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ТОП 10 на сайтеПриготовление дезинфицирующих растворов различной концентрации
Техника нижней прямой подачи мяча.
Франко-прусская война (причины и последствия)
Организация работы процедурного кабинета
Смысловое и механическое запоминание, их место и роль в усвоении знаний
Коммуникативные барьеры и пути их преодоления
Обработка изделий медицинского назначения многократного применения
Образцы текста публицистического стиля
Четыре типа изменения баланса
Задачи с ответами для Всероссийской олимпиады по праву
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ЗНАЕТЕ ЛИ ВЫ?
Влияние общества на человека
Приготовление дезинфицирующих растворов различной концентрации
Практические работы по географии для 6 класса
Организация работы процедурного кабинета
Изменения в неживой природе осенью
Уборка процедурного кабинета
Сольфеджио. Все правила по сольфеджио
Балочные системы. Определение реакций опор и моментов защемления
Assess the correctness of Posco’s decision to slash domestic prices.
What evidence is there in the article that Posco has made a right decision?
Evaluate the ripple effect of China’s cutting prices on other markets.
Discuss the reasons for price wars.
Outline all possible reasons for a successful competition.
Suggest, with reasons, how Posco might increase its net profit further.
How would you define prices?
- as a true reflection of value;
- costs plus mark-up;
- whatever the market will stand.
What are the main factors influencing the price of products and services you offer?
VOCABULARY REVISION – UNIT 4
Продвижение товара на рынке; пункт, место продажи товаров; «прямой маркетинг»; рекламный щит; продажа по бросовым ценам; скидка; прейскурантная цена; процесс установления цен; узнаваемость данного типа товаров потребителями; внедрение нового товара на рынке; потребительские товары повседневного спроса; отозвать товар с рынка; компании, быстро реагирующие на потребности рынка; доля рынка; сегментация рынка; клиентура; сбыт; конечный потребитель; оптовик; розничный торговец; конкурентные преимущества; конкурентоспособность; пункты продажи товаров в розницу; товар, товары ; услуги; марка, символ товара или услуги; товар или бизнес, который дает непрерывный приток наличных денег; сбивать цены; ценовая война; рекламное агентство; отправка почтой рекламных объявлений и образцов товаров.
AND STOCK EXCHANGES
financial instruments and stock exchanges
SECTION 1 RAISING FINANCE
Why does a company issue stock? Why would the founders share the profits with thousands of people when they could keep profits to themselves? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods fit under the umbrella of debt financing. On the other hand, issuing stock is called equity financing. Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way. All that the shareholders get in return for their money is the hope that the shares will some day be worth more.
When companies raise finance by selling shares they make share issues, share flotations, or share offerings. The first sale of stock, which is issued by the private company itself, is called the initial public offering (IPO), or flotation. Company shares are listed or quoted on the stock market.
Companies making share issues and listed for the first time are floated on the stock market.
It is important to understand the distinction between a company financing through debt and financing through equity. When you buy a debt investment such as a bond, you are guaranteed the return of your money (the principal) along with promised interest payments. This isn't the case with an equity investment. By becoming an owner, you assume the risk of the company not being successful. Just as a small business owner isn't guaranteed a return, neither is a shareholder. As an owner your claim on assets is lesser than that of creditors. This means that if a company goes bankrupt and liquidates, a shareholder doesn't get any money until the banks and bondholders have been paid out. Shareholders earn a lot if a company is successful, but they also stand to lose their entire investment if the company isn't successful.
It must be emphasized that there are no guarantees when it comes to individual stocks. Some companies pay out dividends, but many others do not. And there is no obligation to pay out dividends even for those firms that have traditionally given them. Without dividends an investor can make money on a stock only through its appreciation in the open market. On the downside, any stock may go bankrupt, in which case your investment is worth nothing.
Although risk might sound all negative, there is also a bright side. Taking-on greater risk demands a greater return on your investment. This is the reason why stocks have historically outperformed other investments such as bonds or savings accounts. Over the long term, an investment in stocks has historically had an average return of around 10%-12%.
There are two main types of shares (stocks): ordinary shares (common stock, equities) and preference shares (preferred stock).
When people talk about shares in general they are most likely referring to ordinary shares (common stock). In fact, the majority of stock issued is in this form. Ordinary shares represent ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per share to elect the board members, who oversee the major decisions made by management.
