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Depository and Portfolio Management in International Markets

In today's volatile and intricate market investment requires constant attention and monitoring. The demand made on energy and time by other businesses may not leave the people with the capacity to attend to their personal portfolio with degree of care they deem appropriate. Portfolio management is a responsibility of senior management team of the organizations or business unit. This team, which may be called Product Committee, meets regularly so as to manage product pipeline and to make decisions as regards the product portfolio. Often, this is same group that conduct the stage-gate review in an organization.

 

Portfolio management may refer to:

  • Investment management, handled by portfolio manager
  • IT portfolio management
  • Project management
  • Project portfolio management

 

With the significant investment required to develop the new products and risks involved, portfolio management has becoming increasingly important tool so as to make strategic decisions about the product development and investment of the company resources. In many companies, current year revenue is increasingly based on the new product developed in last two to three years. Therefore, these portfolio decisions are the basis of company's profitability and even though continued existence over next several years. In the today's financial markets, successful investing in the securities demands time and the expertise. As a financial complexities expand, managing the own investment can becomes a daunting task. Given a scenario, Portfolio management services offer an ideal vehicle for the investor looking for the specialized investment strategies.

 

The shares of a company are being required to be traded in the dematerialized form. If a person wishes to maintain their shareholding in electronic form, they would required to open Account with a Depository Participant (DP) and surrender their share certificates for the dematerialization through their DP with whom they had open their account. The Depository System permits reconversion of the electronic Shares into a physical form through the process of rematerialisation. A bank or a company which holds funds or securities deposited by other persons, and where exchanges of these securities takes place is said to be depository. It facilitates the safekeeping of shares. It also assists in the transfer of ownerships without having the handle securities.

 

Depositary receipt (DR) is the type of a negotiable financial security which has been traded on stock exchange but represent the security, generally in form of equity which is issued by foreign public listed company. The receipt, which is the physical certificate, allows investor to hold their shares in equity of the other countries. One of most common type of depository receipt is American depositary receipt (ADR), which is offering investors, companies and the trader global investment opportunities since 1920s. They functions as means to increase the global trade, and helps to increase not only the volumes on the local and foreign market but also exchange of the information, technology and regulatory procedure as well as the market transparency.

 

Benefits of having a Depository are as follows:

  • Holds securities in an electronic form, thus reducing the paperwork
  • Applies for IPO's Transfers securities in an immediate manner
  • Reduces transaction cost
  • Eases nomination facility
  • Direct transmission of the securities
  • Records any of the corporate actions automatically

 

If you want to learn more then consult with the experts at CL King and Associates. CL King provides investment banking, equity research, sales and trading, and investor services to corporations and institutions. You can call at 518.447.8050

Also read: Business Finance and Corporate Value by CL King and Associates

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