Edition 36, Finance

The Use of ADRs in Mexican Companies: Is It Worthwhile To Try It?

By: Polux Díaz
Director of the Program Master’s Degree in Finance, ITAM

When a Company wishes to grow and does not have the necessary means to make it happen, it should resort to the capital markets. You can be obtain funds there in two ways: with debt by obtaining a bank credit or by issuing some kind of bond in the market and the second is by issuing stock. A severe problem found when using this last method is the few means investors may have to acquire shares of the Company in the Mexican market, but this does not mean that the Company is in bad conditions or that its shares are not attractive, it is simply due to the fact that the number of investors that can acquire shares in a market like the Mexican is low, so they may not be willing to acquire more shares either because their funds are invested or simply because they may think is not attractive enough to acquire them.

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Edition 36, Finance

SOFOLES, Risk and Liquidity

By: Renata Herrerías
Business School, ITAM

No company is immune to liquidity risks. There may be businesses that are “more liquid” than others but the little availability or pressure to obtain resources to face short and medium term commitments is one of the determining factors for the long term feasibility for any and all businesses.

If an organization tries to grant credits by using resources from third parties, the liquidity issue is still more critical. In general terms it will be highly leveraged and it is precisely this leverage that allows businesses to do business. In general terms, this is the business of banks and intermediaries.

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Edition 36, Finance

Investing in Human Capital Increases GDP per Hour Worked

By: Irina Nikolaeva and Antonio Quesada
PwC

Part of the discourse in human capital management is that employees are the most important part for an organization to be successful. But, sometimes, this discourse lacks empirical evidence.

Nevertheless, PwC recently made a world level study that revealed that in those countries where a significant investment has been made in human resources, the Gross Domestic Product (GDP) per hour worked has also experienced a big increase. In that sense, the research states that emerging countries such as China, the Czech Republic, Estonia, India, Poland or Brazil, amongst other, show a 10% GDP growth per hour worked, and underlying that fact is a strong capital investment in human resources. Actually the Brazilian case is at the forefront as a result of its investment in technology and research.

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