IFM - I - GLOBAL FINANCIAL MANAGEMENT.pptx

This presentation offers an in-depth look at the Global Financial Environment, a dynamic framework that connects countries, economies, and markets worldwide. Designed for students, professionals, and anyone interested in global finance, this presentation covers the following topics:

Introduction to Global Finance: An overview of the global financial environment, its importance, and its role in the modern economy.
International Financial Markets: Insights into domestic and offshore markets, money market instruments, and the critical role of Eurobanks.
Exchange Rate Mechanisms: Understanding how exchange rates work, types of exchange rate regimes, and the impact of exchange rate fluctuations on global trade.
Global Financial Institutions: The role of major institutions like the International Monetary Fund (IMF) and World Bank in stabilizing and regulating global financial markets.
Impact of Interest Rates and Inflation: How interest rate and inflation rate changes affect international trade, investments, and capital flows.
Emerging Challenges: Recent challenges in the global financial landscape, including currency risk, regulatory changes, and the effects of globalization.
This presentation aims to provide viewers with a comprehensive understanding of how global financial systems operate and how they influence economic policies, international investments, and corporate decision-making. Whether you are studying finance or working in a related field, this presentation will help you grasp the key concepts and trends that shape our global economy.

1. Dr D Divya Assistant Professor Department of MBA Sri Ramakrishna College of Arts & Science INTERNATIONAL FINANCIAL MANAGEMENT – GLOBAL FINANCIAL ENVIRONMENT

2. Global Financial Environment International Markets: Overview of key global financial markets (e.g., NYSE, LSE, Tokyo Stock Exchange). New York Stock Exchange (NYSE) Location: New York City, United States 1792 Significance: The world's largest stock exchange by market capitalization, it's home to many of the world's most valuable companies. Key Features: Known for its traditional trading floor, though electronic trading is increasingly prevalent. Strict listing requirements, attracting high-quality companies. A significant influence on global financial markets. NASDAQ Location: New York City, United States 1971 Significance: A major U.S. stock exchange, known for its technology-heavy listings. Key Features: Primarily an electronic exchange. Home to many tech giants like Apple, Microsoft, and Google. Often sets the tone for global technology stocks.

3. London Stock Exchange (LSE) Location: London, United Kingdom 1698 Significance: One of the world's oldest stock exchanges, it plays a crucial role in European finance. Key Features: A diverse range of listed companies, including many international firms. A major center for global bond trading. Plays a significant role in European M&A activity. Tokyo Stock Exchange (TSE) Location: Tokyo, Japan1878 Significance: The largest stock exchange in Asia, it's a key player in the global financial markets. Key Features: Home to many Japanese multinational corporations. Influenced by Japanese economic trends and government policies. Plays a crucial role in the Asian financial landscape.

4. Shanghai Stock Exchange (SSE) Location: Shanghai, China 1891 Significance: One of the largest stock exchanges in the world, it's a gateway to the Chinese economy. Key Features: Primarily a domestic market, but foreign investment is increasing. Influenced by Chinese economic policies and government regulations. Offers exposure to the rapidly growing Chinese economy. Hong Kong Stock Exchange (HKEX) Location: Hong Kong 1891 Significance: A major Asian financial hub, it's a bridge between mainland China and international markets. Known for its international outlook and diverse range of listed companies. A popular destination for Chinese companies seeking international capital. Plays a crucial role in the global trade and finance network.

5. National Stock Exchange of India (NSE) Location: Mumbai, India 1992 Significance: India's largest stock exchange by market capitalization, known for its technology-driven platform and efficient trading systems. Key Features: Offers a wide range of products, including equities, derivatives, debt, and currency derivatives. Known for its innovative products like index futures and options. Has a strong focus on retail investors. Bombay Stock Exchange (BSE) Location: Mumbai, India 1875 Significance: One of the oldest stock exchanges in the world, it's a major player in the Indian financial market. Key Features: Primarily a domestic market, though it also attracts foreign investors. Known for its traditional trading practices, though it has modernized in recent years. Home to many large Indian companies.

6. Exchange Rate Mechanisms: Floating Exchange Rate A floating exchange rate is determined by market forces of supply and demand. This means the value of a currency fluctuates freely relative to other currencies. Impact on Decisions: Uncertainty: Businesses operating in a floating exchange rate regime face currency risk, as exchange rates can fluctuate significantly. Hedging: Companies may need to use hedging strategies to protect themselves from adverse currency movements. Competitive Advantage: A weaker currency can boost exports by making products cheaper for foreign buyers. Fixed Exchange Rate A fixed exchange rate is a system where a country's currency is pegged to another currency or a basket of currencies. The government or central bank intervenes in the foreign exchange market to maintain the fixed rate. Impact on Decisions: Stability: A fixed exchange rate can provide stability and predictability, which can be beneficial for businesses. Reduced Risk: Businesses may face less currency risk as exchange rates are relatively stable. Policy Constraints: Governments with fixed exchange rates may have less flexibility in implementing monetary policy to address domestic economic conditions.

7. Feature Floating Exchange Rate Fixed Exchange Rate Determination Market forces of supply and demand Government or central bank intervention Currency Value Fluctuates freely Fixed to another currency or basket of currencies Economic Policy Greater flexibility in monetary policy Less flexibility in monetary policy Risk Higher currency risk Lower currency risk, but potential for economic imbalances Key Differences and Considerations: