Those corporations involved in manufacturing and delivering/selling the products and services in multiple
nations simply is known as a multinational corporation. The main attribute of such a corporation is that
they include the home nation where the origin or the headquarter of the corporation is situated and the
host nation where they have their branches, franchises, etc. in other nations. Talking about Walmart Inc.,
it is one of the multinational corporations in the retail industry operating in 26 nations including the United
States, Canada, the UK, China, Chile, and others having the headquarter or its home country in the
United States (US).
Spot market in foreign exchange by Walmart
            Unlike the forward or future markets, where the contract between two parties happens at the
current time but delivery or payment in the future, in the spot market the trade of currencies, goods,
services, commodities, or securities happens in the immediate exchange. In other words, in the spot
market, the delivery and payment are done on the spot using the spot price or rate (CFI, n.d.). It has been
given that Walmart recently opened two retail stores in Shenzhen, the city of China which sells the
products bought locally as well as globally through imports. The decision to buy at local or to import lies
within the strategy of Walmart. However, when Walmart purchases products from other nations, it
requires the trading of currencies other than the Yuan (Chinese currency) involving foreign exchange
transactions. Hence, it is obvious they need to use the spot market in foreign exchange when they import
products. Suppose Walmart bought products from Singapore using a spot market that aids in converting
the currency that is from Yaun (Chinese currency) to Singapore dollar (SGD, Singapore currency). If the
spot rate is 0.21 SGD per Yuan which is cheaper than Chinese currency, there is likely to have a surplus
or excess gain in Walmart in China when they purchase from Singapore, which they can remit back to the
US using the spot market that helps in converting the Yaun into US dollars. Moreover, they can determine
the cross exchange rate to know the amount or rate of one foreign currency of another (Madura, 2018).
Similarly, purchasing from locals in China and using a spot rate would be better when there is a high
possibility of Yuan (Chinese currency) being appreciated in relation to the US dollar in the future, and
hence the excess revenue can be remit back to the parent in the US making it more profitable.
International money markets utilization by Walmart
             When Walmart expand their outlets and if it is establishing another store in Asia then, they
require to raise fund in the currency where they have envisaged their earnings (Asian currency). Thus, the
international money markets can be used by Walmart to meet their short-term funds for working capital or
operation. Using the international money market, they can borrow funds denominated in a foreign
currency from their home currency (US dollar) that helps them meet the short-term financing need to start
their branches in any nation other than their home nation (Anonymous, 2021). Since they are establishing
in Asia, they can use the Asian money market to borrow short-term funds or borrow in the currency that
has a lower interest rate, or in the future, it is expected to depreciate its value in relation to the US dollar
(home currency). Therefore, this would lead Walmart to be in less burden as in future they could pay back
easily from the good amount of revenue generated from that store and also can remit back to the US
(home nation) in case of surplus, however, there is always a risk of fluctuating exchange rate.
International bond market use by Walmart
            Bond is the kind of securities that are issued by a government or large corporations trading
publicly in order to raise a large amount of funds as needed for carrying out their new business plan or
operations. So, using the international bond market, Walmart could raise capital or fund to establish its
new outlet in the foreign markets issuing the bonds in a foreign country or currency. They can issue
different types of international bonds such as euro bonds denominated in numbers of foreign currency,
foreign bonds issued in the domestic market by foreign corporations or governments, global bonds issued
in both international and domestic markets (Kukaala, 2015). It would be beneficial for the company to
issue bonds in the foreign market with a currency expecting to depreciate or having a lower interest rate.
Thus, one of the popular bonds prevailing in the foreign market for attracting funds is the Eurobond as it
avoids some disclosure as well as a registration requirement. Not only that these bonds can be issued at
low cost and also in a quick manner and hence, many multinational corporations of the US such as Walt
Disney, McDonald’s are using such bonds as a means of raising funds (Madura, 2018). Furthermore,
these bonds have annual coupon payment as well as callable or convertible features making the issuer at
power to call back if the market interest rate declines drastically. They also have a secondary market
where the sellers and buyers can sell or buy the bonds accordingly. Hence, for Walmart, the bonds
issuing at the low cost or at the currency having lower interest rate or expected to depreciate in
comparison to home currency would be profitable to use as a source of funds as well as to pay them
back.