PESTEL Analysis of China International Capital Corporation - Case Study Example

SHARE INVESTMENT PORTFOLIO ASSIGNMENT Share Investment Portfolio Assignment Mohamed, other names Insert Tutor’s name Insert course grade 28.01.2012 Executive Summary One of the investments company owned by state is the China International Capital Corporation limited (CICC). It is located in central Huijin, People’s Republic of China. It is one of the best performers in the shanghai stock market where it is ranked amongst the top ten in the turnover rate overall. The company has sound management system that makes it viable and thus conducive for both local and international investors to have faith in the security of their funds. As a joint venture investment bank, it provides services like banking, both individual and institutional security sales, capital market, trading, asset management, equity and market research services. This is one of the viable participants in the Shanghai stock market exchange. Its good structure and management system puts it at a centre point of attraction for many investors because of the ability of share gaining over time. I therefore decided to invest my £10,000 in their initial public offer (IPO). PESTEL ANALYSIS of CICC This analysis gives an overview of CICC structure and its operating protocol that can be the basis upon which a potential investor decides to invest in the company or decides otherwise. Economical Chinese government intervention has piled pressure on the stock, which seems to bring down the turnover. This is associated with risks occurrence that has not spared any of the publicly listed companies in the Shanghai stock market exchange. CICC Bank is increasing its share in the global financial frontiers. Reflection of this increase is because banking has since securitized their residential mortgage. The company has since elevated the total credit card loans users as well as close income amounts and specifically provided credit losses. Technological CICC depends strongly on technologies like the website service in linking and aligning its all global subsidiaries while overseeing its efficiency to achieve global objective. Has the largest number of ATM points across the globe, and probably the giant’s share in the Chinese market for the past one decade. This has since improved their market take and mobilized its clients. Social The CICC is the preferred investment company throughout the last fiscal year and remains Chinese giant global investment bank that has a future because of its trends of evolution and embrace of technology. CICC’s major significant progress has been in realization of its expansion plans across major cities in the Asia and now in the Europe and the United States of America. One major issue affecting this segment is their business earning is largely hindered by fiscal, policies like monetary and other acts adopted by the Chinese government to put the market under scrutiny and control. Legal issues If prospective clients and their incumbent customers decide to make references or links from their website, they are informed that such option does not provide any endorsement or recommendation from their management or any of their affiliating bodies. Thus they would not bear any responsibility or be liable for any third-party products or services or any information contained on those parties' websites. Trademarks; Their disclosure of name on the web pages does not mean that licensing of any nature is given to any party. Therefore, the information is meant for clients’ only for their personal use. Liability Limitations; The CICC will Under no obligation nor its affiliating subsidiaries be liable for other parties on any incidental,, direct consequential, exemplary, special, indirect, or punitive damages from damage resulting from use loss, data, or profits, irrespective of notification given or no. This PESTEL analysis clearly states that economical approach is the main area under which CICC is being fueled and driven for its day to day activities. This is vital in keeping its financial ambitions upbeat to realize its goal; other aspects playing crucial roles are technological advancements and social consideration that identifies its role in attracting many to join their investment shares as well as being clients. Contrary, other aspects like political areas play less significant role as far as financial gain is concerned. Other than these contributing factors in growth, hindrance of progress is arises from government interventions in putting controllable measures to the stock and other related items. Key Success Factors To continue strengthening their operation and performance by improvement of their products and distribution capability in delivering a differential client experiences and values propositions. Active management of capital in maintaining a strong capital ratio and high rating in provision of higher return to their shareholding. Contribution of the high mutual funds revenue is realized through their improvement of global market capital share, which is appreciating well and net sales of long-term funds as retail investor confidence returned. They have so far deepened their high and ultra high net worth client relationships; this ensures they deliver a full range of wealth management solutions like investments, trusts, banking and credit, and insurance solutions. They are in a continual improvement of clients’ satisfaction from their already high level; this is projected to drive their productive clients. Their main Focus is on important areas with prospective potential like growth of the industry to make them a leader of high net worth client assets in china; Financials: Table showing the total income after taxation 2010 2009 2008 Total income and other taxes $ 2455 $ 2289 $ 1997 Net income before income taxes $ 6,968 $ 5427 $ 5035 Table showing the total income after taxation for 2010 fiscal year Jan-April May-August September-December Total income and other taxes $ 799 $ 830 $ 826 Net income before income taxes $ 2320 $ 2400 $ 2406 Key financial trends This analysis shows an increased mutual fund distribution fees that reflects capital appreciation as well as net long- term fund sales in the CICC. The company has a positive trend and is thus positive for long term investments. Reward of dividends is based on quarterly basis, where shareholders are rewarded handsomely depending on their shares as at the end of the period. Figure one. Showing the performance of CICC in the Shanghai stock market on 20th January 2012 Source (CICC n.d; Shanghai Stock Exchange 2010) This figure shows how CICC performs in the stock market, from 0930 to 1500 GMT. It shows a positive trend because of gain it realizes over time. This has been the trend for the past six months now. This solid take in the stock exchange is a lure for young investors interested in the taking up shares from these. Figure 2. Showing the performance of CICC in the Shanghai stock market on 20th January 2012 Source (CICC n.d.) This share index just like the former predicts a possible effective future for CICC in the capital market. The shares are on an upward trend from time to time. The index does not go down unlike other company with great marginal figures that cannot offer a predictable outcome (CICC n.d.). Conclusion CICC stands a better chance in the Shanghai stock market; its shares keeps gaining from time to time, for the past six months, the figures have been recording a positive gain. This is unlike other companies listed in the same capital market which experiences unpredictable outcome in its shares. The £10,000 shares yielded a dividend of 0.1 percent which I used to buy more shares. Reference lists CICC n.d., China International Capital Corporation limited. Available from: < http://www.cicc.com.cn/cicc/english/index.htm> (28 January 2012). Shanghai Stock Exchange 2010, Top 50 Members in 2010. Available from: < http://www.sse.com.cn/sseportal/en/c05/c02/c03/c02/p1125/c1505020302_p1125.shtml>(28 January 2012). Read More