capital in the world, attracted by share issues, falls on Asia and Australia, which is also directly reflected in the results of exchange activities. The capitalization of companies, mainly local ones, is growing especially fast on the stock exchanges of mainland China and Hong Kong. The ratio of the competitive advantages of "old" and "new" financial centers is changing, although, of course, one cannot ignore the possibility of further expansion of the speculative "bubble" in a number of Asian countries, primarily in China, as a result of an excessive influx of liquid assets, an underdeveloped listing system.
One of the reasons for the significant depth of the crisis phenomena in recent years was the contradictory nature of the process of financialization of the economies of the leading countries. At the pre-crisis stage, the expansion of the financial services sector was the result of the economic policy of developed countries in order to provide a favorable business environment for their financial institutions in the context of ongoing changes on the “upper floors” in the international division of labor and the revitalization of offshore centers, as well as the growing demand for resources from corporate finance, expanding support in various forms by governments under pressure from the financial "lobby" of banking and other operations. Subsequently, the decline in activity in the financial industry led to a contraction in the financial and related industries, showing a high elasticity of the labor market from the production of financial services. At the same time, the expansion of the stock market of developing countries continued.
In the face of intensified competition, one of the ways to strengthen international financial centers was the introduction of financial innovations, as well as the introduction of special institutions into the infrastructure of the centers for the development and release of new products. The process of asset securitization, which began in the 90s, has been further developed in the modern period as a result of the entry into the market of such products as bonds secured by debt obligations, mortgage-backed securities, asset-backed securities, and a number of others. creation of new types of OTC derivatives in addition to the previously established groups of financial derivatives for stock indices and interest rates, as well as those based on the development of the bond market.
On the other hand, the basic model of servicing the leading economic markets by financial centers is largely maintained after the financial crisis of 2008-2009. In particular, London, New York, Hong Kong and Singapore, which form a significant share of global financial services, especially in the banking and investment sector, continue to largely hold their positions in global finance. Until now, these centers have significant advantages from the concentration of capital and the organization of urban agglomerations, which provide greater market liquidity, a developed and stable market infrastructure, a system of regulation and supervision, and the stability of transnational communications. More liquid and mature markets and well-established regulatory systems are usually key factors for market participants, especially during and after a crisis.
For new, rapidly developing international financial centers, the creation of financial markets with such basic parameters in the near future becomes one of the most difficult tasks due to the difficulties of restructuring existing global financial ties with the corporate sector and government bodies of other countries, as well as due to the need for large costs. to be included in this system. Thus, the process of forming a multipolar financial architecture is at a transitional stage and is not clearly defined.
The conditions for the operation of international financial centers will be significantly affected by the formation of a “new financial world order”, the main contours of which are already being formed. According to the concept promoted by the IMF and the G20, they include: the development of an international system of regulation and supervision, the strengthening of the role of individual supranational organizations - the G20, the Financial Stability Forum, the IMF, the Bank for International Settlements, combined with the tightening of existing rules and standards within national systems; modernization of the modern architecture of the monetary system; the creation of transnational financial conglomerates and a number of others. They should provide the necessary conditions for the development of the MFC as a multi-tiered financial market of a greater degree of complexity, capable of attracting and moving significant volumes of domestic and foreign investments and providing domestic and foreign businesses with a wide range of world-class financial services.
It should also be noted that the possibilities for securing better competitive positions by financial centers in the future will also depend on the degree of adaptability of financial regulation systems to ongoing changes in banking systems and the stock market. Crisis of 2008-2009 revealed serious shortcomings in the American and British systems of financial regulation, in connection with which the Federal Reserve System and the Financial Services Administration were forced to urgently reformulate the basic concepts of financial regulation and propose measures for their implementation through the use of administrative levers and the introduction of broad legislative initiatives for this purpose . At the same time, a number of countries with large emerging markets - China, India, Brazil, managed to limit the impact of financial shocks to a greater extent and earlier Western countries to apply macroprudential instruments, incl. regarding the capital adequacy of financial institutions.
However, since in terms of quality characteristics the financial centers of this group of countries still have a gap with the United States and Western European countries, a large share of participation of state-owned banks, an orientation towards the domestic financial market with an underdeveloped infrastructure, a weak role of self-regulatory organizations, and a lack of the necessary number of qualified specialists in international operations and others, there are fears that they may hinder initiatives to create a new "international regulatory environment", thereby contributing to unfair competition based on less stringent rules for the operation of institutions or "regulatory dumping". From this point of view, the United States, Western Europe and Japan, which have a more developed financial system based on broad and comprehensive legislation, will be interested in developing closer trilateral cooperation in order to maintain the traditionally leading positions of their international financial centers.
