For the first time in 9 years, the Federal Reserve has raised interest rates in a move that could make many loans more expensive for companies and Americans.  Speaking today in Washington D.C., Federal Reserve Janet Yellen discussed the Federal Open Market Committee’s decision to raise its Federal funds rate target 25 basis points, making a new target range of 0.25 to 0.5%.

For the first time in 9 years, the Federal Reserve has raised interest rates in a move that could make many loans more expensive for companies and Americans.  Speaking today in Washington D.C., Federal Reserve Janet Yellen discussed the Federal Open Market Committee’s decision to raise its Federal funds rate target 25 basis points, making a new target range of 0.25 to 0.5%.

Yellen emphasized that the Federal Reserve will continue to monitor the economy closely in deciding how many more interest rates will come.  For now, however, the FOMC sees market improvement in the U.S. economy, encouraging the group to raise interest rates in a move that Yellen insists remains “accommodative” to economic growth.

“Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further; however, net exports have been soft,” the FOMC said in a statement, adding that it remains data dependent in its decision to raise rates. “A range of recent labor market indicators, including ongoing job gains and declining unemployment, shows further improvement and confirms that underutilization of labor resources has diminished appreciably since early this year,” the FOMC said.

An Optimistic Outlook

In speaking on the decision, Janet Yellen said that it is a result of a robust and improving economy, which the Federal Reserve has emphasized, has seen improvement steadily throughout 2014 and 2015. “The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective,” the FOMC said.

A Balanced Approach

“While there are risks, the outlook to the labor market and the economy is balanced,” Yellen said, adding that monetary policy works with “lags.” This delayed response to monetary policy spurred Yellen to act now before inflation accelerates.

At the same time, Yellen repeatedly emphasized, “It’s important not to exaggerate the importance of this move,” noting that it is “only 25 basis points.” However, equity markets rose steadily on the news in a sign that there is confidence in the FOMC’s decision and its sign of enduring fundamental strength in the American economy.

The post A Dovish Interest Rate Hike? appeared first on Economy Watch.

Foreign companies, particularly those in the oil and gas sector, that leave Russia over Ukraine-related sanctions may never be allowed to make a return, warned a Russian minister on Thursday.

Natural Resources Minister Sergei Donskoy said that while no foreign firms have thus far signaled their intent to withdraw from projects in the country, there would be severe consequences if any company does do so.

Foreign companies, particularly those in the oil and gas sector, that leave Russia over Ukraine-related sanctions may never be allowed to make a return, warned a Russian minister on Thursday.

Natural Resources Minister Sergei Donskoy said that while no foreign firms have thus far signaled their intent to withdraw from projects in the country, there would be severe consequences if any company does do so.

“Russia is one of the most promising countries in terms of hydrocarbons production. If some contracts are severed here, then, colleagues, you lose a serious lump of your future pie,” Donskoy said, as cited by Reuters.

Thus far, Western oil majors, such as BP and Royal Dutch Shell, have indicated that they were planning to stick with their projects in Russia.

BP Chief Executive Bob Dudley visited Moscow earlier this month and said the company was “rock solid” with its Rosneft investment and that it was “business as usual”.

A few days later, Shell Chief Executive Ben van Beurden also came to Moscow and told President Vladimir Putin the company was committed to expansion in Russia.

 Russia has signed deals with other international majors including ExxonMobil, Eni and Statoil, mainly relating to projects in the Arctic.

Donskoy said that if companies did decide to “diversify their investments” and pull out of Russian deals, “I am sure others wishing to take their places would be found”.

Related: Will Russian Sanctions Compromise Global Energy Security?

Related: Russia’s Finance Minister Warns Of Zero GDP Growth This Year

Related: Moscow Urges Russian Companies To Delist From Overseas Stock Exchanges

Meanwhile, President Vladimir Putin admitted on Thursday that Western sanctions over Ukraine were hurting the Russian economy, though he insisted that the damages were minimal.

The post Russia Warns Leaving Foreign Firms May Never Be Allowed Back appeared first on Economy Watch.

Foreign exchange (Forex) is a type of financial trading in which the currency of a country is exchanged for that of another. With a daily turnover of over $4.9 trillion, the Forex market is the largest financial trading market in the world. 

Foreign exchange (Forex) is a type of financial trading in which the currency of a country is exchanged for that of another. With a daily turnover of over $4.9 trillion, the Forex market is the largest financial trading market in the world. 

One unique aspect of the Forex market today is the lack of a central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world. The market is open 24 hours a day, five and a half days a week across almost every time zone. For instance, when the trading day in the US ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly. 

The forex market started evolving in the 1970s when international trade switched from a fixed rate (set by the Bretton Woods agreement) to a floating exchange rate. Since then, the relative rates of currencies have been determined by buying and selling activity within the international foreign exchange market. When more of a currency is bought, its relative price goes up, and when more is sold its price goes down.

Evolution of Foreign Exchange 

Forex history dates back to the ancient times of the Babylonians. Exchange as a medium was invented since the barter system. The first coins were used in ancient Egypt. Since then, foreign exchange has played a pivotal role in framing world politics and economy. 

Here are some milestones in the history of Forex:

Change in gold standards (1816): The gold standard was used as standard trading unit and had a standard weightage. The British pound was defined as 123.27 grains of gold. The British pound was set as the fixed exchange currency. In 1879, the US adopted the gold standard and replaced the British pound as the new exchange currency.

Bretton-Woods agreement (1944): After WWII, the US emerged as the world’s only stable economy. As a result, the dollar emerged as the new standard of foreign exchange. At the Bretton-Woods conference (1944), the Forex framework agreed that the dollar would be the world’s new exchange unit. The Bretton Woods Accord established the World Bank and introduced the pegging of currencies and the IMF.

Floating exchange rates (1973): The Smithsonian agreement was a flexibility agreement, which was signed in 1971 at Bretton-Woods to let currencies fluctuate. This was a deliberate attempt by the European market to break-way from its dollar dependency. However, the Smithsonian Agreement and the European Joint Float failed in their efforts to do away with the US dollar. By 1972, most European countries initiated the floating value of their currencies. In 1978 and 1993, countries tried to peg their currencies freely but failed. The financial market then introduced a free-floating currency system.

Introduction of the Internet (1994): The forex market remained the prerogative of the banks but the Internet allowed small investors to enter the forex trading market. Online forex trading was introduced in 1994 and brought drastic changes to forex history. Today, the average daily trading volume of the forex market is $3.2 trillion.

Arrival of the Euro: In 2002, the Euro was introduced as the official currency of 12 European nations. The rapid development of the Euro-dollar market accelerated trading in the forex market. Today, the euro is the second most traded currency in the forex market.

How Currencies Are Traded

Currency trading is always done in forex pairs. Of the two currencies constituting a forex pair, one is bought and the other is sold. Together, these two currencies make the ‘exchange rate.’

The most traded currency pairs in the world are called the Majors. The top four currency pairs account for nearly 70 percent of the world’s total daily trade in the forex market. They are: Euro/US Dollar – EUR/USD, Great Britain Pound/US Dollar – GBP/USD, US Dollar/Confoederatio Helvetica Franc – USD/CHF and US Dollar/Japanese Yen – USD/JPY.

A forex pair can be classified to have two components: The Base Currency & the Quote (Secondary) Currency.

In the currency pair EUR/USD, Euro is the base currency, while the US dollar is the secondary currency. If the exchange rate is 1.3214, one unit of Euros can be exchanged for 1.3214 US dollars. Suppose the quote for this pair is 1.3214/16. The first part of this quote is called the ‘bid’ price and the second part is known as the ‘ask’ price. While the former is the price at which traders are willing to purchase, the latter is the price at which they are willing to sell.

In this example, one unit of Euro can be sold to get 1.3214 units of the US dollar. However, one will have to pay 1.3216 units of the US dollar to buy one Euro. Forex pairs are typically traded in lots (the standard being 100,000 units) of the base currency. For the above example, $132,160 will have to be paid for buying €100,000.

The currencies are then traded in four different markets, which function separately yet are closely interlinked.

The Spot Market:

Forex spot-trading involves purchasing one currency with another for immediate delivery. Most of the forex spot transactions are completed within two days as the banks take around 48 hours to transfer the funds.

As the forex spot market functions on the current prices, profits can be made instantaneously by selling currency pairs. The market started initially as a platform for banks to buy and sell currencies. Gradually, individual traders also began to participate in it through brokers. 

Additionally, tourists engage in the spot market transactions when they exchange foreign currency with a money-changer. A firm’s decision to immediately convert the receipts from an export sale into its home currency can also be considered as a spot market transaction.

