International Business and Finance Ideas

Posts Tagged ‘Investment’

Be wise,reckon GREEN,invest in renewable & sustainable resources and save our planet!!!

Would you like 93,5% returns on your capital invested paid directly into your bank account in USD’s each 5 years?

If you buy a 1 ha plot, your capital and 18,7% returns per annum are guaranteed as your money and title deed are managed in a FSA regulated trust fund, Citadel Trustees Restricted in the UK. If you buy a 2000 m2 plot your capital and 17,1% returns per annum are guaranteed.

Alternative Investments,Green Investments & Timber Investments with guaranteed returns are brilliant low risk opportunities in sustainable
& renewable resources with fantastic environmental & humanitarian benefits in the current volatile world economy!!!

Silva Tree is a fully incorporated Central American company specializing in environmental development. Our Directors have 17 years
of forestry experience as well as strong business and financial backgrounds. The Silva Tree assemble currently has offices in Costa Rica,
Panama, Spain and the United Kingdom and are involved in programs dealing with conservation, reforestation and renewable energy.

Silva Tree design and develop environmental projects nearly the world, working with a team of lawyers, accountants and trustees to make a
safe and practical investment structure for each ethical investment opportunity offered. By selling small parts of our own projects, Silva
Tree facilitate greater environmental benefits than we would achieve on our own, as well as donation ethical, safe and diverse investment
products with unrivaled returns. .

Our funds are operated by an Citadel Trustees Restricted, an FSA-
regulated trustee and offer highly regulated investments with
brilliant returns.

Citadel Trustees Restricted

Citadel’s highly experienced team has been as long as trustee and stakeholder services to the leisure and real estate industries for
more than 25 years, handling in excess of £65 million/0 million of client funds annually.

Citadel Trustees Restricted, was formed to provide specialized trustee services in a variety of areas such as stakeholder activities,
conveyancing services, shared ownership, private residence clubs and probate administration.

Citadel’s Head Office is based in Camberley, Surrey, United Kingdom and the company has arm offices, or associated companies in Spain,
India, Thailand and China from which it services its global client base.

Princess Project

The Princess Project is a pioneering reforestation venture in central Panama. 1,500 hectares of land, currently used for cattle grazing, are
being reforested with the quick growing tree Paulownia Elongata (also known as Princess Tree or Empress Tree). Paulownia is a fascinating
species; believed to be the fastest growing hardwood in the world, it can be harvested 4-5 times in the space of just one Teak harvest and
it provides an array of environmental benefits, from soil regeneration to an extraordinary rate of carbon dioxide uptake.

The Princess Project is a commercial timber plantation which is also being developed as a Carbon Offset Project, subsequent CDM guidelines
developed for the Kyoto Protocol and verified to meet VCS and CCB standards, with environmental and socioeconomic benefits at the core
of the project. The trees will be harvested after their fifth year of growth and sold as a sustainable timber product. New trees will
rekindle from the roots to make three more cycles of growth and harvest over the 20 year project term. The investment opportunity is

based on the sale of the project’s timber to a commercial wood trader.

Timber Investment

All Silva Tree investment opportunities are genuine environmental projects that happen to be open to investment, not the other way
nearly. We develop programs that we believe are vital, and expand them by donation private individuals to participate. We make our money
the same way you do; from our projects’ yields.

After oil, timber is the most intensively traded raw material in the world. The (FAO) expects that this demand will experience a further
rise of 50%. The present supply of hardwoods from managed plantations cannot meet this need.

In the current material goods and financial climate, sustainable forestry projects offer a low-risk investment opportunity with additional
environmental benefits. The Princess project is the only timber investment to offer guaranteed returns* payable in just 5 small years.

The Princess Tree, officially known as Paulownia, is recognized as the fastest growing hardwood in the world. The timber it produces is
lasting and strong, lightweight and fire resistant. Unlike other Tropical timbers, the demand for Paulownia is not being met by
abundance of plantations and, as a carbon reducing facility; it absorbs more CO2 than any other Tropical plantation tree. The world
market price, supply and demand, speed of growth and quick return on investment make Paulownia an ideal commercial plantation tree.
Moreover, a buyer for the timber has already been found with an insured buy guarantee in place, ensuring your investment return
is completely guaranteed.

Private investors are invited to join in this project by purchasing individual plots of land as long as net returns of 18.7% per annum over a total investment period of twenty years (applicable to investments made before the 1st January 2010). Not just an exceptional financial
investment, buyers can delight in a variety of tax breaks, assurance of security and delight in the environmental benefits and community
initiatives facilitated by the project.

Key points

Low investment amount from just ,000 USD per unit
Yucky return of 5,200 USD over 20 years Guaranteed returns of 18.7% p.a. for 20 years Returns paid each 5 years
Tax advantages
SIPP qualified
CO2 climate change mitigation
Benefits to local communities
Land held in trust
Timber buyer with insured guarantee
Based on introductory buy price of 35,000 USD applicable to all buys made before 30.06.2010.

Investment returns

The investor will receive 660 trees per hectare of land bought
A lease will be registered in his/her name for 21 years, which will produce 4 timber harvests
A buy price of USD 275 per m3 of timber is guaranteed by World
Paulownia LLC, if the investor wishes to take this option
A 5-year ancient Paulownia tree produces at least 0.2m3 of processed wood
The total m3 produced per plot over the 4 harvests is 528 m3 Based on a ,000 USD investment (available until Jul 2010), this will provide a return of  5,200 USD per plot
The harvesting, processing and transportation will be carried out by a management company of your choice (unless you wish to organise it
yourself) which is likely to charge 10% of the value of your timber sales This produces a net return of 18.7% per annum over 20 years, after the initial investment amount has been deducted

Community projects

In order to qualify for high quality Carbon offset credits, our project has to deliver a wide array of socioeconomic benefits. The
Princess Project is designed according to the CCB Standard with emphasis on reducing poverty in developing countries.

Aside from the community projects regularly organized by Silva Tree such as the sponsorship of local schools and as long as research
opportunities to educational institutions, the Princess Project itself will benefit local communities. Local staff will be employed to work the land belonging to Silva Tree, and farmers will be invited to inter plant crops on the project land. This will give public the
opportunity to grow food for themselves and their families, or sell their produce to generate an income for themselves.

Minimum Investment: 000.00 USD/Approximately £22,682.25 GBP/
Approximately R260,255.11 ZAR (Depending on Currency Rate) For 1 ha Plots

Special Offer Now Available For a Restricted Time Only…

Upon client request, Silva Tree have reduced their minimum investment amount from 000.00 USD to just ,500 USD/ Approximately £4,995 GBP/
Approximately R54,385.79 ZAR for a restricted time only. This is a unique opportunity to invest in the Princess Project Panama at a lower level,
ensuring that everyone has an opportunity to take part in this ethical timber investment.

Starting in the summer of 2010(Winter in South Africa), Silva Tree have made a unique investment opportunity with land units for sale
at less than 5000 Pounds (depending on exchange rates). For less than a quarter of the normal minimum investment amount, you can now take
part in the Princess Project Panama, an ethical timber investment using Paulownia for reforestation.

Just 7,500$ US will buy you 2,000 m2 of land with 132 trees for a 20 year investment term. The trees will be harvested each 5 years and
returns spread to you by Citadel Trustees Ltd., who also hold the entire project in trust. The pronouncement to reduce the minimum
participation amount came from Silva Tree’s experience with many individuals who wish to invest in the project but do not possess
sufficient funds to participate, particularly via SIPPs and pensions.

To ensure that previous investors as well as those who are investing at the higher level of 35,000$ US are not at a drawback because of
this development, the returns achieved by the higher investment amount are also higher. This means that everyone is able to participate in
the project but investors at a higher level are satisfied.

If you are attracted in this guaranteed,risk free and stable investment opportunity please contact me ASAP to reserve your plot of
timber forest as keen investors are snapping up this fantastic opportunity.

Best regards,

Mark Waite
Investment Advisor
Omega Land Investments
T/A Sovereign Land

Tel: +27 87 943 4754

Mobile: +27 74 116 5213

mailto: mark.waite@incomeforlife.co.za

Alt email: mjw0710@vodamail.co.za

For more information about this opportunity & other brilliant
investment opportunities please visit….

http://www.incomeforlife.co.za

“Diwali” (Deepavali) will be celebrated in India on the 5th November 2010 (Vikram Samvat 2067). The day of Diwali is auspicious for each Hindu but it is more vital for business and business community. Public take various investment decisions on this day. The attempt of this article is to help investors take informed investment decisions based on their Moon signs.

Aries:

Arians should avoid taking rash decisions as regards investment. Speculation should be avoided generally. Material goods investment may give positive results. Special care should be full before entering into any contract and signing any document. Some Arians may gain from abroad. Investment in shares of excellent companies may also be considered.

Taurus:

Natives of Taurus should exercise extreme caution while investing in material goods. It may be advisable to go through the history of land or draftsman before taking any investment pronouncement. There may be gains from stocks if investors go by fundamentals. Greed should be avoided and investment should be made on sound breakdown. Ideal investment may be government bonds, IPO’s and mutual funds. Risk free investment is better option.

Gemini:

The Gemini public may invest in material goods for long-term for real gains. If the thought is to gain quickly, this may become a cause for loss. The natives are advised to remain careful while taking loans. They may fall into some kind of debt trap if prudence is not exercised in managing debts and investments. The focus of investment should be on the shares of excellent companies. Investment in gold may also payoff in the long run.

Cancer:

Speculative gain is possible from have a supply of market if it is done with caution. Investment should be made on excellent companies. Care is necessary for investment in material goods. It is not wise to be overambitious with respect to future price rise of material goods. Shares or mutual funds may be excellent option. Gossip and hearsay should be avoided while taking investment pronouncement. Investment in business may also prove to be a excellent option.

Leo:

Goddess of fortune seems to be kind this year to Leos. Possibility of gain exists in shares, stocks, material goods and the like. The stars of fortune are smiling and if such fortune is backed by intelligent plans and investment, excellent money can be made. But, it will be necessary to control nerves and be watchful. Some calculated risks can be full for extra advantage.

Virgo:

If investment has been made in material goods, the projects may get delayed. Caution should be full while making new investment in material goods. Read the agreements before signing them to find the finer points. Informed investment in have a supply of market, flat deposits, government bonds and appeal impact securities are better options. In small, it is vital to minimize risks.

Libra:

Librans should be extra careful while investing in material goods. Gains can but be made in commodities market and share market. Plotted investment will be better than speculation. Investment in gold may also be done for long-term gains. For investment of any kind, a proper survey of the situation will be beneficial. Possibility of gains from foreign source also exists.

Scorpio:

The time is very excellent for those who are plotting to buy material goods for personal use. Gains from ancient material goods or family material goods are indicated. Share investment may also give excellent returns. Stars are favorable with respect to investment right now. But, some calculated risks may be necessary to convert the advantage into material gains. Investment in gold and stuff can be made for risk free investment.

Sagittarius:

Extreme caution should be exercised in taking investment decisions. It is better to make efforts for maximizing earnings. Invest the hard-earned money in safe instruments like Government bonds, securities, insurance and mutual funds. It is better to avoid speculative investment. Material goods investment should also be done with due prudence. It is better to seek expert opinion regarding projects in which investment is to be done.

Capricorn:

Time is excellent for several types of investment. Money can be made from nearly each investment, but, investment should not be done with a blind eye. Caution should be exercised with respect to material goods investments. Delay in manner of speaking of projects may become a matter of concern. There may be some issues with respect to financial liquidity as well. Unnecessary expenses need to be curbed.