Over the long term, common stock, by means of capital growth, yields higher returns than almost every other investment. This higher return comes at a cost since common stocks entail the most risk. If a company goes bankrupt and liquidates, the common shareholders will not receive money until the creditors, bondholders, and preferred shareholders are paid.
Preference shares represent some degree of ownership in a company but usually don't come with the same voting rights. (This may vary depending on the company.) With preferred shares investors are usually guaranteed a fixed dividend forever. This is different than common stock, which has variable dividends that are never guaranteed. Another advantage is that in the event of liquidation preferred shareholders are paid off before the common shareholder (but still after debt holders).
Some people consider preferred stock to be more like debt than equity. A good way to think of these kinds of shares is to see them as being in between bonds and common shares.
Blue chip shares, blue chip stocks, or blue chips are the safest share investments in leading companies.
Companies looking for more finance may make a rights issue by offering new shares to existing shareholders at a discount. Rights issues are referred to informally by commentators as cash calls.
Buying warrants gives the right to buy a certain number of a company’s shares for a given price at a later date. Warrants are similar to rights issues except that holders usually have longer in which to exercise their right to buy shares.
1) In what way do companies raise finance?
2) Which way is more advantageous for the company and why?
3) What is IPO?
4) What is the difference between financing through debt and financing through equity?
5) Why have stocks historically outperformed other investments such as bonds and
6) What are the two main types of shares?
7) What is the difference between preference shares and ordinary ones?
8) What are blue chips? Give examples.
Businesses large and small need a capital market in which they can raise finance at the lowest possible cost.
IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company.
IKEA, despite an estimated annual turnover of $2.5 billion, is still private and is not quoted on any stock market.
If you buy common stocks, you share directly in the success or failure of the company. If the company grows or realizes a profit, your income from the stock may increase, or the share price may climb. On the other hand, if the company goes bankrupt, you could lose your entire investment.
Preferred stocks reduce your risk — but also limit potential reward. The dividends paid on preferred stocks are fixed and guaranteed. You may even get some of your investment back if the company goes bankrupt. However, if the company grows or realizes a profit, your dividends stay the same and the share price increases more slowly than shares of the company’s common stock.
As Britain recovers from recession, companies will seek to raise finance through share issues. In the coming months, they will publish glossy prospectuses that celebrate their track records and invite people to part with their capital.
Under one scheme being considered, the Post Office would be floated (have its shares sold) on the stock market. This would rise up to $5billion for the government. Ministers are convinced that a flotation would be popular.
TEXTS TO TRANSLATE:
50. Stocks in trade
NOT so long ago, stockmarkets were derided by critics from communist countries as emblems of capitalism's greed and instability. Now, ten years after the Berlin Wall came down, it is hard to find a country without its own bourse. In Poland, the Warsaw Stock Exchange even occupies the former headquarters of the Communist Party. Despite China's commitment to state control of its economy, it has two stock exchanges, even without counting a third that it inherited from Hong Kong. The number of developing countries with stockmarkets has doubled during the 1990s . Why is everyone betting on the markets?
Part of the answer is that capital markets have proved remarkably efficient at bringing savers and borrowers together. Capital is just another word for stored wealth and resources, which can take many forms. And markets, as basic economics shows, are the least bad way to set prices and to allocate scarce resources.
The key difference between capital markets and financial intermediaries, such as banks or life insurers, is that capital markets cut out middlemen. Where banks and institutions stand between savers and investors, directing the flow of resources, capital markets bring the two parties face to face.
The two main types of capital markets are equity markets, for trading company shares (or equities), and bond markets, for trading the debt of companies and governments. Both perform two crucial functions in the economy. They move resources across space and time, from where they are in surplus to where they are needed most. And they produce valuable information, through the prices they set, that firms, households, and governments use to manage resources better.
Today's financial markets have come a long way from their humble origins. Securities that looked much like modern shares were issued as early as the late Middle Ages in Italian city states. Government bonds with publicly quoted prices date at least as far back as long-term Venetian loans called prestiti, in the 13th century. The New York Stock Exchange started under a buttonwood tree in 1792 with just two equities and three government bonds. By 1998, the nyse's average daily turnover—the value of traded shares—had reached $29 billion. In many rich countries, stockmarket capitalisation, the market value of all listed companies, now rivals or exceeds the size of the domestic economy .
Modern capital markets can be real or virtual. Traditional financial exchanges had a trading floor on which members would gather to buy and sell securities. Floor traders have become icons of modern finance. Yet today the nyse is one of the few examples left of an exchange with a floor. Increasingly, exchanges' only address is in cyberspace, with traders linked by a computer network. The most successful example of such screen-based exchanges is America's Nasdaq. The Tokyo Stock Exchange recently replaced its trading floor with a computer.
In the past, stock exchanges were almost always owned mutually by their members, but now several of the largest plan to issue shares to the public, following the example of Australia's stock exchange, which is now quoted on its own market. And there are different trading mechanisms. Dealer exchanges, such as Nasdaq, rely on market-makers to match buy and sell orders, while auction markets such as the Frankfurt exchange match such trades electronically. The nyse is a hybrid of the two. The trading method chosen can affect liquidity, a measure of how fast securities can be sold and how much such sales affect prices.
Most capital-market trading takes place between one investor and another. This is known as the secondary market, since it does not directly involve the company or government that issued the security. New shares and bonds, however, are born in what is called the primary market, where the money raised flows directly into the coffers of the issuers. The primary market includes initial public offerings (IPOs) of shares in the stockmarket as well as new debt issues in the bond market.
These shares and bonds are in essence only the receipts that savers get for lending money to, or investing in, a firm or a government. A bond, for example, is a loan that can be traded between investors. A government might issue a bond because it spends more than it receives in tax revenues, and needs to borrow the difference. Bonds are often called fixed-income securities because they give the investor a regular stream of interest payments, called coupons.
A bond is an agreement to repay an amount of principal at a future date, along with a schedule of interest payments over a period of time, usually several years. American Treasury bonds are a well-known example. An investor today who buys a newly issued $10,000 face-value, зо-year Treasury bond with a 6% coupon will receive 6% interest per year (or $600) until 2029, when he will also get back his $10,000 principal.
The market price of a bond will vary over time in response to several factors: expected inflation, interest rates on competing investments and the creditworthiness of the borrower. The less worried investors are that inflation will erode the value of both interest and principal, the more they will pay for a bond. Bond prices are thus a good reflection of investors' expectations of future inflation. When interest rates offered on new investments rise, the fixed payments of older bonds become less attractive; so investors will bid the prices of these bonds down.
One way of summarising a bond's value is its yield. This is a measure of the return a bondholder receives on his investment, stated as a percentage of the bond's market price. As a bond's price falls, investors can purchase its stream of interest payments for less. Likewise, when that bond's price rises, investors pay more dearly for its cashflow. This gives rise to one apparent paradox about bonds: the cheaper they are, the more they "yield".
In contrast to bonds, shares are little slices of ownership in private firms. As owners, shareholders elect a board of directors and vote on company business. They are also entitled to the firm's profits— the income that remains after payments for wages, materials, and any interest on the company's debt. This is one way to see that shares generally carry more risk than bonds: bondholders have a higher legal claim, or seniority, on the cashflows of a business than do shareholders. If a firm's business declines, bondholders will be paid first, and shareholders last, if at all. But if business booms, shareholders will do better.
For share valuation, one commonly cited measure is the price to earnings, or p/e ratio. The p/e ratio is the market price of shares divided by the firm's profits. P/e ratios are to shares what yields are to bonds; in fact, the inverse of the p/e ratio measures a firm's profits as a percentage of the market price of its shares, or earnings yield.
From the savers' perspective, bonds appear safer than shares. From the issuers' perspective, things look rather different. For a company issuing securities to fund its growth, shares are the least risky choice. Shareholders, unlike bondholders, receive no legal promise to be repaid in cash at a certain time. Shareholders can exchange their shares in the stockmarket at the market price, but the firm promises them no particular return.
For firms, as for people, taking on debt can be risky. If they are unable to meet interest payments, bankruptcy may ensue. So, in general, the more financially sound a company is, the more investors will be willing to pay for its debt. But it is costly and time-consuming for individuals to gather such credit information. Ratings agencies, such as Moody's and Standard & Poor's, reduce this cost by assessing companies' financial condition and publishing their conclusions. Debtor companies also face bond covenants restricting their activities to ensure that they can continue to service their debts.
