Understanding The Financial Market And Globalization

India’s economy is booming! With large decreases in poverty, increases in literacy and GDP, India is continuing to make its way out of the third world and into the first. India is predicted to surpass even China in growth by 2050. A competitive private capital market has instilled Indians with a low cost high quality mentality and has resulted in some of the highest return rates for any country. India has been averaging 6% growth compared to China’s 9.5% with half the investments. India capital efficiency is one of its strongest economic benefits.

The Indian economy following the 1991 crisis swiftly moved away from central planning economy towards market-based economy with the government having less intervention and control. As a result, companies were operating in what is called emerging

India’s economy is one that appears to be on the brink of a major recession. Their central bank has made bad choices over the last number of years. This has lead to a low growth within the country and a high inflation rate. They changed their political leadership to someone who was more open to change and reform, but this has not come about. India reformed its tax system, which they believed would be the key to success in the country. This in fact caused the opposite. The economy slowed down sharply. They banned the sale of cows in India due to religions reason and this stopped the growth of agriculture as this was a huge export for the country. India has about 12 million new young people enter its job market each year and finding jobs for this vast quality of people is a hinderance for the country and yet another driving factor for lower growth. India expects the initial impact of their tax reform to be over and now they will see a stabilization of their economy. It is believed their economy will now grow in small increments due to this stabilization.

The term financial globalization can be defined as the integration of various financial markets of countries across the world. In other terms, it means the mobility of finance across various countries without encountering any barrier. Therefore, financial liberation is not sufficient enough parameter for globalization. Financial globalization advocates for development of a single currency worldwide currency that can be regulated and managed by a single global monetary institution.

It is estimated that India will remain growing at levels around seven percent in 2017-2018. This growth is being stimulated by further market freedoms and reforms addressing India’s ease of doing business, as well as an active Government of India-driven campaign to increase local manufacturing, grow the agricultural sector, and attract greater levels of foreign direct investment.

The financial markets are increasingly and highly interconnected, which means that the regulation of the financial services is becoming globalised as well, since most of the bigger firms operate all over the globe, the standardization of the regulation is a very common practice nowadays, making very difficult especially for developing countries keep up with the regulation. The financial crisis of 2008 was one of the most devastating and longest crises the contemporary world has seen, after the crisis a set of reforms, institutions and regulation were created, to avoid this happening again.

India with about 1.2 million populations and china with about 1.3 billon population are two big demographic and emerging countries in the world .Over a past few decade India’s combination into the economic has been accompanied by remarkable economic growth (World Bank 2011¬).India is having the 3th position on the economy in purchasing power parity (PPP) terms (The Economic Times, 2012). India’s total GDP (gross Domestic Product) growth was 5.5% in 2012 and inflation rate is was .........(The Economist, 2012) .According to government of India poverty has been decline from 37.2% in 2004 to 29.8% in 2010 (world bank 2011).The major economic growth sectors

The global financial crisis of 2008 was the most severe financial crisis that the world had experienced since The Great Depression of 1930s. Due to the recession, the Foreign Institutional Investors (FII’s) had disinvested in the Indian market to meet their commitments abroad. This had lead to an increase in the supply of shares in the stock market without a similar rise in demand to offset it. The present study is aimed at showing that this lack of demand for shares in the stock market is one of the reasons for the stock prices to fluctuate in India. In India

The developing countries like India face the big task of finding decent capital in their development efforts. Most of those countries find it troublesome to urge out of the vicious circle of poorness of low financial gain, low saving, low investment, low employment etc. With high capital output quantitative relation, India desires terribly high rates of investments to form success in her efforts of accomplishing high levels of growth. Since the start of

Asian crisis – premature financial liberalisation and timing. Govt planning to improve investment qualities, create an enabling environment. India’s five yr plan – investment heavy plan in line with harrod domar model.

India’s primary sector has helped boost the economy. The employment level, due to the Five Year plan, has increased in the sectors of forestry, fishing and logging. The uncertainty of climatic conditions, has forced a strong shift into the secondary and tertiary sectors. The manufacturing output climbed to 9.3% in the previous quarter while finance and insurance services growth has had an increase to 9.7%. The growth of the financial sector has been a direct result of the reforms in place that boomed the stock market, assisting large firms finance their expansions.

“The rapid expansion of international financial market since early 1980s have integrated the world economy”. Discuss.

India and South Africa are members of the five major emerging economies. They are both developing countries however, they are well distinguished for their large democracy, fast-growing economies and significant influence on regional and global affairs. This report aims to comparatively analyse whether India or South Africa is in a better position to succeed in the global economy. For the purposes of this report, I will be comparing and analysing each country’s political and economic environment and also looking at the environment for foreign direct investment in order to determine whether India or South Africa is in a better position to succeed.

India, whose name is derived from the River Indus, is moving forward and away from its traditional agricultural economy which has been undertaken for decades, and with an approximate population of 1.2 billion people, the second-most populated country in the world, is categorized as an emerging economy. The term emerging markets was first put down by economists at the International Finance Corporation in the year 1981, when the group was endorsing their first mutual funds in evolving nations. References to emerging markets have become popular in the media, annual reports, documentation, foreign policies and investment fund prospectuses since then.

With the globalization of trade and free movement of financial assets, risk management through derivatives became a necessity in India. In the early nineties in India the economic liberalization provided the economic rationale for the introduction of forex derivatives. Many business houses actively approached foreign markets not only with their products but also as a source of capital and direct investment opportunities. In 1993 there was limited convertibility on the trade account so the environment became more conducive for the introduction of these hedge products. The development in the forex derivative market was carried parallel along with the steps taken to reform the Indian financial market. In 1992 FII’s were allowed to invest in Indian equity and debt markets and in the following year foreign brokerage firms were allowed to operate in India. NRIs (non-resident Indians) and OCBs (Overseas Corporate Bodies) were allowed to hold together around 24% of the paid-up capital of the Indian companies and it was further raised to 40% in 1998. The Indian companies were encouraged to issue ADRs/GDRs in 1992 to raise foreign equity. An Indian entity was allowed to make investments in overseas joint ventures and wholly owned subsidiaries to a limit of US$ 100 million during one financial year. Investments in Nepal and Bhutan were allowed to a limit of INR 3.5 billion in one financial year. Companies located in Special Economic Zones can invest out of their balances