Would Partial Acquisition Of Foreign Investors Be Worthwhile For Banks Finance Essay - Free Essay Example

Sample details Pages: 5 Words: 1463 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Since 2005, the wave of foreign investment in Vietnam banking sector has started booming. However, most of investments are partial acquisition as Vietnamese regulation does not allow for foreign investors to capture more than 30% of stake in commercial banks, and for individual strategic investor the maximum is 15%, any individual strategic investor of 20% stake needs governmental approval. Since then, there have been 12 partial acquisitions in Vietnamese commercial bank sector. Don’t waste time! Our writers will create an original "Would Partial Acquisition Of Foreign Investors Be Worthwhile For Banks Finance Essay" essay for you Create order Most of tier 1 commercial banks (in term of chartered capital) now have foreign investment in its stake. This paper is designed to exam the impact of foreign partial acquisition on Vietnamese commercial banks performance and share price after acquisition. This can be used as precedent cases for other joint stock commercial banks to look at when they want to raise capital through issuing shares for foreign investors. It is noteworthy that the Vietnamese Government requires all commercial banks in Vietnam to have minimum chartered capital of VND3 trillion by the end of 2010. However, to date there are still about 28 joint stock commercial banks out of 38 commercial banks have not meet the requirements on minimum chartered capital. And most of them are now interested in selling stake for foreign strategic investors to increase its chartered capital. Research aim/ objectives and Term of reference The aim of this paper is clearly stated in the title which is to exam if partial acquisition of foreign investors worthwhile for Vietnamese commercial banks, at the aspects of share price and post financial performance. Thus, its objectives are to answer the following questions: If partial acquisition would cause share price of targets (Vietnamese commercial banks) to fall or rise around the announcement of acquisition If partial acquisition improve or worsen the financial performance of targets after acquisition In order to achieve the research aim and objectives of this research paper, the term of reference set for this paper would be: Review the literatures on share price analysis around the acquisition announcement period, and on performance analysis after acquisition to find out how they would change Looking at more specific case of Vietnamese joint stock commercial banks, particularly looking at secondary data of share price around the acquisition announcement and financial performance before and after acquisition Initial literature review Review for acquisition/partial acquisition Acquisition is the takeover of another firms assets or stock (acquiring/target firms). This is stock/assets for cash transaction. In the acquisition, the acquirer firm will become the owner/shareholder of acquiring firm. The acquisition can defined as hostile takeover or friendly take over. Mikkelson Ruback (1985) defined partial acquisition is the purchase of more than 5% block of shares. Akhigbe, and others (2004) also defined partial acquisition as the acquisition of less than 50% of targets ownership. Meyer and Tran (2006) postulates that not many scholars pay attention in the important of partial acquisition. Some empirical studies on the important of partial acquisition as the entry mode when firms enter emerging/transition markets can be found in the works of Barkema Vermeulen, 1998; Chen Hennart, 2004; Duarte Garcia-Canal, 2004; Meyer Tran, 2006 It is notheworthy that in studies of Barkema vermeulen (1998), the result shoe that partial ownership (partial acquisi tion) is favoured in high risk countries and in countries that impose legal restrictions on foreign ownership. This can explain the growth of foreign partial investment in Vietnamese banking sector. Review for share price analysis Mikkelson and Ruback (1985) investigated and analyzed the share price of 473 companies in the U.S. during the period of 1978 and 1980. Their findings show the increase in share prices of target firms after the announcement of partial acquisition. Jensen and Ruback(1983, cited in Cheung at el, 2009) review 13 studies on the abnormal returns around takeover period and found that the average excess returns on stock price are of 30% and 20% for the successful tender offer and mergers. The studies in 1990s yet show contradicting result. Frank et al (1991, quoted in Cheung at el, 2009) shows no evidence to support earlier argument of the increase in abnormal return of target firm after three years since the bid date. Moore (1997) also studied on acquisition transactions of banks during June 1993 and July 1996. Moores study indicates that the share prices of target banks had all negative return associated with the likelihood of being acquired. According to study (2009) of Cheung and ot hers on listed companies in Asia during 1990s, the target firms price responses (in term of CARR) (-2.5%) in the period before the announcement, and (-5.2%) in the period after announcement. The difference between studies in 1980s and 1990s is shown. This paper will investigate whether the recent studies (1990s) hold for partial acquisition in Vietnamese commercial banks. Review for post performance Madden (1981), and Mikkelson and Ruback (1985) studies had shown the positive effect for target firms after partial acquisition in U.S market (quoted in Zhu and others, 2010). However, the later studies and research in 1990s shows different point of view. The later study of Eyssell (1990) shows no significant change of target firms partial acquisition post-performance in US. Another studies of Longhran and Vijih (1997) also come to the same view that acquisition resulted in significant negative performance over time for the acquiring firm. And that is the research gap on post performance of partial acquisition. It seems that the post performance of partial acquisition will be different among various industries and various timing. This paper will exam the post performance of target firms in emerging banking sector in Vietnam in order to see how the performance affected after partial acquisition. Intended methodology To answer the research questions mentioned above, the research will be based on positivism stand with secondary data being collected for the purpose of analysis on share price and post performance. And it will be comparative design. The analysis will be based on cross-sectional analysis which will compare the share price and performance of target firms before and after acquisition; and the share price and post performance of target firms with those of relevant commercial banks with no foreign partial acquisition The secondary data will be collected from reliable sources i.e banks websites, stock exchanges websites, other possible sources such as State Securities Commissions, Ministry of Finance. the sample sizes will include total 12 partial acquisition deals of more than 10% stake in Vietnamese commercial joint stock banks . The sample of control group consists of 6-10 commercial banks (where as information is available). Note that, due to limitation in information of share pri ces, the research might not include all stock information of sample commercial banks. For share price analysis, all stocks that are unlisted will be eliminated from the sample size. Up to date there are only 8 listed commercial banks, of which 3 commercial listed banks will be in control group sample. The share price of 2 listed banks with partial acquisition will be analyzed . It excludes 3 others listed banks with partial acquisition because those were listed on stock exchange after 1-2 years of the acquisition date, and with these cases, the share price analysis before and after acquisition can not be measured. The analysis on share price would be based on the AAR (accumulated abnormal return). For performance descriptive analysis, this will be based on financial ratios for banks to avoid the difference in years before and after the acquisition taken place. Those ratios are: ROA, ROE, liquidity, net gearing, cost to income ration, loans to total asset ratio, credit risk, diver sity earnings, off-balance sheet, loan to deposit After the analysis on share price and financial performance through the calculation of ratios, T-test will be conducted to test the relationship between financial performance before and after acquisition, and also post performance with other commercial banks having no partial foreign acquisition The result of this research considered to be valid as the choice of sample is considered to be appropriate and representable with appropriate analysis technique. Data present in the tables is also considered to be reliable since data are collected from reliable sources and audited financial statements. Thus, if the research is repeated, the consistent results are expected. Timescales The research and reading from this project will be started from December but not intensively. The intensive work will be taken place in mid February 2011, and to be finished in mid August 2011, about two weeks earlier than the expected deadline in end of August 2011. Below is the gantt chart specifies the timeframe for this projects Timetable for thesis work (Unit: days): Reference Zhu, PengCheng, Jog, V., Otchere, I. (2010) Partial acquisition in emerging market: A test of the strategic market entry and corportate control hypotheses. Journal of Corporate Finance. doi:10.1016/j.jcorpfin.2010.09.003 Hannan, H. T., and Pilloff, J. S (2009) Acquisition Targets and Motives in the Banking Industry. Journal of Money, Credit and Banking, Vol. 41, No. 6, pp.1167 1187 Akhigbe, A., Madura, J., and Spencer, C. (2004) Partial acquisition, corporate ocntrol, and performance. Applied Financial Economics, Vol. 14, pp. 847 857

CalChamber Where Advocacy Meets Compliance Employee...

Employee Handbook Having the urge of in need of an employee handbook due to employee and employer issues; had leaded me to read case studies and professional websites that explain the importance of an employee handbook and how to create one. I have searched for mandatory and recommended policies that an employee handbook should include. I have found legal information that we need to know in the state of California. I have learned the purposes and choices of creating an employee handbook. One of the case studies I read explained that documentation made the difference in their company. Another case study had an employer failed to distribute the revised policy to its current employees leading to consequences. I also read articles with†¦show more content†¦An employee handbook protects the business and its employees. (Gail Cecchettini Whaley) 2013 Labor Law Center California businesses need to know the California law. The California law does not require an employee handbook for businesses, but it does recommend the businesses to require an employee handbook. There many reasons why an employee handbook is needed. An employee handbook is mostly to prevent any type of misunderstandings, any unfair termination and unwanted lawsuits. Acknowledgement of a handbook is an extremely important process. All employees should have acknowledgement of receiving an employee handbook, and any changed policies that the business makes. (Kelly Petersen) 2011 Legal Flip: Employee Handbooks- An Overview The purpose of an employee handbook is for a company to keep a blue print of policies and procedures that are needed for a company to succeed. A handbook contains of a title page, a table of contents, a body, an index, and most importantly an acknowledgement. An employee handbook is based on main polices a company have. Some the policies include at will employment, hiring rules, anti-harassment and anti-discrimination rules, compensation, employed hours, leave of absence, benefits, heath, safety and most importantly disciplinary. (LegalFlip) protects the author of the article: Employee Handbooks – An Overview (2013) Rocket Lawyer It is always smart to create an employee handbook in any type of business. The

Rabindranath Tagore free essay sample

Rabindranath Tagore [pic]Rabindranath Tagore was born in Calcutta, India into a wealthy Brahmin family. After a brief stay in England (1878) to attempt to study law, he returned to India, and instead pursued a career as a writer, playwright, songwriter, poet, philosopher and educator. During the first 51 years of his life he achieved some success in the Calcutta area of India where he was born and raised with his many stories, songs and plays. His short stories were published monthly in a friends magazine and he even played the lead role in a few of the public performances of his plays. Otherwise, he was little known outside of the Calcutta area, and not known at all outside of India. This all suddenly changed in 1912. He then returned to England for the first time since his failed attempt at law school as a teenager. Now a man of 51, his was accompanied by his son. On the way over to England he began translating, for the first time, his latest selections of poems, Gitanjali, into English. Almost all of his work prior to that time had been written in his native tongue of Bengali. He decided to do this just to have something to do, with no expectation at all that his first time translation efforts would be any good. He made the handwritten translations in a little notebook he carried around with him and worked on during the long sea voyage from India. Upon arrival, his son left his fathers brief case with this notebook in the London subway. Fortunately, an honest person turned in the briefcase and it was recovered the next day. Tagores one friend in England, a famous artist he had met in India, Rothenstein, learned of the translation, and asked to see it. Reluctantly, with much persuasion, Tagore let him have the notebook. The painter could not believe his eyes. The poems were incredible. He called his friend, W. B. Yeats, and finally talked Yeats into looking at the hand scrawled notebook. The rest, as they say, is history. Yeats was enthralled. He later wrote the introduction to Gitanjali when it was published in September 1912 in a limited edition by the India Society in London. Thereafter, both the poetry and the man were an instant sensation, first in London literary circles, and soon thereafter in the entire world. His spiritual presence was awesome. His words evoked great beauty. Nobody had ever read anything like it. A glimpse of the mysticism and sentimental beauty of Indian culture were revealed to the West for the first time. Less than a year later, in 1913, Rabindranath received the Nobel Prize for literature. He was the first non-westerner to be so honored. Overnight he was famous and began world lecture tours promoting inter-cultural harmony and understanding. In 1915 he was knighted by the British King George V. When not traveling he remained at his family home outside of Calcutta, where he remained very active as a literary, spiritual and social-political force. In 1919, following the Amritsar massacre of 400 Indian demonstrators by British troops, Sir Tagore renounced his Knighthood. Although a good friend of Mohandas Karamchand Gandhi, most of the time Tagore stayed out of politics. He was opposed to nationalism and miltiarism as a matter of principle, and instead promoted spiritual values and the creation of a new world culture founded in multi-culturalism, diversity and tolerance. He served as a spiritual and creative beacon to his countrymen, and indeed, the whole world. He used the funds from his writing and lecturing to expand upon the school he had founded in 1901 now known as Visva Bharati . The alternative to the poor system of education imposed by the British, combined the best of traditional Hindu education with Western ideals. Tagores multi-cultural educational efforts were an inspiration to many, including his friend, Count Hermann Keyserling of Estonia. Count Keyserling founded his own school in 1920 patterned upon Tagores school, and the ancient universities which existed in Northern India under Buddhist rule over 2,000 years ago under the name School of Wisdom. Rabindranath Tagore led the opening program of the School of Wisdom in 1920, and participated in several of its programs thereafter. [pic]Rabindranath Tagores creative output tells you a lot about this renaissance man. The variety, quality and quantity are unbelievable. As a writer, Tagore primarily worked in Bengali, but after his success with Gitanjali, he translated many of his other works into English. He wrote over one thousand poems; eight volumes of short stories; almost two dozen plays and play-lets; eight novels; and many books and essays on philosophy, religion, education and social topics. Aside from words and drama, his other great love was music, Bengali style. He composed more than two thousand songs, both the music and lyrics. Two of them became the national anthems of India and Bangladesh. In 1929 he even began painting. Many of his paintings can be found in museums today, especially in India, where he is considered the greatest literary figure of India of all times. Tagore was not only a creative genius, he was a great man and friend to many. For instance, he was also a good friend from childhood to the great Indian Physicist, Bose. He was educated and quite knowledgeable of Western culture, especially Western poetry and Science. This made him a remarkable person, one of the first of our planet to combine East and West, and ancient and modern knowledge. Tagore had a good grasp of modern post-Newtonian physics, and was well able to hold his own in a debate with Einstein in 1930 on the newly emerging principles of quantum mechanics and chaos. His meetings and tape recorded conversations with his contemporaries such Albert Einstein and H. G. Wells, stand as cultural landmarks, and show the brilliance of this great man. Although Tagore is a superb representative of his country India the man who wrote its national anthem his life and works go far beyond his country. He is truly a man of the whole Earth, a product of the best of both traditional Indian, and modern Western cultures. The School of Wisdom is proud to have him as part of its heritage. He exemplifies the ideals important to us of Goodness, Meaningful Work, and World Culture.