At the same time, the further development of the US and European IFCs will be largely determined by the trends in the movement of financial resources between them and countries with emerging markets, primarily the BRICS, which are actively using the capabilities of these centers to finance their economic growth. Until the last financial crisis, the London Stock Exchange, the New York Stock Exchange and the NASDAQ were the main markets for these countries. This is evidenced by the largest placements of recent years: the double listing of VTB in the amount of $ 8 billion in London and Moscow in 2007, the IPO of Fresnillo Mexico in the USA in the amount of $ 1.8 billion in 2008 and a number of others. Although the crisis of 2008 temporarily interrupted this trend, there was a recovery in the activity of large-scale operations on the stock exchanges, incl. dual listing of Banco Santander Brazil in New York and Sao Paulo in the amount of $7.5 billion in 2009, the IPO of Essar India in the amount of $1.9 billion in London in 2010, etc.
Sustainable economic growth in most countries provides conditions for increasing demand from local companies for foreign investment resources, both to strengthen their domestic economic potential and to move into foreign markets. One such example is Petrobraz Brazil's secondary offering of shares on the New York Stock Exchange in 2010, where international sales of depository receipts to foreign investors amounted to about $8 billion, or about 12% of the total issuance. As expected, the scale of this demand will continue to expand in the future due to the need to finance a number of large-scale projects - India, Brazil, privatization of companies - Russia, major international mergers and acquisitions, the formation of a segmented financial market. These processes are taking place against the backdrop of a significant slowdown in issuing activity in developed countries, which indicates an increase in the share of capital attracted in international markets from this group of countries.
Chapter 2. Analysis of the functioning of the international securities market
1 The modern securities market and its promising areas
The modern securities market is represented by a wide range of its participants, instruments and operations that can be used and carried out on it, respectively. Almost nowhere you can find as many opportunities to win / lose (make a profit / loss) as in the securities market. And each of its participants has everything for this. For example, an investor has various instruments (different securities: stocks, bonds, warrants, options, etc.) to invest his money in securities with different levels of risk and, accordingly, with different returns. It must be remembered that the greater the yield, the greater the risks - this is one of the main rules in our life and is especially relevant in the modern securities market.
The modern securities market is a market in which all national securities markets are concentrated and interconnected. On it, investors and issuers meet in order to obtain a certain benefit (profit and capital, respectively). But at the present stage, there are intermediaries between them, as well as other participants in the modern market (brokers, dealers, banks, insurance companies, depositories, etc.), each of which performs a certain role and functions in the market and allows you to make the process of buying / selling securities is more automated, simple, reliable and allows the investor to deal only with the process of making an investment decision, and the issuer about how to further develop his own, for example, a corporation and where to invest the capital received from securities.
It is interesting that, in general, the underdevelopment of the securities market in various developing countries does not guarantee that the global economic crisis will not affect them or that the consequences will be more favorable than in countries where the securities market is very well developed, because. the country itself, whether it wants it or not, is in the process of constant integration with other countries, economies, and all this as a whole makes up the modern economy and the modern securities market. Countries are interconnected, including by securities markets, and therefore they transfer their internal problems to members of various economic communities.
In recent years, this is clearly seen in the example of the countries of the European Union, namely Greece, Spain, Italy and Portugal (2010-2012), when internal problems with the external debt of these countries led to a drop in the ratings of countries (the ratings of all national structures: banks, companies, etc.), which, in turn, led to a significant decrease in the price of securities of these countries. But due to the fact that these countries are part of the European Union, the reputation of all countries included in it also suffered and stocks, bonds and other securities began to decrease in value. It is very dangerous when government bonds are downgraded, which allows us to talk about receiving less investment in the country, and this, in turn, will lead to an increasingly worse economic situation in the country if nothing is done to prevent a recession.
Thus, the modern securities market is characterized by an increasing process of globalization and integration, especially today, when there is an increasing integration of national economies and countries in general.
There are prospects for the securities market or, in other words, the stock market, but for development it is necessary to solve the problems of the stock market, which will allow it to develop. First of all, this is the emergence of new tools, i.e. new types of securities, which provide investors and issuers with completely different opportunities and allow them to attract large resources.
