Minicase San Pico

San Pico is a cursorily growing Latin American developing field. The country is blessed with miles of scenic beaches that have attracted tourists by the thousands in recent years to new resort hotels financed by reefer ventures of San Pico businessmen and m geniusymen from the Middle East, Japan, and the United States. Additionally, San Pico has good natural harbors that argon contributory for receiving imported merchandise from abroad and exporting merchandise produced in San Pico and early(a) surrounding countries that lack access to the sea.Because of these advantages, many new businesses atomic number 18 creation started in San Pico. Presently, stocktaking is traded in a cramped building in La Cobijio, the nations capital. Admittedly, the San Pico Stock Exchange schema is rather archaic. Twice a day an official of the transposition will call push through the make up of each of the 43 companies whose stock trades on the telephone exchange. Brokers wanting to buy or plo w sh bes for their clients then attempt to make a trade with one another.This crowd trading corpse has worked well for over one light speed years, but the government dispositions to replace it with a new groundbreaking system that will allow greater and more frequent opportunities for trading in each company, and will allow for trading the shares of the many new start-up companies that are expected to trade in the secondary market. Additionally, the government administration is rapidly privatizing many state-owned businesses in an attempt to foster their efficiency, obtain unconnected exchange from the sale, and convert the country to a more capitalist economy.The government believes that it would take over this privatization faster and perhaps at more attractive prices if it had a modern stock exchange facility where the shares of the newly privatized companies will eventually trade. You are an expert in the operation of secondary stock markets and have been contain as a con sultant to the San Pico Stock Exchange to offer your expertise in modernizing the stock market. What would you advise? Explain. Most new and renovated stock exchanges are being established these days as either a partly or fully automated trading system.A fully automated system is especially beneficial for a small to medium size country in which there is only moderate trading in to the highest degree issues. Such a system that deserves special note is the continuous national Integrated Market system of New Zealand. This system is fully reckonerized and does not require a physical structure. Essentially all buyers and sellers of a stock enter through their broker into the computer system the number of shares they desire to buy or sell and their required transaction price. The system is updated constantly as new purchase or sale orders are entered into system.The computer constantly searches for a match between buyer and seller, and when one is put up a transaction takes place. T his type of system would likely serve San Picos needs very well. There is existing technology to implement, the bugs have been worked out in other countries, and it would satisfy all the demands of the demands of the San Pico government and easily nurse growth in market activity MINI CASE SARA lee(prenominal) CORP. S EUROBONDS The International Finance in Practice boxed teaching in the chapter discussed a three-year $100 million Euro stick with issue by Sara lee(prenominal) Corporation.The article also mentions other bond issues recently placed by various abroad divisions of Sara Lee. What thoughts do you have about Sara Lees debt financing strategy? Suggested Solution to Sara Lee Corp. s Eurobonds Sara Lee is the perfection candidate to issue Eurobonds. The company has worldwide name recognition, and it has an excellent realisation rating that allows it to place new bond issues easily. By issuing dollar mark denominated Eurobonds to Swiss investors, Sara Lee can bring new is sues to market much(prenominal) more quickly than if it sold domestic dollar denominated bonds.Moreover, the Eurodollar bonds likely sell at a lower yield than comparable domestic bonds. Additionally, it appears as if Sara Lee is raising funds in a variety of foreign currencies. Sara Lee most likely has large cash inflows in these resembling currencies that can be used to meet the debt service obligations on these bond issues. Thus Sara Lee is finding a use for some of its foreign currency receipts and does not have to be concerned with the exchange rate uncertainty of these part of its foreign cash inflows.