For years, businessmen believed that having the right mix of debt and equity could make their company more valuable. But in 1958 Franco Modigliani and Merton Miller, two American economists, showed that the value of a firm should be unaffected by whether it is financed using all debt, all equity, or a mix of the two. What really matters is the value of the underlying business, not the details of its financing. But this theory, for which they were later awarded the Nobel prize in economics, relies on the crucial assumption that capital markets operate "perfectly": ie, it ignores such real-world snags as tax, and differing costs of borrowing for firms and individuals.
auction market – аукционный рынок ценных бумаг: торговля ценными бумагами с помощью различных методов аукциона (торга)
primary market – первичный рынок: здесь: рынок новых ценных бумаг: рынок организации займов и получения заемщиком соответствующих сумм, в отличие от вторичной торговли ценными бумагами
secondary market – вторичный рынок: рынок, на котором уже существующие кредиты или уже эмитированные ценные бумаги и другие финансовые инструменты перепродаются между инвесторами напрямую или через профессиональных посредников
financial intermediary - финансовый посредник: финансовое учреждение, которое выступает посредником между конечным заемщиком и источником финансовых ресурсов
gyrate – резко колебаться (о конъюнктуре или показателях)
coupon – купон: здесь: доход (процентная ставка) по ценной бумаге
face (nominal) value -номинал, номинальная стоимость: сумма, обозначенная на ценной бумаге; процентная ставка по облигациям рассчитывается от номинала.
bond yield – доходность облигации
seniority – здесь: преимущественное право на активы компании
share valuation – определение цены или стоимости акции
earnings yield – доходность по прибыльности: доход, который получил бы акционер при распределении всей прибыли компании после уплаты налогов в виде дивидендов (отношение прибыли на одну акцию к ее рыночной цене)
bond covenant – здесь: условие контракта о покупке облигаций, защищающее их держателей
debt service – обслуживание долга: ежегодные процентные платежи и выплаты основной суммы долга (или взносы в фонд погашения)
open outcry – свободный биржевой торг, метод заключения сделок голосом и жестом в торговом зале биржи (без аукционера); биржевик выкрикивает свои цены и заключает сделку с первым, кто ответит на предложение
employee share-ownership schemes – схемы владения служащими акциями своих компании: программа участия в прибылях компании путем покупки ее акций
internal (finance) financing - внутренние финансы компании: нераспределенная прибыль, в отличие от кредитов и займов
51. Ipsen IPO marks Paris high point
Ipsen, a Paris pharmaceutical company, yesterday raised ?324m in its initial public offering, marking a record year for flotations in France.
It came as the French stock market hit a fresh 3%-year high and means the funds raised via IPOs in France this year will be more than twice as high as last year and are likely to surpass the level of the dotcom boom.
The French CAC-40 closed yesterday at 4,667.20, its highest level since March 2002. The market has risen more than 22 per cent this year.
“The good news is that the price-earnings [ratio] has not moved a lot,” said Dominique Sabassier, chief investment officer at Natexis Asset Management. “The level of markets is in line with increased earnings.”
“The bad news is that, although it is not expensive, it is high.” Mr Sabassier said earnings could not be expected to perform as well next year.
Prior to Ipsen, which priced its shares last night at ?2230, companies listing on the Euronext-owtted Paris exchange had raised ?l2.3bn this year compared with ?5.5bn last year and ?12.9bn in 2001.
The biggest of the year by far was EDF, the French electricity group, which last month raised ?7bn in its part-privatisation, making it the biggest IPO in the world for five years. Its former state-owned sister utility GdF raised ?3.5bn in July.
Other new entrants have included Meetic, a dating agency, and Eutelsat, a satellite operator that endured a bumpy launch.
Mr Sabassier said investor reaction to this year's IPOs was proof of a "greater maturity" in the market. "People say: 'We want shares, but we don't want them at any price'."
Ipsen's increased capital will give it the "flexibility" to expand in the US, according to Jean-Luc Belingard, chief executive. The placement involved the sale of 6.9m existing shares belonging to the family of founder Henri Beaufour and 7.7m new shares that generated ?170.9m.
The pricing was towards the lower end of the indicative range of ?21.70-?25.20 and values Ipsen at about ?1.8bn. Trading starts today.
Goldman Sachs and BNP Paribas were joint lead managers. ABN Amro, Rothschild, HSBC and Societe Generale were co-lead managers.
