A Financial Investment Opportunity in Russia
A Financial Investment Opportunity in Russia
Maureen Kelly
FIN356_1201A_01: International Finance
Georgia Fountoulakis
Colorado Technical University Online I. Table of Contents Page I. Background 2 II. Pre-Investment Financial Considerations 2 III. Forecasting the Foreign Currency Exchange Rate 3 IV. Interest Rate Parity and Forecasting 5 A. Macroeconomic Factors 5 1. Gross Domestic Product 5 B. Fiscal and Account Deficits and Inflation 6 C. Socio-Political 6 1. Unemployment Rate, Growing the Shrinking Workforce and Government Incentive Support Programs 6 2. Government Stability 8 3. Central Bank Independence 8 D. Fundamentals 9 1. Purchasing Power Parity 9 2. Trade Weighting 9 E. Speculative Factors 9 V. Foreign Investment Policies 11 VI. The Foreign Investment Atmosphere 12 VII. The Volatility of the Russian Stock Market 13 VIII. Government Intervention in the Private Financial Sector 15 IX. Government Limitations on Foreign Investments 15 X. Trade Regulations and Policies and World Trade Organization Entry 16 XI. International Finance Regulations 16 A. Currency Controls – General Principles 16 B. The Central Bank of the Russian Federation Support 17 C. The International Monetary Fund and Russia 19 XII. Capital Structure 20
[Partially repurposed work (3%). Previously submitted in its entirety for MGM355_1104B_01: International Business Practices, Ginsburg, J., DM, 12.12.2011, Paper ID: 219637211]
A Financial Investment Opportunity in Russia I. Background
Our regional bank has come upon an international global expansion opportunity and must make a decision which country presents the most optimal environment to support this expansion move. With readily-available investment funds, there are many factors to be considered. Some of these include the political, economic and social stability of the country as well as the legal
Maureen Kelly
FIN356_1201A_01: International Finance
Georgia Fountoulakis
Colorado Technical University Online I. Table of Contents Page I. Background 2 II. Pre-Investment Financial Considerations 2 III. Forecasting the Foreign Currency Exchange Rate 3 IV. Interest Rate Parity and Forecasting 5 A. Macroeconomic Factors 5 1. Gross Domestic Product 5 B. Fiscal and Account Deficits and Inflation 6 C. Socio-Political 6 1. Unemployment Rate, Growing the Shrinking Workforce and Government Incentive Support Programs 6 2. Government Stability 8 3. Central Bank Independence 8 D. Fundamentals 9 1. Purchasing Power Parity 9 2. Trade Weighting 9 E. Speculative Factors 9 V. Foreign Investment Policies 11 VI. The Foreign Investment Atmosphere 12 VII. The Volatility of the Russian Stock Market 13 VIII. Government Intervention in the Private Financial Sector 15 IX. Government Limitations on Foreign Investments 15 X. Trade Regulations and Policies and World Trade Organization Entry 16 XI. International Finance Regulations 16 A. Currency Controls – General Principles 16 B. The Central Bank of the Russian Federation Support 17 C. The International Monetary Fund and Russia 19 XII. Capital Structure 20
[Partially repurposed work (3%). Previously submitted in its entirety for MGM355_1104B_01: International Business Practices, Ginsburg, J., DM, 12.12.2011, Paper ID: 219637211]
A Financial Investment Opportunity in Russia I. Background
Our regional bank has come upon an international global expansion opportunity and must make a decision which country presents the most optimal environment to support this expansion move. With readily-available investment funds, there are many factors to be considered. Some of these include the political, economic and social stability of the country as well as the legal
References: Colorado Technical University. (2011). MGM355 Phase 4 individual project [Task list]. Retrieved from Colorado Technical University Virtual Campus, MGM355-1104B-01: https://campus.ctuonline.edu Ernst & Young Fountoulakis, G. (2012, January 11). Factors Affecting Foreign Exchange Rates [Chat]. Retrieved from Colorado Technical University Online, Virtual Campus, FIN356_1201A_01, International Finance: https://campus. ctuonline.edu Fountoulakis, G Graham, J., & Harvey, C. (2002). How do CFOs make capital budgeting and capital structure decisions? Journal of Applied Corporate Science, 15(1). Retrieved from http://faculty.fuqua.duke.edu/~jgraham/website/SurveyJACF.pdf Highland, J International Monetary Fund. (2011). Russian Federation financial system stability assessment. Retrieved from http://www.imf.org/external/pubs/ft/scr/2011/cr11291.pdf Introduction to Russia’s legal system Moffett, M., Stonehill, A., & Eiteman, D. (2009). Fundamentals of Multinational Finance. (3rd ed.). Boston: Pearson Prentice Hall Moscow as international financial center Seabury, C. (2012). Risk of investing money in Russia. Retrieved from http://www.ehow.com/about_5374394_risk-investing-money-russia.html