New instruments of the stock market are many types of derivative securities, varieties and types of new securities are being created. New trading systems are trading systems that are based on the interaction of different means of communication and computerization, which allows trading around the world online, one on one and without any contracts between sellers and buyers.
The new market infrastructure means new information systems, such as clearing, settlement, and depository services for the stock market. Another perspective for the development of the stock market is securitization - this is when funds are transferred from a standard form to securities or a tendency to transfer a certain form of a security to another form of securities that are more accessible and more used by investors.
Thus, the outlook for the securities market does not mean that other markets, such as the capital market, will not lead to their disappearance. Of course, one might think so, because. on the one hand, the stock market takes part of the capital, but on the other hand, it allows you to move these capitals through the mechanism of buying / selling securities to other markets, which contributes to the development of these markets. Those. prospects for the development of this market, as well as other markets, exist all the time and will never end, only if the markets themselves, including the securities market, disappear.
Another prospect for the development of the securities market is its computerization, but not in the literal sense, because. it has already happened, but by increasing the speed of transactions, obtaining information, improving the safety of information, as well as improving the mechanisms for making transactions and developing types of securities.
2 Dynamics of the international securities market
A stock index is an indicator of the state and dynamics of the securities market. By comparing the current value of the index with its previous values, one can evaluate the behavior of the market, its reaction to certain changes in the macroeconomic situation, various corporate events (mergers, acquisitions, stock splits, resignations and appointments of leading managers), speculative processes.
Depending on what securities make up the sample used in the calculation of the index, it can characterize the market as a whole, the market for a certain class of securities (government bonds, corporate bonds, shares, etc.), the sectoral market (securities of companies of one industries: telecommunications, transport, insurance, Internet sector, etc.). Comparison of the dynamics of various indices can show which sectors of the economy are developing the fastest. The index may represent the national stock market as a whole or a specific trading floor in this market (for example, a stock exchange index). Stock indices are calculated and published by various organizations, most often information or rating agencies and stock exchanges.
Consider the dynamics of the main stock indices.
In the USA, the Standard & Poor's family of indices is considered. Standard & Poor's Composite 500 Index. The index includes 400 industrial, 20 transport, 40 utility and 40 financial companies. Weighted by market capitalization. Covers approximately 80% of the total capitalization of companies traded on the New York Stock Exchange. The capitalization of companies in the sample ranges from $73 million to $75 billion (Figure 2.1).
Figure 2.1 shows the average movement in the value of the shares of 500 corporations with the largest capitalization. The top 10 companies in the S&P 500 index range from $166 billion to $406 billion. These are companies such as Microsoft, Apple, IBM, Procter and Gamble, General Electric. As can be seen from Figure 2.1, the peak value of the shares of 500 corporations occurred in November 2014 and amounted to $ 2,000 billion. & Poor's 400 Index (S & P Midcap) is similar to the S & P 500, but covers 400 industrial companies, the capitalization of which varies from 85 million to $6.8 billion. The Standard & Poor's 100 is similar to the S&P 500, but covers only 100 stocks that have option contracts on the Chicago Board Options Exchange. "OEX" is the name of an option on this index, which is one of the most popular and traded options.
A price-weighted index as opposed to a capitalization-weighted index. Some believe that this index gives a better indication of the performance of an investment because individual stocks do not outperform in it, and most individual investors do not build their portfolio weighted by market capitalization. (until they buy index funds).
In the UK, the FTSE 30 Share Index is considered, the Financial Times Industrial Ordinary Share Index first began to be published in 1935. and covers the shares of 30 industrial and trading companies. It is calculated as a geometric average obtained by multiplying the prices of 30 stocks from the sample and then extracting the root of the 30th degree from the product (Figure 2.2).
100 is the most common index in the UK, commonly known as "footsie" (Footsie 100). It is a weighted arithmetic index calculated on the basis of the 100 largest UK companies by market capitalization on a per-minute basis. Footsy components account for about 70% of the total capitalization of the UK stock market.
It began to be calculated on January 3, 1984 from the level of 1000 points. Reached its all-time high of 6950.6 on December 30, 1999. After a dramatic drop during the 2007-2010 financial crisis below 3500.0 in March 2009, the index largely recovered to a peak of 6091.33 on February 8, 2011 , which was the highest value since mid-2008. On the morning of September 23, 2011, the index fell below 5000.0. On June 19, 2012, the value was 5,586 points. Mid 250 - An index of mid-cap stocks that account for approximately 20% of the UK market. These are the next 250 companies behind the 100 largest in the FT-SE 100. Calculated since December 1985.