In another sign of confidence among French biotechnology and pharmaceutical companies, BioAlliance Pharma intends to launch its IPO today.
52. Swiss Machine Tool Group in IPO
The recovery in the fortunes of the Swiss machine tool industry has been underlined by the decision of Tornos, one of the world's leading producers of automatic lathes, to float its shares on the Swiss stock market in an initial public offering that could value the company at more than SFr400m ($243m).
Tornos is one of the great names of the Swiss machine tool industry. It is one of the world' biggest makers of high-precision lathes for industries ranging from watch-making to medical technology and the car industry. Exports account for some 90 per cent of sales.
However, like many old names in the Swiss machine tool industry, it ran into financial problems in the 1980s because of its high cost base and failure to match high-tech competition from countries such as Japan.
The slump in demand for machine tools early in the 1990s, linked to the world recession, compounded Tornos's difficulties.
In March 1995, Anton Menth, the current chief executive, was brought in from outside the machine tool industry at the behest of the group's bankers, who were owed SFr70m and were under pressure to write off their debts to preventthecompany failing.
Mr Menth cut stocks and concentrated production on one site. In addition, he replaced many of the group mechanical engineers with software experts and reduced the time taken to build a machine from nine months to six weeks.
Under Mr Menth, Tornos has nearly trebled its sales and doubled its workforce to more than 1,000 people. Last year it increased sales by 26 per cent to SFr370m and its operating income before interest, taxes, depreciation and amortisation rose 23 per cent to SFr41.9m.
Over the past three years Tornos's sales have grown at an average 23.5 per cent a year.
In early 1999 Tornos was sold to Doughty Hanson, the UK venture capitalist, after the previous owners and their banks had aborted an attempted IPO because of weak market conditions. The new IPO, which is being led by Credit Suisse First Boston, is primarily to finance future growth.
Tornos will be the third Swiss company that Doughty Hanson has floated on the Swiss market.
1) Способы привлечения капитала путем получения кредита в банке, либо с помощью эмиссии облигаций, относятся к долговому (заемному) финансированию.
2) Финансирование за счет выпуска акций является более предпочтительным для компаний, так как нет необходимости выплачивать проценты.
3) Привилегированная акция дает владельцу право на получение дивидендов и на часть капитала компании (в случае банкротства) по сравнению с обыкновенной акцией, а также имеет фиксированный размер дивиденда.
4) 18 апреля 2002 г. в результате первоначального публичного предложения на биржах РТС и ММВБ было размещено 16 млн. обыкновенных акций РБК.
5) В 1996 году на рынке начинаются операции с акциями Yahoo. Организаторы выставили акции по цене 13 долл. за штуку, торги начались с цены 24,50 долл., а к концу первого дня торгов цена акции достигла уже 33 долл. Если бы в момент первоначального публичного предложения акций вы купили 100 акций, затратив на них 2450 долл., сегодня ваши вложения составляли бы 22 тыс. 800 долл.
6) «Голубая фишка» - первоклассная компания известная своей надежностью, качеством товаров и услуг, стабильной прибылью, а также выплачивающая дивиденды.
7) Выпуск новых акций, предлагаемый акционерам компании по более низкой цене, чем рыночная называется эмиссия прав.
SECTION 2 MARKET PLAYERS. TRADING ON THE MARKETS
Companies needing money for development may raise finance or raise capital on the stock market or stock exchange. Stock markets may also be referred to as bourses.
Stock exchanges are found in financial centres. New York’s financial centre is, of course, Wall Street and London’s is the City, also referred to as the Square Mile.
The most prestigious exchange in the world is the New York Stock Exchange (NYSE). The "Big Board" was founded over 200 years ago in 1792 with the signing of the Buttonwood Agreement by 24 New York City stockbrokers and merchants. Currently the NYSE is the market of choice for the largest companies in America.
The NYSE is the type of exchange, where much of the trading is done face-to-face on a trading floor. This is also referred to as a listed exchange. Orders come in through brokerage firms that are members of the exchange and flow down to floor brokers who go to a specific spot on the floor where the stock trades. At this location, known as the trading post, there is a specific person known as the specialist whose job is to match buyers and sellers. Prices are determined using an auction method: the current price is the highest amount any buyer is willing to pay and the lowest price at which someone is willing to sell. Once a trade has been made, the details are sent back to the brokerage firm, who then notifies the investor who placed the order.
The second type of exchange is the virtual sort called an over-the-counter (OTC) market, of which the Nasdaq is the most popular. These markets have no central location or floor brokers whatsoever. Trading is done through a computer and telecommunications network of dealers. It used to be that the largest companies were listed only on the NYSE while all other "second tier" stocks traded on the other exchanges. The tech boom of the late 90s changed all this; now the Nasdaq is home to several big technology companies such as Microsoft, Cisco, Intel, Dell, and Oracle. This has resulted in the Nasdaq becoming a serious competitor to the NYSE.
On the Nasdaq brokerages act as market makers for various stocks. Market makers are wholesalers of shares who keep supplies of the shares in which they deal, making a continuous market for buyers and sellers.
The London Stock Exchange (LSE) is the principal market for trading of equities, other corporate securities and government debt in the UK. It has the third largest turnover in the world, after Tokyo and New York.
Financial centres bring together investors and the businesses that need their investment. A speculator is an investor who wants to make a quick profit, rather than invest over a longer period of time.
Brokers, dealers and traders buy and sell for investors, and in some cases, for themselves or the organizations they work for.
Things traded in financial centres include : securities : shares and bonds; commodities such as metals and farm products; currencies: buying and selling the money of particular countrieson the foreign exchange or forex markets.
Securities houses are large financial institutions offering a number of investment services.
People and institutions involved in a financial market are, informally, market players.
Shares change handswhen they are traded. When there is a lot of trading in a market, turnoveris high. Trading is most often described as moderate or active.
Trading on the stock exchange and on other markets can also be: dull, lacklustre, light, negligible, quiet, slow, sluggish, thin, or weakwhen activity is low;
bumpy, choppy, erratic, hesitant, mixed, uncertain, or volatile when the overall direction of prices is not clear;
brisk, heavy, or hectic when there is a high volume of trading, in other words high turnover of shares;
frantic, frenetic, or frenzied when there is a very high volume of trading .
When market prices are rising people talk about a bull market. Bull markets cannot last forever though, and sometimes they can lead to dangerous situations if stocks become overvalued. If a person is optimistic, believing that stocks will go up, he or she is called a bull and said to have a bullish outlook.
A bear market is when the economy is bad, recession is looming, and stock prices are falling. Bear markets make it tough for investors to pick profitable stocks. If a person is pessimistic, believing that stocks are going to drop, he or she is called a bear and said to have a bearish outlook.
If prices fall to below the level they were before rising, earlier gains are wiped out.
1) What do Wall Street and the City stand for?
2) What is the Buttonwood Tree Agreement?
3) How is trading on the NYSE done?
4) What is an over-the-counter market?
5) What role do market makers play?
6) What is a speculator interested in?
7) What products are traded in financial centres?
8) What words are used to describe low trading activity? high turnover of shares?
9) Whom do we call a bull? a bear?
10) What happens to prices in a rally?
Tradinghas been heavy on the New York Stock Exchange, with very high turnover of one and half billion shares changing hands. We’ve seen spectacular gains, especially among blue chips.
The bull market seems set to continue, after yesterday’s record high at the close. Dealers seem bullish and expect the Dow to go through the 15000 barrier soon.
The bear market continues, with prices set to fall further in the next few days. Dealers are bearish, with many saying there is no sign of a rally. If prices continue to fall, there may be another stock market collapse or crash, like the ones in 1929 and 1987.
The NYSE uses floor traders (people) to make trades, whereas the Nasdaq and many other exchanges are computer driven.
To be listed on the NYSE, a company must earn $2.5 million before taxes, have more than one million shares of stock outstanding, give common stockholders voting rights, and publish periodic financial statements.
Market makers accept the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the market maker immediately sells from its own inventory or seeks an offsetting order. This process takes place in mere seconds
In general, the reason for which a stock is traded over-the-counter is usually because the company is small, making it unable to meet exchange listing requirements. Also known as "unlisted stock", these securities are traded by broker-dealers who negotiate directly with one another over computer networks and by phone.
TEXTS TO TRANSLATE:
53. Siemens Seeks US Expansion as ADRs Launch
Siemens, the German electronics and engineering group, yesterday established a platform for further expansion in the US, listing its shares on the New York Stock Exchange and promising a 54 per cent increase in US revenues within two years.
