Global Depository Receipts (GDR) and convertible bonds Law of Intl Essay

Global Depository Receipts (GDR) and convertible bonds Law of Intl Finance - Essay Example DRs offer a number of benefits to investors seeking to diversify internationally. DRs greatly facilitate trading in foreign securities by reducing the risk of fraud. While foreign companies shares typically are written in the language of the issuer, DRs are usually issued in the language of the issuing agent. DRs are legal obligations of the issuing agent and not of the firm that issued the stock. Thus, the risk of falling prey of bogus certificates is eliminated. As such, DRs overcome many of the obstacles that mutual funds, pension funds, and other financial institutions have in investing and holding securities outside the homeland. (Geiders 1997, cited in Webster, 1998, p. 2). DRs are also convenient. Securities do not have to be delivered through international mail, prices are quoted in pounds or U.S. dollars, and pay dividends or interest in the home currency. In fact, the prices of a number of foreign stocks routinely are reported in the financial press. Importantly, global cus todian safekeeping charges associated with purchasing foreign securities are eliminated, which could save the investor as much as 40 basis points annually. (Webster, 1998) An important function of DRs is that they enable foreign firms to raise capital in the most lucrative markets for investment capital such as Great Britain and United States. Listing shares directly on UK or U.S. stock exchanges, however, is problematic, Disclosure requirements are among the strictest in the world. Foreign firms also face significant costs producing UK or U.S.-style financial statements. DRs provide foreign firms with a way around these listing problems. While the potential benefits of direct foreign investment are connected to overseas diversification the potential disadvantages to investing in DRs also are communicated by overseas diversification risks: fluctuating currency values, lower liquidity, and foreign tax liability. Fluctuating currency values. An investor does not have to exchange currency to purchase DRs, but DR prices are still influenced by fluctuating currency values. Since the pricing of DRs reflects the UK pounds value of a foreign security currency movements will work to an investor's advantage when the foreign country's currency drops in value in relation to the UK currency. But the opposite also is true. The value of DRs will drop when the foreign currency increases in value against the UK pound of sterlings. Overall, DRs still tend to track with the performance of their corresponding foreign securities. Lower liquidity. Most DRs are not as actively traded as foreign shares that are traded directly As a result, DRs may not be as easy to liquidate. Brokers that specialize in trading DRs, however, can liquidate them by instructing the foreign custodian to sell the underlying securities. Foreign tax liability. Although DRs pay dividends in pounds, these payments represent conversions of foreign dividends paid to a custodian on the underlying securities. As a result, DR holders must pay foreign taxes on these dividends. Although many DRs are considered highly

Why is football the most popular sport in UK Essay

Why is football the most popular sport in UK - Essay Example Today many individuals are thoroughly involved in this game and the football fever has become so strong and viral that it has taken the height o0f obsession in many individuals. Football has many different forms which are actually seen in the past. Initially this sport started as a game for farmers who made use of a ball made out of animal skin for their entertainment purpose. This was the point where the game started and gained popularity among the local masses. The old school form of football can be traced back to the time when it started to be played in English schools around the eighteenth and nineteenth century. The game became so influential and famous that now it was not just confined to the British Empire but it started to spread abroad too. This game was altered and then was stitched according to the needs of the people who dwelled in the region. In the nineteenth century the first 'Football League' was established in England, which started to initiate football competitions on a professional level. This sport gradually became very popular and around the twentieth century it became one of the most popular sports played with a team throughout the world. Thus the game football which is renowned globally took its emergence from the contemporary football games of the British. Football is undoubtedly the most high profile and popular game in the United Kingdom and there is no second thought about that. This is not just the case now; football has had the same importance since generations. Today the case has just exaggerated a bit. The domination of football primarily in 1990's has emerged as a major threat to various other sports. In the United Kingdom many organs govern the football. 'The Football Association' primarily belonging to England and other bodies it has like Scottish, Irish, Welsh etc. these organizations are established so that they can run and look after their own national teams, work on football as a recreational sport and also to organize comp etitions for the cup. Although these association are not anymore quite significant as professional leagues have overshadowed their popularity. The home regions/nations are responsible to host their own club football tournaments within their district. There are four components in English football that contain a vast amount of football clubs which are merely based on a League system. The high class 'FA Premier League'comprises of20 teams and is the richest and successful football league present in the world. The remaining three completely professional components are then run by 'The Football League' which constitutes of the other seventy two clubs. Yearly growth,promotion and relegations work on the basis of these four components and apart from they also operate amongst the lowest of them and land the lower organs or the football not played within leagues. Apart from the professional clubs there are many small scale football clubs too that are outside the four main components,as well as many more clubs which are partially professional. In short England comprises of more than hundred clubs which are playing professionally altogether, hence England has the honor to house the most clubs than any region in Europe. The most famous and the main football cup competitions that are held in England is firstly the 'FA Cup' which is an open to all competition where all men can participate and battle on the field to win, despite only the major professional clubs are seen to reach the finale. The other famous cup competition that is held is known as the 'League Cup' which is now commonly referred to as the'Carling Cup', this cup competition is precisely for the 'ninety-two