Japan's main stock index is the Nikkei (short for "nihon keizai" - "nihon" in Japanese for Japan, and "keizai" for "finance, economics") (Figure 2.3). His sample includes 225 stocks traded on the Tokyo Stock Exchange. This is the arithmetic mean unweighted index, calculated using the same methodology as the DJIA. Published since 1950.
Like the Dow Jones Industrial Average, the Nikkei is a price-weighted index. This means that those companies whose shares are most valued on the stock exchange, the index gives more importance. The list of companies included in the index is revised annually and includes Japanese companies from such business areas as the pharmaceutical industry, financial institutions, etc. As can be seen from Figure 2.3, the index peaked in April 2007.
The second fairly popular index is Topix, calculated since 1968. for all shares traded on the 1st section of the TFB. The JPN index is a modified price-weighted index that reflects the performance of 210 common stocks that are actively traded on the Tokyo Stock Exchange and represents a broad cross-section of all sectors of the Japanese economy. The JPN is closely related to, but not identical to, the Nikkei.
Canada. The most famous index of the Toronto Stock Exchange TSE 300, weighted by capitalization and covering 14 sectors of the economy.
Mexico. The IPC index is calculated on the Mexican Stock Exchange. It is a capitalization-weighted index covering the 35 largest Mexican companies. The composition of the sample for calculation is adjusted every 2 months.
Hong Kong. The most well-known index is the market capitalization-weighted Hang Seng Index of the Hong Kong Stock Exchange, calculated on the shares of 33 companies, the capitalization of which represents about 70% of the total market capitalization. The index includes companies from 4 sectors: trade and industry, finance, utilities, land ownership.
Chapter 3. Problems of Belarus' entry into the world securities market
An analysis of the structure of the community of issuers of the international Eurobond market shows that, in terms of the place of registration of the geographical distribution, developed countries account for about 80% of the volume of issues. Nevertheless, for potential participants in the Belarusian financial market, the experience of countries with a similar state of development of economic relations, i.e. developing countries. Despite the uniqueness of the initial conditions of each country, according to the author, it is the cumulative analysis of the world experience of the functioning of the Eurobond market, taking into account the specifics of participation in it of this group of countries, that will allow us to assess the potential effectiveness of this borrowing tool for the Republic of Belarus and determine the most promising directions for using the attracted resources.
The reasons hindering the development of the corporate bond market include:
For investors:
a high rate of taxation of income (40 percent) received by legal entities from operations with securities;
unequal competitive opportunities for banks and business entities when borrowing funds from the population. In accordance with the law, income received by individuals from operations with securities, including interest income on bonds, is taxed at the rates of taxation of the total annual income. At the same time, interest on deposits of individuals in banks is not taxed;
For issuers:
the presence of additional expenses of the issuer (as opposed to obtaining bank loans) associated with its costs for the payment of income (interest) on bonds, their registration, placement, circulation and redemption (up to 5 percent of the loan amount);
To date, the solution of the issue of the possibility of attracting investments by organizations in foreign stock markets by issuing Eurobonds and depositary receipts for shares is one of the priority tasks.
However, the main requirement for an issuer's admission to foreign investment resources is the availability of at least 25 percent of the issuer's shares in free circulation.
In a situation where 60 percent of the issued shares (in value terms) are owned by the Republic of Belarus or its administrative-territorial units, the entry of organizations into foreign financial markets is possible after the state creates conditions that ensure that at least 25 percent of the issuers' shares are in free circulation.
In addition, the issues of transition of organizations to international financial reporting standards, disclosure of information in accordance with international standards, formation of a credit history and obtaining a corporate rating of issuers are also subject to resolution.
Activation of the corporate bond market is one of the ways to form the credit history of issuing organizations, which is a necessary prerequisite for them to obtain an international credit rating and further attract credit resources in foreign financial markets.
Derivative securities (futures, options), which are based on underlying assets (currency values, equity, debt securities, other financial instruments or rights in relation to them), are practically not used due to the lack of a liquid underlying asset.
The market for other securities (municipal bonds, warehouse receipts, bills of lading), despite the existing regulatory framework, is not developing due to the lack of interest among business entities in the use of such instruments.
Along with the continuation of work on the activation of already operating segments of the securities market, it is necessary to pay sufficient attention to the creation of markets for derivative securities, securitization instruments for financial assets and mortgage-backed securities, exchange-traded bonds, as well as other instruments of the securities market.
The main goals of entering the international Eurobond market of Belarus:
Increasing the investment attractiveness of the borrower and strengthening investor confidence is one of the most important goals when countries with economies in transition place Eurobonds on the global financial market. Thus, the issuance of Eurobonds by these countries is often part of a government strategy to attract foreign capital to the national economy and develop the national stock market. In this case, the issued sovereign Eurobonds are designed to open access for national corporate borrowers to the global loan capital market.
increasing the prestige of the borrower;
satisfaction of domestic demand for foreign exchange resources:
Among the options may be the issue of Eurobonds by one of the largest banks in the country, which has a high credit rating, with the subsequent placement of the funds raised among smaller national financial institutions. The advantage of Eurobonds as a source of financing domestic demand for foreign currency is that such attraction of funds is more long-term and less limited.
refinancing and restructuring of existing debt:
The rate of increase in external borrowing by issuers of countries with economies in transition in most cases exceeds the rate of growth in profits or national income. As a result, the issuer is faced with a situation where it is forced to make new borrowings to ensure the timely repayment of previously issued obligations.
On the eve of the crisis, the Belarusian Investment Forum was held, where the country's companies presented their assets for a public stock assessment. The main reference point at the moment is the issue and placement of Eurobonds, which is also an institution for raising borrowed funds.
In addition, privatization will serve as a qualitative start for the formation of the Belarusian stock market. Privatization should increase the popularity of the investment portfolio in the country and serve as an incentive to attract foreign direct investment.
At the current stage, Belarus needs investment resources. At the same time, the volumes of accumulation of foreign direct investment are still low, they have not played a decisive role in the development of the Belarusian economy, but increase the interest of a potential investor in Belarus due to the presence of a fairly large number of attractive assets.
Belarus' plans to enter the Russian and then the European securities markets are connected with the intention to finance the main part of the budget deficit from external sources. The possibility and expediency of obtaining a country credit rating for Belarus has been discussed in the government since 2001. Since 2003 Belarus has been taking steps to obtain an investment rating. This assumes that the government of Belarus will select on a competitive basis a foreign investment bank that will act as a financial advisor on attracting a country credit rating and placing Belarusian Eurobonds. The financial consultant will be required to assist in the selection of a rating agency and the attraction of a rating. In addition, a financial consultant will have certain advantages when placing Belarusian Eurobonds.
The success should be facilitated by the fact that the level of Belarus' external debt is extremely low and the country's debt obligations are repeatedly covered by available collateral.
According to specialists from the Ministry of Finance and the National Bank, Belarus will be able to receive a B+ country credit rating. This corresponds to the accepted international practice, when the first credit rating is of low value, then it is increased depending on the efficiency of the state. The presence of the rating will make it possible to gradually reduce the price of credit resources attracted in foreign markets. After receiving the rating, Belarus will be able to issue Eurobonds.
In the future, Belarus is invited to participate in the placement of Eurobonds. It is more expedient to debut with the issue of Eurobonds, given its great advantage in terms of information disclosure, investor interest and the likelihood of a successful placement. The ultimate goal of any issuer should be to issue global bonds and place them on the US market: in exchange for higher requirements, you can get more opportunities.
The Council of Ministers of Belarus has approved a draft agreement with a foreign legal consultant on the issue of Eurobonds and a letter on the appointment of four foreign banks as organizers of the placement of securities. This was done by Resolution of the Council of Ministers of Belarus No. 420 dated March 24, 2010 "On negotiating draft agreements on the issue of Eurobonds of the Republic of Belarus and a letter on their placement and signing these documents."
A draft agreement was approved between the government of the Republic of Belarus represented by the Ministry of Finance and the American law firm WHITE & CASE LLC on rendering services of a legal consultant in English law to Belarus in connection with the issue of Eurobonds of the Republic of Belarus.
In addition, a draft letter was approved between the Ministry of Finance of the Republic of Belarus and the banks BNP Paribas (London branch), Deutsche Bank AG (London branch), The Royal Bank of Scotland plc and Sberbank of the Russian Federation on their appointment as organizers of the placement of Eurobonds of the Republic of Belarus as basis for negotiations. On the Belarusian side, this document was signed on March 25, 2010.
The need to develop a model for the entry of the Republic of Belarus into the MRCB is determined, on the one hand, by the needs of Belarus to attract external long-term financial resources for the restructuring and modernization of existing industries, mainly state-owned, on the other hand, by the need to work out the interaction of all participants in the mechanism in order to increase its efficiency.
The main tasks for the Republic of Belarus to enter the international securities market are:
development, approval and implementation of a mechanism for the selection and approval of investment projects;
preparation and creation of a database of investment projects;
the creation of an interdepartmental body that controls the dissemination of data, as well as conducting operational correspondence with international investors.
The most important stage in the process of preparing for the placement of Eurobonds is the determination of the key parameters of the issue. The success of an issue often largely depends on the compliance of its parameters with the opinion of investors about the needs of the issuer and the ability to service the attracted debt. For example, if the declared volume of the issue exceeds the needs of the issuer. This will most likely be regarded as poor preparedness of the initiator of raising funds and will negatively affect the cost of borrowing.
In most cases, the general manager of the issue is responsible for calculating the needs and assessing the possibility of placing Eurobonds at acceptable rates. However, the issuer himself must clearly understand the objectives of the issue and calculate the conditions corresponding to them. At the current stage, the priority goal for Belarus is to create a precedent for issuing Eurobonds and to determine the % rate at which international investors will evaluate sovereign securities. The debut issue, in fact, can be recognized as a marketing ploy aimed at studying the international borrowing market and shaping the image of a conscientious borrower.
The hierarchy of goals determines the expediency of the first issue of Eurobonds on terms that best correspond to the concept of a low-risk investment from the point of view of investors. This dictates the following release parameters requirements:
the use of the funds received should be directed to the direct creation of income;
volume of issue and term of circulation of Eurobonds;
loan currency, bonds should be as liquid as possible.
The first requirement for the directions of use of attracted resources arises from the contradiction between the goals set for investors of funds in securities and the peculiarities of the state social policy of the Republic of Belarus. The prevailing goals of investors in the conditions prevailing at the MRCB are to earn income and diversify their investments. The basis for making a profit is the financing of commercial projects that can generate a cash flow that covers the current interest payments for attracted resources and guarantees the timely repayment of the principal debt.
Currently, projects in the areas of oil refining, woodworking industry and production of potash fertilizers are also attractive. However, one should take into account the events related to the supply of hydrocarbons to Belarus. These included episodic reductions in supply volumes and price increases, which led to significant reductions in refinery profits. Despite the short duration of such events, if they occurred after the issuance of Eurobonds for the implementation of modernization projects, the value of the bonds would have significantly decreased.
There is no definition of a Eurobond in the legislation of the Republic of Belarus, so let's turn to the general provisions on bonds. According to Article 5 of the Law of the Republic of Belarus dated March 12, 1992 No. 1512-XII “On Securities and Stock Exchanges”, a bond is a security confirming the obligation of the issuer to reimburse the owner of the security for its nominal value within the prescribed period with the payment of a fixed percentage (unless otherwise stipulated by the terms of issue).
Bonds are issued in series, consisting of homogeneous securities with equal par value and the same terms of issue and redemption, secured by property with the consent of the owner or a body authorized by him.
May 2010, Decree of the President of the Republic of Belarus No. 245 “On the issue of government bonds of the Republic of Belarus” (hereinafter - Decree No. 245) came into force. It is dedicated to the so-called Eurobonds, the issue of which, according to Decree No. 245 in 2010-2011. will be carried out by the Council of Ministers of the Republic of Belarus in the amount of up to 2 billion US dollars with a circulation period of at least five years and their placement outside the territory of the Republic of Belarus.
In July 2010, the Republic of Belarus placed Eurobonds on the world market in the amount of $ 600 million for a period of 5 years and maturity in 2015, the yield on which amounted to 8.75%. Interest on the bonds will be paid on a semi-annual basis on February 3 and August 3 of each year at a rate of 8.75% per annum. The experiment was a success, and already in August additional placements of Eurobonds in the amount of $400 million were received. The funds were credited to the account of the Ministry of Finance on August 3, 2010. BNP Paribas, Deutsche Bank, The Royal Bank of Scotland and Sberbank of Russia acted as the lead organizers of the Eurobond issue of the Republic of Belarus. The first interest payment was made on February 3, 2011. The bonds mature on August 3, 2015.
In 2011 Belarus plans to issue Eurobonds worth $1 billion.
