Brazil, japan, UK - Brazil, Japan, Uk Executive Summary A...

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Brazil, Japan, Uk Executive Summary A cross analysis between three countries around the world were arranged to determine which of those countries present the best investment opportunities. An evaluation among the countries was structured through the comparison of interest rates, inflation, GDP, unemployment and exchange rate fluctuations. International portfolio theory is important for multinational corporations to make decisions about where and how they should invest in other countries. Current information that pertains to the project, like the country's indices, is easily located in websites like yahoo (http://finance.yahoo.com/m2?u). Information about the country's inflation and interest rate is often located in the country's national bank, such as; The Bank of Brazil, The Bank of Japan, and The Bank of United Kingdom. The GDP for each country was obtainable through a website known as Countrywatch. Countrywatch contained a lot of information about different factors regarding the different countries that are relevant to this project. Such factors included: history of the country, past and current economic conditions, development, etc. This information is helpful when analyzing a country's investment opportunity because it shows what types of risk may be involved. To further understand the differences amongst the countries and to have a better understanding of the appropriate investment strategies, a regression analysis was created. Literature Review Brazil: For many years, Brazil suffered from very high inflation, until 1994, when the Brazilian government introduced the Real Plan. After the plan was introduced, the economy grew an average of 3.4% until 1998. In February of this year, the Sao Paulo Stock Market was the highest since June of 2000. "Investors abroad purchased nearly 7.48 billion reals in shares on the Sao Paulo trading floor, selling shares worth a total of 5.92 billion reals over the same period," (Countrywatch). According to Countrywatch, during the late 1990's, Brazil's stock exchanges listed 478 companies. Foreign investors can hold 49% of common stocks and 100% of preferred stocks. However, they must acquire Central Bank certificates of registration. Brazil has been involved in an economic program of industrialization and development for the past 50 years. The country began development through import substitution and considerable state intervention in the country's economic policy. The government then focused on the upper and middle classes through a market model based on fiscal discipline, trade liberalization, privatization, and deregulation (Journal of American Academy of Business, Cambridge). Brazil's economy shrank 0.2% in 2003, the worst performance in 11 years (The Economist), but expects inflation to continue in a downward direction and hopes to reach its target rate of 5.5% by 2005. With the economy becoming more stable and with their current inflation rate of 6.0%, their goal seems reachable in twelve months. As of March 5, 2004 the Banco Central Prime Rate of Interest for
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This note was uploaded on 04/04/2012 for the course HIST 2710 taught by Professor Rethjames during the Spring '09 term at Utah Valley University.

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Brazil, japan, UK - Brazil, Japan, Uk Executive Summary A...

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