Russian Revolution Essay Example For Students

Russian Revolution Essay Today, when one thinks of the communist form of government, they often think of oppression, domination and corruption. We see that people do not have the freedom to their rights and are not allowed to go forth and conquer their goals. However, communism in its pure form appeared to be fair and just. The idea of communism basically formed around the idea of equality. The people under this rule were to have equal land, as well as equal pay. This way there was to be no form of inequality or segregation among them. There are many mixed feelings on the topic of communism, and I myself am not able to tell you just what I think of it. Reading 7.2 actually compared communism to being similar to nazism. Most every country goes through a revolution, in order to sort everything out. There will always be a rise and fall in a countrys history and in 1917 it was Russias turn to revolt. Within this revolution communism was certainly a strong factor, along with the suffering of the I believe communi sm in its pure form to be a good thing. I like the fact that everyone is equal, and allowed equal opportunities thus, no one is of a lower or higher class. Now the only real problem with communism is that people are not born with equal mindsets. Some people are born with the drive to succeed, they want more things in life than what they are given and will work hard for it. Then there are those who feel like what they have is good enough. That is where communism will oppress the people who want to succeed and will be helping out the people who in a normal society would not have had much to begin with. What happened in Russia was certainly wrong, especially since the communism had similarities with nazism. One strong example would be the massacre of the kulaks, who were known as the rich peasants. From reading 7.2 it was quite evident that the kulaks were treated like the Jews in Germany. Its terrible that these people were discriminated against. Technically, if communism was to make each and every being equal then there should have been no discrimination. This though is not possible, for discrimination is a part of life and society. Stalin certainly had many similarities to Hitler, which is why it turned out to be alot like nazism. It is due to what has happened in the past that gives communism such a bad name. Since Russia has been a country where its people have been oppressed we tend to look down upon communism. And this is why, today communism is thought of as pure oppression, Bibliography: