FIN301 Financial Instruments Institutions and Markets

You must answer ALL questions. (Total 100 marks)

"Singapore’s Grab to List in U.S. in $40 Billion SPAC Deal – Bloomberg 13th April 2021"

(a) Illustrate and contrast the traditional IPO process and institutions involved versus the process and the various institutions involved in this transaction. (15 marks)

(b) Analyse the steps that can be taken to promote similar activities in Singapore along with the financial institutions that will play a role in its development? (10 marks)

Major Central Banks all over the world have plans to digitise their currency. People Bank of China (PBOC) has been developing the digital yuan, to replace some of the cash in circulation, started trials in a number of cities and plans to use it for the Beijing winter Olympics.

Discussthe rationale and advantages for PBOC to introduce the digital yuan. (25 marks)

(a) Sovereign wealth funds (SWF) are an important participant in financial markets. Appraise their role in the financial markets. (15 marks)

(b) A Sovereign Wealth Fund issued a 50-year bond at the end of September 2020. Please identify and examine the rationale for the transaction. (10 marks)

The ratios below measure the different aspects of risk metrics and the bank performance of two banks in the Middle East.

Net Internet Margin (NIM) 2.5% 3.6%

Non-Performing Loan (NPLs) 1.2% 1.5%

Cost/Income Ratio (C/I) 23.4% 17%

Cost of Risk (COR) 0.74% 1.75%

Moody’s Credit Rating Aa3 A2

Total Assets (bil. USD) 286.4 47.9

(a) For each of the four ratios NIM, NPL, C/I and COR, briefly discuss what the ratio measures and how it impacts the banks performance. (20 marks)

(b) Based on the above, please analyse which is a stronger bank.