Siemens' American Depositary Receipts were launched into a rough market, which saw the Standard & Poor's 500 index drop into bear-market territory - down 20 per cent from its peak - in morning trading, and the Nasdaq Composite Index slip below 2,000.
"A day when stock prices are exploding is nicer, but if you make such a strategic move it isn't so important ... what really counts is the medium- and long-term effect," said Heinrich von Pierer, the group's president and chief executive.
At lunchtime in New York, the ADRs were trading at $111.95, compared with an opening price of $112.25, after a warning from Ericsson, the Swedish mobiles phones manufacturer, hit Siemens shares in Europe.
Mr von Pierer said that even without further acquisitions, he expected the group's US operations to generate $25bn in revenues in two years, compared with $16.2bn in the 12 months to September 30 2000.
Siemens, which has spent $8bn on US companies since 1998, had no particular acquisition targets in mind, he added, but would concentrate on integrating its recent purchases.
Acquisitions have cut into profitability of the US businesses, which only broke even in the last fiscal year.
The company has now identified about a quarter of its 100 or so businesses that need to improve their performance or risk being sold off or closed.
The NYSE listing coincides with a $25m advertising campaign to raise Siemens' profile in the US, where the group already employs nearly 80,000 people across the range of its businesses, from power systems to lighting.
ADR - American depositary receipt - американская депозитная расписка (АДР): документ, с помощью которого вводятся в обращение на американский рынок ценные бумаги иностранных государств; cвободно-обращающаяся расписка на иностранные акции, депонированные в банке США
54. Bear Markets
With the bears now firmly in control of every stock market in the world, any sane government thinking of selling of its state-owned airline should be reaching for the telephone to inform its financial advisers to put away the sale prospectus until the bulls are back in control of share prices.
The value of even blue chip airlines like British Airways and Lufthansa has tumbled. Stock market interest in air transport shares is at rock bottom. Only those considering a fire sale or privatization for ideological reasons should be venturing into a flotation. The alternative now is to sell off assets which are in some cases worth little more than half the price they could have demanded at the start of the year.
Austrian Airlines has already seen the writing on the wall and called a halt to the first phase of its privatization until market conditions improve. Others such as Air France and Italy’s Alitalia should be giving serious thought to following suit. Unfortunately, a number of airlines are not in the relatively comfortable position of Austrian in being able to shelve the privatization process until the markets improve.
In Asia, probably more than anywhere else, governments may now have little choice but to press ahead. There, they are looking down the barrel of a gun loaded by the International Monetary Fund which is piling pressure on to governments to sell off their state assets in return for much needed loans. Stock prices are at an all-time low and airline shares have been trading at, or below, their actual asset value. The apathy of local Asian financial markets about airline stock should be a sufficient wake-up call to the struggling Asian flag carriers and their proud state owners to the fact that the days of national carriers for every country with world networks are fast drawing to a close. Waiting for local investors to appear as “white knights” is tantamount to a very slow and painful death.
For those airlines with strategic interests, attracting foreign investment from one of the major players in a global alliance may be one of the few viable answers available.
What is certain is that wider economic pressures are making it very difficult to provide funds to continue to bail out inefficient flag carriers. Unless airlines like Indonesia’s Garuda, which have neither global alliance partners nor foreign investment prospects, are made more attractive for sale, they will be left on the shelf to wither. Those who miss the global alliance partnership train face a future of shrinking back into nothing more than regional carriers simply because they won’t be able to compete with the likes of Oneworld or the Star Alliance – a prospect which may well await carriers in other parts of the world, including Europe.
The good news for at least some of Asia’s airlines, private or state-owned, is that despite their chronic problems there are a number of major international carriers going in search of bargain buys in the region. Some are armed with a war chest of money, the purchasing power of which has been significantly enhanced by the weakness of Asian currencies.
Witness the number of carriers beating a path to Bangkok at the prospect of a sell-off of Thai Airways International stock. Waiting in the wings are those with global ambitions such as British Airways and Lufthansa. Singapore International Airlines is also a contender, although its aspirations in this instance are regional rather than global.
The experience of Philippine Airlines holds a lesson for Asia. Having finally broken the unions, the carrier is a much more attractive propositio
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