Beruflich Dokumente
Kultur Dokumente
a)International Trade
b)Licensing
c)Franchising
d)Joint Ventures
e)Acquisition of existing business
f)Establishing new foreign subsidiaries.
LICENSING:
FRANCHISING:
ADVANTAGES:
To the franchisor To the franchisee
Expand distribution Sound management,
without increased capital training and decision
investment. making may be available.
Community acceptance of Market tested product so
the product less risk will be there.
Marketing & distribution Advertising & promotion
expanses are shared. is already there.
Some operating cost may Acceptance in large
be transferred to the system of retailers.
franchisee.
Flat fee can be collected Credit may be available.
from franchisee
Through agreement, Advisory available.
quality control can be
maintained.
Percentage on sale can be Credit may be available.
earned.
DISADVANTAGES:
Franchisor Franchisee
Long distance control Gives up much freedom in
over franchisee. management decision.
Expanses on training Profits are always
sometimes very high. shared.
Loss of some ownership Franchises may be very
expensive.
Product can be stolen Undue interference.
JOINT VENTURES:
Existing business:
• Financial picture
• Why for sale, is it TITANIC?
• What are business trends?
• Books should be checked.
• All concerned should be interviewed.
START UP OR PURCHASE A FRANCHISE:
POSSIBLE PROBLEMS
Contract Fulfillment
Convenience
Prompt Payment
Advice
Convenience
Credit
Expert assistance
SELLER
In advance
At time of Shipment
After shipment
BUYER
In advance
At time of Shipment
After shipment
Definition
Buyer
Seller
ISSUING A CREDIT
IMPORTS:
EXPORTS:
1 LC advising Rs.1,400
per
quar
ter
2 LC advising Rs.1,200
amend
ment
3 LC Minimum
confi Rs.1
rmati ,400
on
$ =Rs.19.32 in 1989.
IMF Support Arrangements to Pakistan
(1980-2004)
Date of Amou
Disbursem
Arrangem nt Signed
Arrangem ent
ent (SDR during
ent (SDR
(expiration millio rule of
million)
) n)
EFF 24-11-80 1268.0 1079.00 Ziaul
(23-11-83) 0 Haq
SBA 28-12-88 273.15 194.48 Benazir
(7-3-90) Bhutto
SAF 28-12-88 382.41 382.41 Benazir
(27-12-91) Bhutto
SBA 16-9-93 265.40 88.00 Nawaz
EFF/ (15-9-94) 379.10 123.20 Sharif
ESAF 22-2-94 606.60 172.20
(21-2-97)
22-2-94
(21-2-97)
SBA 13-12-95 562.59 294.69 Benazir
(31-3-97) Bhutto
EFF/ESA 20-10-97 454.92 113.75 Nawaz
F (19-10- 682.38 265.37 Sharif
2000)
SBA 29-11- 465.00 465.00 Pervez
2000 Musharr
(30-9- af
2001)
PRGF 7-12-2001 1033.7 861.42 Pervez
(5-12- 0 Musharr
2004) af
LATEST LOAN:
Main Features
- Bail-out package.
- Investors' confidence builder.
- Economic stabilizer and revival of growth.
- Step towards greater external dependence and
source of hardship to the
people, and so on.
- Ignores protecting the poor.
-Presumes that tight monetary and fiscal policies
will ensure economic revival in later years.
-Reduced government borrowings
CREDIT APPLICATION
Revocable Credit
Irrevocable Credit
Irrevocable Credit
PRESENTATION
BILL OF LADING
COMMERCIAL INVOICE
* date.
* name and address of buyer and seller.
* order or contract number, quantity and
description of the goods, unit price (and
details of any other agreed charges not
included in the unit price), and the total
price.
* weight of the goods, number of packages,
and shipping marks and numbers.
* terms of delivery and payment.
* shipment details.
CERTIFICATE OF ORIGIN
INSURANCE CERTIFICATE
BY ACCEPTANCE
Issuing Bank
All credits must nominate the bank (nominated bank)
which is authorized to accept drafts (accepting
bank).
BY NEGOTIATION
1. REVOLVING CREDIT
3. TRANSFERABLE CREDIT
a)SIGHT
b)DA
BANKING FACILITIES:
FINANCIAL DOCUMENTS:
a) Cheque
b) Bill of exchange
c) Promissory note
COMMERCIAL DOCUMENTS:
a) Transport documents
b) Documents of title
EXPORT FINANCE:
a) Pre-shipment
b) Post-shipment
PART-I:
BALANCE OF PAYMENT:
i) Current Transactions:
EXCHANGE CONTROL
OBJECTIVES OF EXCHANGE CONTROL
a)EXCHANGE RATIONING:
b)BLOCKED ACCOUNTS:
c)PAYMENT AGREEMENTS:
CLEARING AGREEMENTS:
INDIRECT METHODS:
a)QUANTITATIVE RESTRICTIONS:
b) Liquefying securities.
