b. Privatization's Impact on International Investment Banking
All international investment banks compete fiercely for share issue privatization mandates, for two principal reasons. First, because the offerings are so large and so visible--and are almost always designed to help promote the market's capacity to absorb subsequent stock offerings by private companies--these are very prestigious mandates. To date, the large US and British brokerage houses have had the most success in winning advisory and underwriting mandates, though all countries that launch large-scale SIP programs tend to favor local investment banks as "national champions" to handle the domestic share tranche. The second reason banks compete so fiercely for SIP mandates is because they can be extremely profitable. In spite of the fact--documented by Jones, et al (1999) and Ljungqvist, et al (2000)--that SIPs have significantly lower underwriting spreads than private sector offerings, their sheer size and lack of downside price risk make them very lucrative for underwriters.
2. Will this growth continue throughout the 2000s?
As we indicated above, the global capital market has grown so rapidly in recent decades cause of the privatizations rise. Privatizations increased the market liquidity. Now we have already stepped into the 21st century. I believe that the growth will continue for the following reasons. First, most of the south-east Asia countries have recovered from the 1997 financial crisis. For these countries, they now have the capital to do businesses. And they get back on the fast growing track. Second, by the end of 2001, world's biggest developing country, China, has entered the WTO (World Trade Organization). This is real great news. As we all know, today's China takes a serious position in world's economy. Its innovation and opening policy make china keep achieving high GDP growth rate. This drives the global capital market keep growing.
Summary and Conclusions
This essay examines the impact of share issue privatizations (SIPs) on the growth of world capital markets (especially stock markets). I begin by documenting the increasing importance of capital markets, and the declining role of commercial banks, in corporate financial systems around the world. I then show that privatization programs-- particularly those involving public share offerings--have had a dramatic impact both on the development of non-US stock markets and on the participation of individual and institutional investors in those stock markets.
This has told the reason of the fast growth of global capital market. And then I succinctly indicated the continuance of the rapid growth, the great future.
The last but not the least is the recommendation. I can confidently assert that, if executed properly, a series of share issue privatizations can indeed promote the growth of global capital market, which will yield economic and political dividends for many years to come. That means there is a need to encourage the development of SIPs in order to gain growth of global capital market.
浅谈非语言交际中的身势语
话语分析二十年