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Understanding Foreign Currency Exchange Market Conventions

Familiarizing with the conventions of foreign currency exchange market will help avoid confusions with the terminologies involved.

Average people are accustomed to think of a currency as a medium of exchange while assuming that it has a natural value. On the other hand, Forex dealers think of a currency in terms of a particular currency pair. This approach often leads to misunderstandings when a novice is trying to read currency exchangegraphs or to calculate the proper value of a foreign currency exchange transaction. Actually, the Forex market terminology is not so difficult to understand if you are equipped with proper market conventions.

First of all, the currency exchange rates always involve a currency pair. The exchange rates are presented in the form of two rates, namely a bid price and an ask price. Thus, the quote GBP/USD 2.1034/40 means that that a dealer accepts to pay one British pound for 2.1034 U.S. dollars, while he is willing to accept deals to sell one British pound for 2.1040 U.S. dollars. In this case, the British pound is the base currency, which must be placed on the left hand of the rate according to market convention. . In addition, the U.S. dollar, which represents the quote or term currency in this quotation, is placed on the right hand of the quotation. Many financial centers around the world use market convention in which the order of the base and the term currency is as follows : EUR – GBP – AUD – NZD – USD – others. Furthermore, there are also direct and indirect quotations. Direct quote is a quotation in which the exchange rate is in the format GBP 0.4573 = USD 1.0000. On the other hand, the indirect quote uses the format 1 GBP = USD 2.1040.

Switching between direct and indirect quotes can be confusing for novice market observers because if the British pound is appreciating, the left hand rate of the direct quote will decrease, and vice versa. A common market convention is to quote foreign currency exchange rates to four decimal places. However you can see also exchange rates quoted to five, three or two decimal places.

Other market conventions include methods of conducting deals on the Forex market. A spot transaction is a deal in which the two parties make a contract involving a particular exchange rate and amount to be transacted on the spot value date. On this date, the deal is finalized and the two parties exchange the agreed amount of the two currencies at the agreed exchange rate. According to market conventions, the spot value is two business days from the date of the transaction.

These are the basic market conventions you should be familiar with when reading Forex news and analysis or conducting a basic research on the foreign currency exchange market. The Forex market terminology related to different types of deals or derivatives is much more sophisticated, but there is no need to familiarize yourself with it unless you are planning to enter the Forex market as a professional dealer.

Market Analysis

History of the Japanese Stock Market

As Japan begins it’s slow recovery from the 2011 Earthquake and Tsunami that lay waste to so much of the country’s homes and industry, there is a fierce debate raging as to the long term impact that the disaster (and its aftermath) will have on the Japanese economy. It is therefore, perhaps and interesting point in time to take a look at the history of the Japanese Stock Market.

Japan is one of the world’s largest economies and most important financial hubs. The principal exchange on the Japanese stock market is the Tokyo Stock Exchange (TSE), which is the third largest in the world by market capitalisation (i.e., the value of all outstanding shares of all companies on the exchange) behind only the Americo-European stock exchanges, NYSE Euronext and NASDAQ OMX. It is the largest in Asia and the Pacific region, ahead of both China and Hong Kong. Trading through the TSE is reported by two primary indexes, the Nikkei 225 and the TOPIX. In addition to the TSE there are currently four further stock exchanges operating from other Japanese cities: Osaka, Nagoya, Fukuoka and Sapporo.

The Tokyo Stock Exchange was founded as the Tokyo Kabushiki Torihikijo on May 15th 1878 by Japan’s Finance (later Prime) Minister Okuma Shigenobu together with the prominent businessman Shibusawa Eiichi, however it didn’t begin trading until 1st June the same year. At the time, many of Japan’s largest cities held their own stock exchanges and it wasn’t until after the Second World War that it became the central market place for the Japanese economy that it is today.

The stock exchange actually merged with those of other Japanese cities in 1943, as part of the war effort, to form the consolidated Japanese Stock Exchange (JSE). However, following the Allied bombing of Nagasaki on August 9th, 1945 the infant stock exchange was shut down for four years. The passing of the Securities Exchange Act reorganised the exchange however, and on May 16th 1949 it was re-opened as the Tokyo Stock Exchange alongside two others in Osaka and Nagoya. That year also saw the founding of five other exchanges across Japan: Kyoto, Kobe, Hiroshima, Fukuoka and Niigata whilst the following year the Sapporo Securities Exchange was created.

Shortly after the TSE’s inception, on September 7th, 1950, the Nikkei 225 index was introduced by the country’s leading Nihon Keizai Shimbun newspaper to index the TSE’s top 225 performing companies, retrospectively providing data from the entire post war history of the exchange.

The end of the 20th Century initially saw the value of the TSE’s companies flourish leading to a rapid rise in the exchange’s market capitalisation. The period between 1983 and 1990, in particular, was one of extensive growth, by the end of which the TSE was by far the largest exchange in the world with 60% of the entire world’s stock exchange market capitalisation. The zenith came on December 29, 1989, when the Nikkei hit all time high at an intra-day price of 38,957.44. This growth couldn’t be sustained through the economic troubles that were to follow though and during the ’90s the value of the market fell away. By March 10, 2009 the Nikkei 225 even fell as far as 7,054.98, 81.9% below that high 20 years earlier.

Japan’s Stock Market underwent a considerable re-organisation in the opening year of the 21st Century; on 1st March 2000 the Hiroshima and Niigata exchanges were both merged into the TSE whilst the Kyoto exchange was concurrently merged into the Osaka Securities Exchange to leave the three exchanges that exist today (Kobe had closed in 1967).

In the final year of the 20th Century, on April 30th, the TSE itself witnessed one of it’s most significant developments as the trading floor closed for the last time. At that moment the switch was made to electronic trading. The TSE Arrows complex was opened shortly afterwards on May 9, 2000 to replace the old trading floor and provide a symbol of the new era whilst being a facility for the exchange of information and face-to-face contact.

The incorporation of technological solutions through the exchange has not gone entirely smoothly, however. On November 1, 2005 bugs hit Fujitsu’s transactional system which was only able to operate for trading for 90 minutes during the entire day. TSE’s systems were also alleged to be partly accountable for allowing mistakes by employees at both UBS Warburg and Mizuho (each selling c600,000 shares at 1yen a piece rather than 1 share at c600,000 yen) resulting in loses running into the hundreds of millions of yen for both companies. In the latter case, the affair even brought about the resignation of the TSE’s CEO and two other executives.

The TSE and therefore the Japanese stock market in general continues to develop and look for new opportunities, especially building alliances with other exchanges throughout the world. The TSE has formed a partnership with the London Stock Exchange (LSE) in the UK to jointly investigate products, services and technologies which may benefit both parties. In particular the LSE has been helping the TSE in the last few years with the establishment of a Japanese equivalent to the LSE’s Alternative Investment Market (AIM). There have also been tentative explorations into emerging exchanges in the East including a 5% share purchase in the Singapore Stock Exchange (SGX).

The long term impact of the recent Earthquake and Tsunami which hit Japan are still to be seen. In the immediate aftermath (on Mar 15th) the Japanese markets closed 10% down (the lowest since April 1st 2009) whilst the Bank of Japan injected a massive 15 trillion yen into money markets in the hope of stabilising them.

Both the physical and economic impact was felt worst in the north of the country whose chiefly manufacturing industries account for 8% of Japan’s GDP. Corporate giants such as Toyota, Nippon and Sony were forced to temporarily suspend production in the wake of the disaster and the subsequent logistical difficulties the country has faced (e.g., power cuts). With the overhanging nuclear threat, some multinationals are even moving their staff abroad.

The total cost of the earthquake is estimated to run into tens of trillion of yen. However, there is still much debate as to whether the disaster will significantly damage the market or even as some have suggested, boost Japan’s economy as businesses across the country get stuck into the rebuilding process. Depending on which point of view you take you may even find that this is the opportune time to consider making an investment in Asian Investment Funds.

Market Analysis

Social Media Marketing And Market Research Company

Online marketing has been one of the primary methods of marketing to achieve success in business. But online marketing can work only when, it reaches to the right audience who could be interested in the products or services offered by the company. To achieve this, products or business are promoted through the social media channels to grab the attention of various people. This way of marketing through social media channels is called social media marketing.

Social media channels like Digg, Stumbleupon, Facebook, Twitter and various blogs have huge visitors and hence marketing through these social media channels can expose the product or services to a wide range of people. This is one of the low cost marketing strategies which can help in driving huge traffic and links to the website. These links and traffic in turn help in increasing the leads as well as get better rankings in search engines which are very crucial for the success in business.

Social media marketing has redefined the whole method of online marketing. It has turned out to be an efficient means of reaching out to various people. With social media marketing, the product is exposed to a wide social media, thus the fuss of building a huge email list and sending bulk emails is eliminated. Moreover, the marketing done through the social media channels reach out at a faster speed to millions of customers.

Social media marketing works best for small and medium businesses who are trying to enter the market, as well as big businesses who want to make a niche in the market. Social media marketing has been gaining huge recognition and is widely used by most organizations. A number of companies are developing innovative ways of social media marketing to progress in their business. Business organizations are considering key role, social media marketing plays in making the business prosper and hence allocating budgets for it.

In order to simplify social media marketing, various tools have been developed. One such tool is Reach 2.0 by infoAnalytica. Reach 2.0 is a better alternative to the traditional web marketing and lead generation concepts which provides the users with extensive reach within the target audience. Reach 2.0 increases the exposure and leads to the site which in turn help in increasing the sales thereby making the business flourish.

Reach 2.0 reduces the costs associated with traditional marketing and also simplifies the task thus eliminating the necessity of cold calling, email campaigning etc. Reach 2.0 mainly aims to reach out to the target audience. The buzz creation implemented through it drives more users who in turn drive heavy target audience thus increasing the exposure to the website. Reach 2.0 uses various social media channels like Facebook, LinkedIn, blogs, micro-blogs, online forums, groups and web portals and keeps the end users engaged through conversations.

Market Analysis

Introduction to Yiwu International Trade City And Yiwu Wholesale Market

There is large no. of wholesale markets in the world. Each one is well known for its specific range of products. Each of this market has its unique rules and regulation to make any kind of business deal of importing any products or starting wholesale business of products for which it is famous for. When it comes to importing or exporting products from any specific country or state, there are plenty of procedures you need to follow and cycle of rules which you have to consider before making any deal. China is well known for its different wholesale market and its products which are being exported to different countries in the world. Here I want to discuss about Yiwu market which is located at middle of the Yiwu city in china.

As we all know that government of china is being very friendly to develop business relationships among different countries. There are also so many manufacturing benefits which encourage foreign investors to start importing products or starting their own manufacturing unit in china. Well we are not discussing about manufacturing benefits, let’s focus our discussion on Yiwu market

As I have explained previously, it is located at the heart of the Yiwu city. The city has great history of its king and they have left remark on the infrastructure of the city. The thing that I like most about the city is its culture which reminds me of its great history and modern infrastructure development which is the mark of its economical growth. Let’s have brief view about the international presence of Yiwu market and its economical growth.

The market is divided in the various sub market according to the various types of products. There is a place from small product to large products in Yiwu market. As I have said the place is divided in sub markets like textile, art and craft, stationary, stock market, tools and toys market. Stationary and handicraft are the products for which it is known for. This way you will have almost all things in one place if thinking about starting your own wholesale business.

There are around 25 to 30 thousands factories and more than 10,000 showrooms of different wholesaler companies. Every year there is a growing digit in foreign buyers and agencies to trade from Yiwu market . Most of all products directly come from supplier so you can have lowest competitive rate no matter in how much quantity you purchase the products. You can also outsource all your products by having your own manufacturing unit in china and get all the benefits as like local Chinese companies. There is no minimum limit on the quantity of the products that you need to purchase. After discussing about its financial presence let’s talk about legal exporting procedures.

You may be bothering about some of the issues like trading procedures, hotel booking, questions regarding to various products and its quality and other required services. If you really want to jump into business then you do not need to worry much. There are some professional trading companies which will provide you professional agents who will help you out through the entire procedure from hotel booking to trading procedures. They will help you in any kind of your issues in making successful business deal on which you get 100 % satisfaction. So this way regarding to its manufacturing benefits and trading facilities, you must consider Yiwu market for importing product from china.

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Market Analysis

Significance of Market Research in The Existing Scenario

The idea of market research has found unprecedented growth in the times of recession. Such researches are fruitful in boosting sales of existing as well as new products. Proper research and planning is an integral part of a successful business venture.

Basic Concept of Research

Market research is basically the process of collecting and analysing essential data which is related to certain products and services. It is one of the best and proven methodologies adopted by businesses to meet tough competitions in the markets. The basic concept that underlies beneath the fact of such researches is to understand the needs and requirements of the target audience. It is only when the needs of the target audience is met, that businesses achieve its goals.

The Necessity of Market Research

Studies have proved the importance and necessity of researches conducted through various ways to understand the existing market scenarios. Some of the most important reasons for conducting market research involve the following:

Multiply profits: With the help of such researches, it is possible to analyse different methods to maximise profits. By maximising profits, the company can assure of its long life and increased revenue.

Appropriate decisions: Market research helps companies to take the right decision related to products and services. The entry of new products and its considerable effects on the consumers can be analysed in a productive manner with the help of these researches. It is also easy to analyse the preferences of the consumers and whether their needs are being satisfied with the products or not.

Face competition: Tough competitions can be faced through effective market research. Different aspects of the competitors such as their type of operations, identity, target audience and strategies can be analysed effectively which can prove beneficial for businesses to meet their goals.

Maximise sales: Profits can be maximised by increasing sales which is only possible through market research. These researches pave way for a better understanding of existing market scenarios and the consumer behaviours.
bbThe sole purpose of such research involves identifying the target audience. Different types of researches conducted by businesses help to achieve their goals. The marketers then launch the products to meet the necessities of their target audiences.

Understanding the Types of Market Research

Every business organisation requires an effective market research to improvise their existing products as well as to tap the markets for better opportunities. Profit is the ultimate goal of any business venture which can be maximised with the help of effective researches. There are different methods of conducting researches which are explained briefly in the following sections.

The two main types of research include the primary research and the secondary research. Among the two the primary research is more effective as it involves collection of data directly from the consumers. However, the primary research is further categorised into two- the quantitative and the qualitative research.

The secondary research involves analysing data which has been collected by other sources for various purposes. This is quite an inexpensive method of market research. Nevertheless, businesses can adopt different methodologies to achieve its purpose of maximising sales and profits.