Customer should be confident
about sale/purchase.
c) Pricing: Mark-up rates.
d) Foreshadowing future:
Forecasting of future for
financial management.
e) Allocating resources:
Considering growth, safety
and yield.
a) Primary market.
b) Secondary market
c) Money market
d) Capital market
FUNCTIONS:
i) To transfer purchasing power
from one country to another.
ii) It takes place by debiting
and crediting accounts of
each Bank.
iii) No physical delivery of
currency takes place usually.
iv) It provides credit also to
the business community.
v) HEDGING: Hedging means
avoidance of foreign exchange
risk or covering of an
position without buying or
tying up funds. This process
is carried out in forward
Market. This promotes foreign
trade.
vi) SPECULATION:
a)It is opposite of hedging.
b)The speculator takes the
risk
Of any transaction.
c)Speculation can take place in
forward or spot market.
d)If the speculator buys a
currency in expectation of
reselling it on profit it will
be called” LONG POSITION” it
will have STABILIZING EFFECT
otherwise it will be called
“SHORT POSITION” or
DESTABILIZING EFFECT.
VII)SWAP TRANSACTIONS:
It refers to following:
i) Simultaneous buying and
selling of foreign currency
for different delivery dates
in opposite direction.
ii) May cover spot against
forward.
iii) May take place between
commercial parties or Bank
etc.
iv) May be for a limited period
of time.
v) May be lesser risky.
vi) Very popular with
speculators, as well.
i) In order to facilitate
foreign exchange transaction
the Banks buy/sell currency
in spot or forward.
ii) The difference between buy
and sell shows the commitment
position of the Bank.
iii) If purchase side is more than
sale side it is called
overbought and the opposite
one is called oversold.
iv) If both positions are equal
it is called SQUARE.
v) If both positions are nearly
equal, it is called near
square.
vi) Sometimes delay in
transmitting takes place,
which may disturb position.
DIRECT QUOTATION:
Rate of exchange is expressed in
units of national currency in most
currencies:
Rs.60=US$1
INDIRECT QUOTATION:
It values the currencies in terms
of the other currencies than in
national currencies.
US$ 0.5=Rs.1
CROSS RATES:
i) The rate of exchange between
any two currencies is kept
the same in different money
centers by “ARBITRAGE”.
ii) Sale and purchase is made in
and from money centers where
the currency is available at
lower or higher rates
respectively.
iii) When two currencies and two
centers are involved it is
called “TWO POINT ARBITRAGE’.
iv) When three currencies and
three centers are involved it
is called “THREE POINT
ARBITRAGE’ OR TRIANGULAR.
v) When national currency is not
used in the transaction and
exchange rate is calculated
on the basis of a third
currency, it is called CROSS
RATE.
vi) It is known as calculated
parity between two money
centers through a third e.g.
SPOT RATE:
The spot rate of the currency is
the value quoted for the nearest
settlement date for the purchase
and sale of the currency against
another one. The transaction may be
settled in two to three working
days.
FORWARD RATE:
It covers following concepts:
i) Rate at which the currency
can be bought or sold for
the delivery on a future date.
ii) Agreement to buy or sell at a
specified future date at rate
agreed today.
iii) No payment will be made
except security deposit at
the time of signing of
contract.
iv) No consideration for spot
rate at the time of
settlement.
v) May be for one to six months
or longer.
vi) Longer period contracts are
not common due to
uncertainties involved.
vii) If forward rate is less than
spot, it is called “FORWARD
DISCOUNT” otherwise it will
be called “FORWARD PREMIUM”.
i) Dirty float:
CURRENCY DERIVATIVES
BID/ASK RATE:
The ask rate is the selling rate
whereas bid rate is the purchase
rate. The spread between bid & ask
rate is wider in forward contracts.
FORWARD FUTURE
Size of Tailored Standardize
contract to d
individual
needs
Delivery Tailored Standardize
date to d
individual
needs
Participant Bankers, Bankers,
s brokers, brokers,
MNC, MNC,
speculator qualified
s not speculators
encouraged
Security Not Needed
deposit essential
Transaction Set by Negotiable
cost spread
MOTIVES:
OFFSHORE BANKING: