Global Capital Markets, business and finance assignment help

Read Closing Case: Industrial and Commercial Bank of China at the end of Chapter 11 in your text. Write a two- to three-page paper, excluding the title and reference pages, with a detailed analysis that addresses the following:Examine why ICBC felt the need to issue equity in markets outside of China. Describe the advantages and disadvantages of such a move.Determine the attraction of the ICBC in regards to providing exchange listings to foreign investors. Provide examples of why investors would be interested.Summarize the risks for a foreigner associated with investing in ICBC. Provide examples of possible risks.In addition to the required text, provide at least one additional scholarly source to support your point. Your paper should be formatted in APA style as outlined in the Ashford Writing Center.Book is Hill, W.L. (2011). International Business: Competing in the global marketplace (8th ed.). New York: McGraw-Hill Irwin.Closing Case is Below: Industrial and Commercial Bank of China In October 2006, the Industrial and Commercial Bank of China, or ICBC, successfully completedthe world’s largest ever initial public offering (IPO), raising some $21 billion. It beat Japan’s 1998IPO of NTT DoCoMo by a wide margin to earn a place in the record books (NTT raised $18.4billion in its IPO). The ICBC offering followed the IPOs of a number of other Chinese banks andcorporations in recent years. Indeed, Chinese enterprises have been regularly tapping global capitalmarkets for the last decade, as the Chinese have sought to fortify the balance sheets of the country’slargest companies, to improve corporate governance and transparency, and to give China’s industryleaders global recognition. Since 2000, Chinese companies have raised more than $100 billion fromthe equity markets. About half of that came in 2005 and 2006, largely from the country’s biggestbanks. Shares sold by Chinese companies are also accounting for a greater share of global equitysales—around 10 percent in 2006 compared to 2.8 percent in 2001, surpassing the total amount raisedby companies in the world’s second largest economy, Japan. To raise this amount of capital, Chinese corporations have been aggressively courtinginternational investors. In the case of ICBC, it simultaneously listed its IPO shares on the Shanghaistock exchange and the Hong Kong exchange. The rationale for the Hong Kong listing was thatregulations in Hong Kong are in accordance with international standards, while those in Shanghaihave some way to go. By listing in Hong Kong, ICBC signaled to potential investors that it wouldadhere to the strict reporting and governance standards expected of the top global companies. The ICBC listing attracted considerable interest from foreign investors, who saw it as a way toinvest in the Chinese economy. ICBC has a nationwide bank network of more than 18,000, the largestin the nation. It claims 2.5 million corporate customers and 150 million personal accounts. Some 1,000institutions from across the globe reportedly bid for shares in the IPO. Total orders from theseinstitutions were equivalent to 40 times the amount of stock offered for sale. In other words, theoffering was massively oversubscribed. Indeed, the issue generated total demand of some $430billion, almost twice the value of Citicorp, the world’s largest bank by market capitalization. Thelisting on Hong Kong attracted some $350 billion in orders from global investors, more than anyother offering in Hong Kong’s history. The domestic portion of the stock sales, through theShanghai exchange, attracted some $80 billion in orders. This massive oversubscription enabledICBC to raise the issuing price for its shares and reap some $2 billion more than initially planned.