The Futures Market:

Forex (currency) futures are exchange traded contracts to buy or sell a certain amount of any currency. The trading price of a currency is set according to a future price on a set date. A currency futures contract is traded with a specific termination date, after which a trader has to sell it.

Currency futures were developed after 1971, following the collapse of the Bretton Woods system of fixed exchange rates. The currency futures market is growing in popularity, as the main participants of this organized market comprise bankers, importers, exporters, multinational corporations and private speculators.

They are traded according to the rules and regulations that are drawn by the futures exchanges. The trading can be done either on the floors of these futures exchanges or these exchanges can facilitate electronic trading for its members. The Chicago Mercantile Exchange is the world’s largest and most successful exchange for trading in currency futures, with offices in Chicago, New York, Washington, London and Tokyo.

Forex futures serve the following purposes: 

– Investors trade forex futures to hedge against the exchange-rate risk. 

– Futures are used by forex traders as speculations to earn profit from currency rate fluctuations.

The Options Market:

Forex options are contracts between buyers and sellers whereby the buyer has the special power, of buying or selling forex at a predefined rate during a specified timeframe.

Forex options are of two types: call options and put options. The buyer of a call option has the right to buy the underlying currency at an agreed upon price at a future date. A put option provides the buyer the right to sell the underlying currency.

While currency options give the buyer the right to buy or sell the underlying currency, there is no obligation to do so. However, the seller of the currency options is obligated to buy or sell the underlying currency in case the buyer decides to exercise the option.

For exercising the right to trade the underlying asset, the seller of the option is paid a price, known as premium. The price that is specified for either buying or selling at the future date is known as the strike price.

When an investor believes that the US dollar will appreciate against the Euro, he purchases a currency call option on USD/EUR. If the value of the US dollar actually increases against the Euro, the buyer can exercise his right to earn a profit.

A comparatively small amount of currency trading occurs in options markets.

The Derivatives Market: 

Derivatives are financial instruments, the price or value of which is derived from some other asset, index, value or condition known as underlying assets. Technically, the term can be used to described options and futures as well, however its most common usage for Forex refers to instruments that are not traded on organised exchanges. These include: Forward contracts, Foreign-exchange swaps, Forward rate agreements and barrier options.

Most foreign-exchange trading now occurs in the derivatives market (inclusive of options and futures). Options and Futures are traditionally refered to as Exchange Traded Derivatives, while Over the Counter Derivatives are those which are privately traded between two parties and involves no exchange or intermediary.

The main participants of the OTC market are the Investment Banks, Commercial Banks, Govt. Sponsored Enterprises and Hedge Funds. The investment banks markets the derivatives through traders to the clients like hedge funds and the rest.

In contrast, exchange traded derivatives are traded on an exchange which acts as an intermediary and takes initial margin from both the parties. 

Derivatives are used by investors to speculate and earn some profits if the value of the underlying assets moves in the direction perceived by them. Similarly, traders use derivatives to mitigate or hedge the risk in underlying assets by entering into a derivative contract whose value moves in the opposite direction to their underlying position.

The post What is Forex? – An Introduction to Forex Trading appeared first on Economy Watch.

The Economic Times (ET) 500 is an annual ranking of the largest companies in India based on their total income (revenues). The current list was published in December 2012 – taking into account financial data for the year ended June 30, 2012.

The list gives a snapshot of India’s commercial progress, where the money has gone and how it’s moved to new industries over time.

The Economic Times (ET) 500 is an annual ranking of the largest companies in India based on their total income (revenues). The current list was published in December 2012 – taking into account financial data for the year ended June 30, 2012.

The list gives a snapshot of India’s commercial progress, where the money has gone and how it’s moved to new industries over time.

2012 was a difficult year for Indian companies. Besides the weak rupee, which has offset any benefit from falling global commodity prices, industrial demand has also been low – due to lower capital expenditure, sliding export growth, and high interest rates that have weighed on growth and profitability of companies.

Additionally, weak government reforms have caused little change in India’s business operating environment, exacerbating the general slowdown in the economy.

In terms of economic outlook, things do not seem promising in the face of high inflation, political uncertainty and Indian’s own version of the fiscal cliff.

That said, top companies such as HDFC Bank, Sun Pharma, Lupin and TCS have been observed to be holding their fort in spite of the bearish market sentiment. Earnings of these companies have improved despite an increase in the cost of capital. When interviewed about their strategy, a common mantra that emerged is their decision to stick with their core strengths and “avoid adventure” in the sea of uncertainty.