January 2011, Eurobonds were placed in the amount of $800 million. Securities were placed at a fixed rate of 8.95%. Investors from the USA - 20%, Great Britain - 30%, Russia - 14%, as well as from other countries participated in the placement and purchased securities.
On February 1, 2013, Belarus paid investors the fifth coupon income on the first issue of Eurobonds in the amount of USD 43.75 million in accordance with the schedule. Belarus paid investors coupon income on two issues of Eurobonds for a total of USD361.95 million.
The next coupon yield payments on Eurobonds of Belarus will take place: July 26, 2013 - the fifth coupon yield on the second issue of securities (USD 35.8 million), August 3, 2013 - the sixth coupon yield on the first issue of Eurobonds (USD 43.75 million .).
According to Bloomberg data, on January 30, 2013 Belarus Eurobonds of the first issue maturing on August 3, 2015 traded with a yield of 6.334% (purchase) and 6.017% (sale), the second issue maturing on January 26, 2018 - 7.130% (purchase) and 7.001% (sales).
The decrease in yield is due to the growth of market quotations of Belarusian securities and the reduction of their duration (term to maturity of Eurobonds). Apparently, during the new placement of securities, the Belarusian government will be able to raise funds on more favorable terms compared to the previous two issues of sovereign Eurobonds. In particular, the coupon rate on the third issue of Eurobonds, according to our estimates, may be 6.3-7.3% per annum, depending on the length of the money.
Currently, there are two issues of sovereign Eurobonds in circulation: with maturity on August 3, 2015 in the amount of USD 1 billion (coupon rate is 8.75%) and with maturity on January 26, 2018 in the amount of USD 800 million (8. 95%).
Against the backdrop of improving international financial markets, the government of Belarus in 2013 has a real opportunity to half refinance the external public debt and, thereby, reduce the volume of actual payments to the level of 2012 (USD 1.5 billion).
The volume of the issue of securities may amount to about 800 million dollars in 2014. During the new placement of securities, the government may raise funds on more favorable terms compared to the previous two issues of sovereign Eurobonds. According to Bloomberg, on September 1, 2014, Belarusian Eurobonds of the first issue maturing on August 3, 2015 traded with a yield of 6.091% (purchase) and 5.067% (sale), the second issue with maturity on January 26, 2018 - 7.250% (purchase) and 6.901% (sales).
Thus, the use of such a borrowing instrument as Eurobonds for the Republic of Belarus may mean raising medium-term financial resources at a relatively low interest rate and gaining access to the international financial market for future borrowings. In addition, the first issue opened up access to international capital markets for other borrowers in the country.
Conclusion
The development of the modern world securities market, in addition to general economic ones that affect the stock market, also has specific trends. First, the trends in the concentration and centralization of capital have two aspects in relation to the securities market. On the one hand, more and more new participants come to the market, for whom this activity becomes the main one, and on the other hand, there is a process of separation of large, leading market professionals on the basis of both increasing their own capital (capital concentration) and by merging them into more larger structures of the securities market (centralization of capital). As a result, trading systems such as NASDAQ (National Association of Securities Dealers Automated Quotations), SEAQS (Stock Exchange Automated Quotation System) or other market organizers appear on the stock market, as well as several of the most famous platforms for trading securities (stock companies) ( New York Stock Exchange, Tokyo Stock Exchange, London International Stock Exchange, Frankfurt Stock Exchange), which serve most of all transactions in the international securities market. The internationalization of the stock market means that national capital crosses the borders of countries, a world securities market is being formed, in relation to which national markets become secondary. An investor from any country gets the opportunity to invest his free funds in securities that are traded in other countries.
The international securities market is, first of all, the primary market. Therefore, the international securities market is understood as the release of the latter, expressed in the so-called eurocurrencies and carried out by issuers outside the framework of any national regulation of emissions. In a broader sense, the international securities market is considered as a combination of international issues proper and foreign issues, i.e. issuance of securities by foreign issuers on the national market of other countries. Currently, the global securities market includes both the stock market and the bond market. The international bond market can, with a certain degree of conventionality, be represented as a combination of two markets: the market for foreign bonds and the market for international bonds proper - the so-called Eurobond market. Foreign bonds are a type of national bonds. Their specificity is connected only with the fact that the subject-issuer and the subject-investor are located in different countries.
