Egg

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Egg

  1. 1. ENTERPRENUAR GOOD GOVERNANCE SOURCES OFRAISING CAPITAL
  2. 2. Funds are raised from international financial market throughsale of securities such as 1.long term 2.medium term and 3.short term funds
  3. 3. LONG TERM INSTRUMENTS1.INTERNATIONAL EQUITIESInternational equities are a new instrument representing foreignportfolio equity investment.They are ordinary shares sold to international investors in theform of American or Global depository receipts.The investor gets dividend and not interest .They do not have the same voting rights as in the case of foreigndirect investment return.
  4. 4. The benefits are:a) The company issues international equities when the domesticcapital market s already flooded with its shares.b) The presence of restrictions on issue of shares in the domesticmarket facilitates issue of international equities.c) Company issues international equity for gaining internationalrecognition among the public.d) International equity bring in foreign exchange which is vital fora firm in a developing country.
  5. 5. e) International capital is available at lower cost throughinternational equities.f) Funds raised through such an instrument do not add to theforeign exchange exposure.g) It brings in diversification benefits and raise return with agiven risk or lower risk with a given
  6. 6. 2. INTERNATIONAL BONDSThey are debt instruments that are issued by internationalagencies, government and companies for borrowing foreigncurrency for a specified period of time.The issuer pays interest to the creditor and makes repaymentof capital.The different types of bonds are:-Foreign bond-Euro bond-Global bond-Straight bonds-Convertible bonds
  7. 7. MEDIUM TERM INSTRUMENTSMEDIUM TERM EURO NOTESIt is an extension of short term euro notes, which is issued to getmedium term funds in foreign currency.They are not underwritten, but there is a provision forunderwriting.They carry fixed rate of interest.
  8. 8. SHORT TERM INSTRUMENTSThese are two types1. EURO NOTESEuro notes are like promissory notes issued by companies for obtainingshort term funds. They are denominated in any currency other than the currency of thecountry where they are issued.It is a low cost funding route.The documentation facilities are minimum.When issuer issues euro notes, it hires the service o agent who issues thenotes, gets them underwritten and sells them through placement agents.
  9. 9. 2.EURO COMMERCIAL PAPERSThey are short term fund instruments issued only by highly ratedcompanies.They are not underwritten. It faces minimal documentation.ECPs have longer maturity going u to one year.The ECP route for raising funds is investor driven.
  10. 10. THANK YOUKOTESWARARAO.K

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