In total, the 500 companies on the list earned revenues of $908.84 billion, with profits of over $64.06 billion. Check out the 2012 list of the ET 500’s top 100 companies below (all figures converted from INR to USD).

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The Forbes Global 2000 is an annual list of the world’s 2000 largest publicly listed corporations. Below is a compilation of Vietnamese companies featured on the list in 2013.

The values on the list were last updated on May 2013. All figures are consolidated and in US dollars.

There was only 1 Vietnamese company on the 2013 Forbes Global 2000 list. It had a market value of $2.4 billion, with $24.2 billion in assets; generating $2.6 billion in revenues and $0.3 billion in profits.

The Forbes Global 2000 is an annual list of the world’s 2000 largest publicly listed corporations. Below is a compilation of Vietnamese companies featured on the list in 2013.

The values on the list were last updated on May 2013. All figures are consolidated and in US dollars.

There was only 1 Vietnamese company on the 2013 Forbes Global 2000 list. It had a market value of $2.4 billion, with $24.2 billion in assets; generating $2.6 billion in revenues and $0.3 billion in profits.

Click on the companies’ names to find out more information on the company, including the type of industry it is in and its listing name in the stock exchange.

Alternatively, you can browse other Forbes Global 2000 companies, by country, at the end of this article.

All Forbes Global 2000 Companies – By Country

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The Forbes Global 2000 is an annual list of the world’s 2000 largest publicly listed corporations. Below is a compilation of Venezuelan companies featured on the list in 2013.

The values on the list were last updated on May 2013. All figures are consolidated and in US dollars.

There was only 1 Venezuelan company on the 2013 Forbes Global 2000 list. It had a market value of $3.4 billion, with $33.2 billion in assets; generating $3.9 billion in revenues and $1 billion in profits.

The Forbes Global 2000 is an annual list of the world’s 2000 largest publicly listed corporations. Below is a compilation of Venezuelan companies featured on the list in 2013.

The values on the list were last updated on May 2013. All figures are consolidated and in US dollars.

There was only 1 Venezuelan company on the 2013 Forbes Global 2000 list. It had a market value of $3.4 billion, with $33.2 billion in assets; generating $3.9 billion in revenues and $1 billion in profits.

Click on the companies’ names to find out more information on the company, including the type of industry it is in and its listing name in the stock exchange.

Alternatively, you can browse other Forbes Global 2000 companies, by country, at the end of this article.

All Forbes Global 2000 Companies – By Country

The post Forbes Global 2000: Venezuela’s Largest Companies appeared first on Economy Watch.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letters “V-Z”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letters “V-Z”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

Click on the companies’ names to find out more information on the company, including its country of origin, its CEO, the type of industry it is in and its listing name in the stock exchange.

Alternatively, you can browse other Global Fortune 500 companies, by alphabetical order, at the end of this article.

The post Fortune Global 500 List: Letters V-Z appeared first on Economy Watch.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letters “T-U”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letters “T-U”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

Click on the companies’ names to find out more information on the company, including its country of origin, its CEO, the type of industry it is in and its listing name in the stock exchange.

Alternatively, you can browse other Global Fortune 500 companies, by alphabetical order, at the end of this article.

The post Fortune Global 500 List: Letters T-U appeared first on Economy Watch.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letter “S”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letter “S”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

Click on the companies’ names to find out more information on the company, including its country of origin, its CEO, the type of industry it is in and its listing name in the stock exchange.

Alternatively, you can browse other Global Fortune 500 companies, by alphabetical order, at the end of this article.

The post Fortune Global 500 List: Letter S appeared first on Economy Watch.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letters “P-R”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

The Fortune Global 500 is an annual list of the world’s 500 largest publicly listed corporations based on their revenues. Below is a compilation of the companies featured on the list, which names begin with the letters “P-R”.

The current list was published on July 9, 2013 – ranking companies by their total revenues for the respective fiscal years ended on or before March 31, 2013. 

In total, the 500 companies on the list saw revenues of over $30.3 trillion.

Click on the companies’ names to find out more information on the company, including its country of origin, its CEO, the type of industry it is in and its listing name in the stock exchange.

Alternatively, you can browse other Global Fortune 500 companies, by alphabetical order, at the end of this article.

The post Fortune Global 500 List: P-R appeared first on Economy Watch.