Actually international bonds (eurobonds) are issued by borrowers through international banking consortiums and are denominated in eurocurrencies. The German banks Deutsche Bank and Dresden Bank and the American investment firms Solomon Brothers and Morgan Stanley are the most active in the placement of Eurobonds. Eurobond income is not subject to taxation. Euroshares are less common than Eurobonds, they are publicly traded securities of transnational companies and have the same characteristics, in terms of issue currency and distribution area, as bonds (issued outside national markets).
In general, the world stock market of securities, as well as the world currency market, is one of the most effective and global tools for redistributing funds from one sector of the economy to another. Now in the world market, several trends can be distinguished, regardless of the industry. First of all, there is a decrease in the role of the state even in such areas of the economy as labor migration. The resettlement of people is now almost not slowed down in Europe, this is especially true for qualified personnel.
In addition, the growing interconnection of world market participants forces us to look for new technological solutions to overcome distances, hence the growing informatization of any financial institutions. Now the world securities market is entering a new era in terms of globalization - this applies to trading in Euroshares and Eurobonds and means a possible revision of the entire market and a change in positions on key indices.
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The release of securities into the market is called emission , and the firm or organization that produces them - issuer .
World financial market (securities market) - This is a segment of the global loan capital market, where the issue and purchase and sale of securities and various financial obligations are carried out. Therefore, the MFR is often called the world securities market.
In the primary financial market, bonds, shares, etc. are issued. In the secondary market, there is a centralized or non-centralized (through stock exchanges) purchase and sale of previously issued securities.
World securities market is divided into 2 parts:
1) circulation between countries of shares and bonds of national issuers of different countries (for example, bonds are issued in country A in its national currency and sold in countries B, C, D, etc.);
2) a special issue of securities of foreign issuers for a certain national market (for example, country A allows to open a foreign bond market for foreign individuals and legal entities issued in the currency of this country).
The main instruments of borrowing in the world market are bonds, shares, Euro bills, etc.
Bonds placed by foreign firms in the US are called Yankees, in Japan - samurai, in Spain - matadors, in the UK - bulldogs.
The market for long-term loans exists, as a rule, in the form of a bond market. With a certain degree of conventionality, it can be represented as a combination of two sectors: the foreign bond market and the Eurobond market. A foreign bond is essentially a type of national bond. Their specificity is that the issuer and the investor are located in different countries. There are two main ways to issue foreign bonds (see above).
Eurobond – it's a bond issued by the borrower through the intermediary of the International Banking Consortium and denominated in Eurocurrencies. It is usually issued in a currency other than the currency of the issuing country, and is placed simultaneously in several countries (on the international capital market). The usual maturity of Eurobonds is 10-15 years. Eurobonds have a number of advantages over foreign bonds. They are not subject to national securities regulations, interest on Eurobond coupons is not subject to withholding tax, they provide more opportunities for profit and currency risk avoidance. Eurobond holders do not require special registration. Eurobonds are issued to the bearer, so they have high liquidity.
Bonds have been circulating on the world market since the 1960s; before the shares arrived there, and the value of bonds in international circulation is several times higher than the volume of shares.
The placement of foreign bonds on the national market is carried out by associations of banks, which are called consortia.
International bonds are placed mainly in the form of a market eurobonds- issues of foreign issuers in the markets of developed countries. Most issues of foreign bonds are concentrated in the market of 4 countries: USA, Germany, Japan, Switzerland.
The US foreign bond market is attractive, firstly, because of the large size of loans ($100 million on average), and secondly, because of their long duration (up to 25-30 years).
There are more reliable borrowers on the Eurobond market, so developing countries have limited access to this market. The duration of the issue of Eurobonds is now 5-7 years.
International bonds are issued in different currencies. And since they have different stability, the interest rate, and, consequently, the yield of bonds, mainly depend on the stability of the currency in which the loan is issued.
In addition to Eurobonds, various instruments of loan capital market transactions have become widespread, in particular Euro bills- short-term debt obligations that can be alienated (assigned). Interest on euro bills more accurately reflects the movement of current market rates. Unlike other securities, euro bills can be issued by companies that do not have an official rating, and for any period (usually 3-6 months).
Widespread in the European market are also certificates of deposit- these are written certificates issued by banks on the deposit of funds by depositors, giving them the right to receive a deposit and interest (terms of deposits from a month to several years).
The profound qualitative changes that have taken place over the past decades have led to the creation of a global integrated market for loan capital. This creates, on the one hand, more favorable conditions for obtaining global financial resources, and on the other hand, it significantly increases systemic risks. That is why the importance of international monetary and financial institutions is growing.
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