Course Information

Course International Investment

Code IBM556

Level Bachelor Degree

Credit Hours 4

Contact Hours 4

Course Learning Outcomes

At the end of the course, students should be able to:

1. Analyze the roles of financial institutions and capital markets as fund flow
instruments for MNC (PLO6) ( C4 )
2. Demonstrate information retrieval and management in explaining the importance
of international capital markets as mechanism to facilitate international trade and
investment activity (PLO7) ( A3 )
3. Demonstrate good practices and professionalism in order to mitigate risks in
international trade and investment activity (PLO4) ( A3 )

Course Description

This course covers the main principles and mechanics of international investment. It
emphasizes the mechanics of capital market and how it influences investment decision
making process of international firms. It begins with the overview on financial institutions,
structure of capital markets and international investment decision valuations.

Lecturer Zalina Ibrahim

Faculty of Business Management
Universiti Teknologi MARA
Cawangan Sarawak
Phone # : 012-2478356 (H/P) / 082677611
Room : B131 (Samarahan 1)
e-mail : zalinaibrahim@uitm.edu.my
Syllabus Content

No. Topic Total

Hours

1. International Banking and Money Market

1.1. International Banking services
1.2. Reasons for International Banking 6
1.3. Types of International Banking Offices
1.4. Capital Adequacy Standards
1.5. International Money Market

2. International Bond Market

1.1. Foreign bonds, Eurobonds and Global Bonds
1.2. Types of Instruments 10
1.3. Currency Distribution, Nationality and Type of Issuer
1.4. International Bond Credit Ratings
1.5. Eurobond Market Structure and Practices
1.6. International Bond Market Indexes

3. International Equity Market

1.1. Market Structure and Trading Practices
1.2. Trading in International Equities 10
1.2.1.Yankee Stock Offerings
1.2.2.American Depository Receipt
1.2.3.Global Registered Shares
1.3. International Equity Market Benchmarks
1.4. Factors Affecting International Equity Returns

4. International Portfolio Investment

1.1. International Correlation Structure and Risk Diversification 6
1.2. Optimal International Portfolio Selection
1.3. Effects of Changes in the Exchange Rate
1.4. International Bond Investment
1.5. International Mutual Funds

5. International Capital Structure and the Cost of Capital

1.1. Cost of Capital 6
1.2. Cost of Capital in Segmented versus Integrated Markets
1.3. Cross-Border Listing of Stocks
1.4. The Effect of Foreign Equity Ownership Restriction

6. International Capital Budgeting

1.1. Domestic versus International Capital Budgeting 6
1.2. Capital Budgeting from the Parent Firm’s Perspective
1.3. Sensitivity Analysis
Recommended Text

1. Eun, C., Resnick, B. International Financial Management, 8th ed., McGraw-Hill (2018).

References

1. Madura, Jeff, Financial Markets and Institutions, Thomson South Western.

2. Shapiro, Alan, C., & Sarin, Atulya, Foundations of Multinational Financial Management, John-
Wiley & Sons.

3. Eiteman, D., K., Stonehill, A., I., & Moffett, M., H., Multinational Business Finance, 12th ed.,
Pearson.

International Investment (IBM556)

Assessment
Semester March – July 2024

No Assessment Marks Submission

Suggestion
Date*
1 Final Test 30% Week 14
2 Group Assignment: Written report 30% Week 10
3 Individual Assignment 2: Chapter Exercise 20% Week 7
4 Individual Assignment 1: Individual Report 20% Week 5
100%

*Please refer Structure Assessment Mechanism (SAM) MARCH - JULY 2024

 IBM556 (March 2024) Report Details (30%)

Content Marks
Preliminary 5
1. Introduction 10
1.1. What is investment?
1.2. Where can you invest?
1.3. Objectives of an investment (Relate to your assignment)

2. What is Stock Market? 15

2.1. Definition of Stock Market?
2.2. How people earn profit from Stock Market?
2.3. Example of Stock Market, Exchange, and Index
2.4. Identify 6 Malaysian companies worth investing.

3. Investment Process 8
3.1. How to set up investment account
3.1.1.Process Flowchart

12
3.2. What is Bursa Malaysia
3.2.1.List of brokers in Malaysia
3.2.2.How many sectors listed?
3.2.3.At what time does the market open?
3.2.4.Minimum unit required to invest
3.2.5.How to invest in Bursa Malaysia

4. Stock Selection (2 out of the 6 stocks identified) & Reasons for Selecting
4.1. Stock 1 20
4.1.1.Fundamental Analysis
4.1.2.Technical Analysis
4.1.3.Capital Gains
4.1.4.Dividend Gains

4.2. Stock 2 20
4.2.1.Fundamental Analysis
4.2.2.Technical Analysis
4.2.3.Capital Gains
4.2.4.Dividend Gains

5. Conclusion 5
Reference & Appendices 5

In a group of 3 - 4 you are required to make a strategic investment (that can mitigate risks) by
investing in domestic stocks (Bursa Malaysia). The amount of capital required for this investment
will be confirmed by your lecturer. At the end of the activity, you are required to justify why the
investment is made and how much return is achieved.