Aquarius:

Money can be made from have a supply of market. Speculation and small-term investment may also payoff well. But, informed investment is advisable. Investment in material goods may also give excellent returns. Gains from abroad are also indicated. Stars are favorable right now and prudent investments may become rewarding. Yet, caution is advisable while signing contracts and in finalizing deals for long-term.

Pisces:

There may be some career-related issues for natives. Such issues can be overcome with sustained and intelligent efforts. Risky decisions with respect to career and material goods investment should be avoided. It is better to avoid speculation. Investment in government bonds, securities and flat deposits may be excellent investment instruments. Investment in gold can also be made.

Buying stocks without a broker is a simple process done by vacant through the company’s Web site and signing up for an account online. Buy stocks or a dividend reinvestment plot with insight from anexperienced financial specialist in this free video on investing. Expert: Phillip Beningoso Contact: www.wearehdtv.com Bio: Phillip Beningoso has a bachelor’s of arts degree with a major in finance and a insignificant in economics and computer sciences from Kent Disorder University. Filmmaker: Christopher Rokosz
Video Rating: 0 / 5

Related Investing Articles

Author speech:

This article explicated the breakdown of business decisions as fiscal cost & benefit. If you find the costs and benefits from the investment- You must be visibly defined criteria to be used for evaluation hostile to the investment proposal. The criteria for making an investment breakdown of dealing benefits and costs of an investment proposal, these benefits and costs in most suitcases do not take place directly, but these are variable so that can be generated for changeable periods.Forex

On the basis of my experience, observed, & breakdown, this article I have paid attention mainly on the fiscal benefits achieved from investing in and operating a business. In this article, I have struggled to expose in more point terms with the fiscal costs associated by way of business decisions. Read the rest of this access »

Energy of the requirements and distributions appear to be common currents for developing investment market, below the conditions of free competition. Possibility of realizing these currents din real economical reality depends on the quality of the market monopolization. Below the conditions of reducing competition, when the fundamentals of the market essentially lose their flexibility, it appears on the face of tendencies.

Analyzing of the discussed currents means appearing forming and consisting mechanisms of balance at the investment market and also action of the factors conditioning changing of the investment requirements and distributions.

Factors of the investment requirements. Leaning upon wide theoretical and practical researches provided in the western countries we may conclude, that the investment request is characterized by frequent changing and it is formed by numbers of complexes of factors, among which we may break macro- and microeconomic ones.

An vital macroeconomic showing influencing upon the investment requirements is the number of national manufacture. It gives rise to the growth or reduction of the investment requirements below other equal conditions. Changing of accumulations of public and cash resources also work in this direction. Herewith, not absolute sizes of these showing, but their conformed meanings: the equality among accumulation and usage within the bounds of the used national product are of conclusive substance.

It is known, that in the market economy they consider savings to be the part of income not used for needs. They are sources for the investment resources. The size of the real resources, which are in the economy at each concrete stage of its development, depends on the fact what priorities make basement to the distribution of the manufacture – current usage or accumulation.

Changing of the norm of savings and investments. Changing of the norm of savings influences essentially upon those ones, which are in progress in the structure of social product. Reducing norms of savings gives rise to the growth of usage and reduction of the investment level. That is the reason for capital exclusion overcomes investments. This ruins balance in the economy. Reduction of savings is also followed by the reduction of the volumes of manufacture, investments and usage. Recovering of other balances on other technological level takes place.

Increasing norm of aid gives rise to another script of economical development, which is characterized by degradation of the usage level and growth of the investment one. Increasing investments gives rise to the accumulation of a capital in the industry after some discussion. The level of accumulation and investments are being increased until achieving optimal meaning from the top of economical firmness. This provides higher level of usage with the help of increasing the number of savings.

As the experience of the developed countries shows, that they used to achieve high level of mean live-have a supply of income when they used to direct vital part of social incomes towards savings while realizing structural transformation. There is quite firm positive relation between the share of final product used for investments and that of mean live-have a supply of income.

Distribution of incomes of public among savings and usage provides analogue influence upon dynamics of the investment. A well-known statement of J. M. Kains about increasing savings together with increasing received income hasn’t been proved by statistic researches provided in this sphere. Conclusion about absolute size during usage and distribution of incomes on savings are shown in the works of J. Duisenberg and F. Modillion.Growth of investments is achieved while increasing share of savings in incomes. Herewith, the role of savings, as investment resource depends greatly upon the influence of such factors, as “increasing preference of cash, development (insurance, social insurance) of those institutional savings, basic part of which are not below the disposal of enterprises attracted in capital”.

Factors influencing upon the investment requirements. The probable rate of inflation influences upon the investment requirements. From the most common top of view, fastening inflation rates devaluate those incomes, receiving of which are probable from the investments. Inflations also influences negatively upon the number of investments with numbers of directions, in the way of impeding economical growth in the long-termed aspects, with the help of reducing processes of widening accumulation and manufacture, devaluating industrial funds of each functional form, inflation tax of profit, also by outflow of cash resources to the sphere of circulation from that of manufacture, reducing real profit and savings, by decreasing the capacity of native market and others. That’s why, growth of inflation rates and inflation expectation hinter activation of investment activities and looses the stimuli of widening investments.

Formation of the investment request below the conditions of market economy is related with the functioning of financial market, which supports the movement of investment capital and also profit made out of the invested assets.

Financial credit system forms basic capital of the investment requirements by accumulating break investment savings. In such case vital role is played by the banks, which may use not only savings, but also cash resources being in circulation and emission. Conjuncture of have a supply of and credit markets defines conditions of the investment placements and influences upon the number of the investments. With the help of incomes made out of investments, which turn into the dividends and percents at the financial market, further manufacture of potential investment request, which is realized in the way of reinvestment, takes place.

Percentage rate and investments. Disorder taxation and percentage policies influence essentially upon the dynamics of investments. Their regulation appears to be the lever of the disorder reaction at the investment request. Reduction of the profit taxation below the equal conditions gives rise to the growth of the share of accumulation used for investments.

Loan percentage rate defines the value of the loan resources for the investments. Growth of the percentage rate strengthens motivation of savings and at the same time reduces and makes the investment unprofitable. While falling of the loan percent, investments appear to be more profitable, that’s why reduction of loan percentages rate gives rise to the growth of investment and on the divergent. Herewith, the fall of percentage rate, as a factor of activating investments, has its own borders, as at the certain stage of this fall economical agents prefer to save money in more liquid cash form (J. M. Kain’s the Theory of Liquidity), and thus they widen outflow of resources to the sphere of security speculation. This provokes a problem of optimal definition of the percentage rate below the given period, as an excessive fall or growth of percentage rate gives rise to the loss for the investment activities. Thus, the influence of percentage rate upon the investment requirements is not completely similar.

Norms of profit and investments. Definition of the influence of percentage rate upon the investment requirements might not be complete without comparing it with the norms of the probable profit. Herewith, it’s is to be noticed, that not nominal, but real rate of the percentage rate plays essential role for making investment conclusions, as the factor of inflation spoils real orienteer. While comparing loan percentage rate with the norms of profit it is possible to receive undesirable results.

It is to be remarked, that the profit plays double role in the investment activity. It may be discussed as an investment sources and, at the same time main goal of investing. Modern researches, which are related with the salvation of hard problems of mathematical formalizing of the level and dynamics of the investment request, also manifesting certain basic parameters of the investment requirements, prove the existence of certain relation between the profit and investments. For example, according to thw analyzing provided by the economical consulting counsel below the USA president, the most vital macroeconomic factors influencing upon the dynamics of investments are:

-      Net profit and depreciation assignments calculated towards yucky domestic product;

-      The norm of profit towards depreciation assets (calculated by conforming total profit to the depreciation assignment and foresee changing of the paid loan percent with the size of the depreciation assets by the current restoration prices);

-      Profit norm at the share capital by estimate (calculated with conforming net profit to the waste restoration value of basic capital with the current prices);

-      Market price of the emitted shares towards restoration value of the assets (calculated by conforming total share capital to the waste restoration price of the assets with the current prices).

Investment functions and profit. Foreign researchers obtained certain investment functions by depending on the problems of analyzing, where one of the leading parameters of the investment changing are net profit, the dynamics of the profit norm or probable size of the profit. Investment functions may be represented in the subsequent way:

Investment functions (6.1) and (6.2) characterize dependence of net investments to the number of the ones of earlier period, accumulated basic capital and the size of net profit. According to the research goals, it is possible to fill them and leading such data into the consistence of parameters, as percentage rate at the long-termed loans of the banks.

In the investment functions (6.1) and (6.2) a special place is occupied by the parameter of basic capital accumulated in the economy, which are leaded into the investment equations of negative relations. It expresses the processes of accumulation and surplus accumulation of a capital during the economical cycle and their relations with the dynamics of the profit norm. This mechanism is expressed in the subsequent: growth of the profit norm activates investment request and the growth of net investments that, in its turn, fastens the process of increasing basic capital. The growth of basic capital after the termed structure starts influencing in direction of overcoming profit norm that, in its turn, reduces investments and thus decelerates increasing rates of the basic capital. This reduction leads further break growth of the profit norm in the economy that gives rise to the development of the subsequent cycle. Thus the mechanism of investments in the capital provides generating of working conjuncture cycle and it makes one of the mechanisms of positive loopback.

Investment gathering (6.3) shows the model of investments, which starts from the size of the probable profit. They use data of have a supply of-exchange quotation of the share rate of the companies for measuring probable profit. It makes current valuation of the future flow of the corresponding company incomes on the basis of have a supply of-exchange data of securities. The difficulty of consisting aggregated data of have a supply of-exchange quotation of the company shares gives conditions quite narrow sphere of using the given investment gathering – on the level of break firms.

The norm of probable profit belongs to those factors, which influence upon investment request on the microeconomic level. We must also ascribe expenses of realizing investments, expectations, changing in technology and others to it.

Norm of the probable net profit is of significant substance in the system of microeconomic factors. This is conditioned by the fact, that exactly profit makes the motivation for encouraging consciousness of investments. Investors provide residency of their sources when they expect, that the profit made out of the investments overcomes their expenses.  The higher is the norm of net profit, the more is the investments request. Herewith, investment will be profitable only in case, when the probable norm of net income overcomes real rate of percents. Attracting loan resources loses its conception.

The enterprises compare the norm of probable net profit with the loan percentage rate either during using own resources. According to V. Repke, they invest profit in own firm when the level of profit made out of the investment appears to be higher during the loan percent. Otherwise they will be placed at the capital market.[1]

Thus, percentage rate is the criterion of investment effectiveness. Effectiveness of the investment project must not fall below the loan percentage rate. The percentage rate, which makes basis for evaluating the objects of capital residency of the capital of investment assets, does another vital gathering. I. Fisher characterized percent to be the means for “actualization” of each other income, as the method of evaluating each income in time.

Other factors influencing upon the investment request. Subsequent factor influencing upon investment request is the expenses for its consciousness. They foresee this factor during calculating the norm of the net profit probable from the investment project. The growth of expenses reduces the norm of the probable net profit and on the divergent. Herewith, as the vital parts of the investments are of the long-termed character, they foresee time factor as well. In whole, the more are expanses and terms for their expiation, the less is the level of investment request.

Expectation of the industrial persons, who lean upon subsequent requirements, the number of selling and predictions of profitableness also influence upon the number of investments. Profit made out of the investments will depend upon the growth of these data. Herewith, the groth of optimal expectation gives rise to the growth of investment requirements.

The largest profit is made out of the investments in the innovative manufacture, which guarantee reduction of the expenses of enterprise, improvement of the manufacture quality and growth of the probable norm of net profit. That’s why changing in the technologies makes the encouraging factor for the investment requirements.

Thus, investment request is formed by the influence of the factors of various kinds and directions, which define their flexibility and energy.

Formation of the investment distribution has numbers of peculiarities. From one side, as the distribution of commodity, it is conditioned by such basic factors, as value and, also, not valuable determinants: expenses, fulfillment of technologies, taxation policy, expectations, the level of competition and others; from another, investment distribution is discussed to be specified distribution of commodity, as the investment commodity differs for its ability of making income. This defines characteristic peculiarities of the factor, which is being formed by the dependence upon the level of profitableness.

The norm of profitableness and investments. The norm of profitableness makes basis to the principles of financial instruments, which support the movement of real capital. Market price of financial assets shows the quality of attractiveness of the placed sources in the investment commodity.

Percentage rate on deposit in the banking system, the size of which defines the home industry flows, influences essentially upon the investment distribution. Herewith, have a supply of-exchange market and that of the loan capitals makes significant terms for stimulating investment distribution.

As during certain consisting of the investment distribution investment request is oriented towards the profitable assets, we conclude, that the number and the structure of investment distribution influences upon the number and structure of the investment request. Herewith, investment distribution is basic factor defining the scales of functioning of the investment market, as it gives rise to the changing of the existed requirements on the investment commodity. The mechanism of loopback is not expressed so far. It appears only below the conditions of independent competition.

Achievement of the balance between investment request and distribution is possible only in the total scales of the investment market. Their equalization in the marketing system takes place only in the total scales. Working of the mechanism of the balanced prices doesn’t characterize only independent competitive market. This mechanism needs investment commodity and changing of prices on the capital on the basis of balancing request and distribution until there is dynamic balance at the investment market, i.e. until they achieve balanced prices on the investment capital and investment commodity and also synchronization of decisions about their sale and buy.

The Mechanism of balanced prices. Influencing of the balanced prices upon investment market reflects the specifics of the investment commodity. As we have remarked, this is ability of making profit by the investment commodity. Striving for making more income with fewer expenses makes basement to the making decisions by economical subjects about investments. During certain structure of investment distribution the investors will prefer investment commodity, which guarantee maximal norm of profit at the invested capital below the conditions of minimal risk of investments. High market price of the investment commodity, which is conditioned by its profitableness, makes the impulse for directing vital mass of the investment capital in these objects of investments. Relocation of the investment capital, in its turn, widens investment request on distribution of the given commodity that gives rise to the look of rising price and the look of increasing distribution below other equal period of time. While increasing distribution of the given investment commodity the market mechanism gives rise to the fall of their prices. That is why investment capital outflows to the more profitable spheres of the investment activities. Finally, the discussed process will be finished with dynamic balance at the investment market.

Herewith, balance below the conditions of pure competitive market means that according to the comparison of the probable level of he loan percentage rate and marginal effectiveness of the capital, decisions about investments give rise to the optimal distribution of the plotted investments according to the perspectives of growing profitableness.

Thus, this balance is an ideal economical system, which is characterized with joint proportion of the investment resources and their usage, an optimal consciousness of economical interests of the subjects of investment activities.

Structure and reality of the investment market. The structure of investment market in the reality is far from the ideal model. Absence of pure competition reduces the energy of investment request and distribution, which is showed only in the face of tendencies, also reduces possibilities of balancing them and, relatively, fixing prices at the balanced level. Potential participants of the investment activity have not equal possibilities at the investment market. They have distinguished possibilities for receiving investment commodity per market price. Large oligopolistic investors are in more advantage situation, then those, which are rivals to each-other.

Thus, investment market in real economical practice doesn’t play ideally the gathering of optimal distribution of investments. Though, this doesn’t exclude the need of abstract modeling of economical processes, as exactly this gives rise to the showing of essential relations and currents, define conditions of balances of those fundamentals, which make the total of economical phenomenon according to the law of free competition.

Balance at the investment market appears to be partially macroeconomic one. Herewith, it also is essential condition for common economical balance. For example, in the well-known model of J. Hicks “ISLM” (“investments-savings-liquidation-money”)the balance at the investment market is the same as the balance of commodity market. That is why this model gained the name of the model dual balance of commodity and money markets.

The model “ISLM” reflects essential relation between investments and money markets. This relation, to our mind, is the most vital peculiarity of the investment market.

It leans upon usage of total parameters for investments and money markets as basic macroeconomic characters of these markets. This is percentage rate and the number of social manufacture.

The balance at the investment market is achieved in case of equality of investments and savings. As we have already exclaimed, investment number is defined by numbers of factors, though they disorder the relations to be researched during the economical dependence not by the total of variables, but by functional unity of just some of them (this total is considered to be the paribus of cetera).

They use Vsp (the number of social manufacture) and Pr (percentage rate) to be the endogenous variables of macroeconomic factors influencing upon investments. Left over factors are considered to be the exogenous variables. In such case investment formula is represented in the subsequent way:

Where, Iev is the part of the investments defined by exogenous variables.

IS curve expresses amalgamation of the number of national manufacture and percentage rate, during which investments equal to the savings.

Financial mediators and capital market. Correlation of transformation of the investments and financial market defines essential role of this latest in functioning of the investment market. In the first place, it is reflected by the fact that the request of enterprises and firms appear in the financial resources of basic and income capital form. In this case distribution of investment commodity turns into the cash-credit form. It is represented in the form of family industry and the savings of firms, which are accumulated in the banking system and are granted by certain percent.

Subsequent peculiarity of investment market is also evident. This is the existence of developed web of those financial mediators, which make realize connection between sellers and buyers of the investment capital. Financial mediators draw together break savings of the family industry and firms in the significant mass of the investment capital, residency of which takes place later between the users of investment.

The existed investment potential is concentrated in the institutions of banking system, which have special possibilities for using traditional cash resources and credit emission. Residency of the capital mobilized by financial mediators may be provided in the form of loans, emission of shares, purchasing bonds or other securities and so on.

Equality of a dividend and percent and investment request. The profit, received from this or that financial assets is divided into dividend and percent. This depends on what form they represent – industrial or loan. Wholly they reflect the norm of profitableness of the produced capital valuables. The equality of dividend and percent shows the structure of the investment request, its distribution between firms and banking system. This equality has the form of market price (rate) of financial instruments at the financial market.

For movement of capital valuables financial instruments fasten reaction of the prices on the changing of the norm of profitableness and thus they guarantee quick outflow. The size of their market price appears to be the indicator of the working conjuncture as a result of energy of investment activity. Thus, the mechanism of balanced prices at the financial market turns into the sharper forms of showing.

Essential peculiarity of the investment market is the role that is played by the percentage rate on it. As we have shown, the size of percentage rate gives rise, in the first place, to the size of the savings of family industries attracted by the credit system, and from another, the norm of profitableness of investments. They evaluate even own potential resources of the firms with the help of percentage rate: if the probable profit is higher, then the percentage rate, they direct it to the investments, in other suitcases they place them at the financial market – in the form of deposits, purchasing securities and so on.

According to the said above, effective functioning of the investment market may be provided only below the conditions of developed financial market and firm banking system. It this case market foundation of percentage rate, equal conditions for investments in regional and arm aspects, attractiveness of long-termed investments and the level of regulated inflation make vital conditions for interaction of investments and financial market.

Marketing mechanism cannot provide these conditions. Disorder regulation must conform to the economical currents on the a basis of which market mechanism reacts on changing conditions, it must foresee prediction of various results of the complex of influencing activities, make conditions for realizing potential possibilities of market mechanism in the form of antimonopoly activities.

 

 

Related Investing Articles

Ways of turning cash means into investments. Sources belonged to he investments in the objects of industrial and nonindustrial spheres, mostly come out in the initial form of cash means. Turning of these latest into the investments may be provided in different ways. The simplest way takes place in the case, when industrial subject manages and owns certain means, uses them for widening and improvement of manufacture and also for creation of nonindustrial objects. In the resembling type savings of those persons, which start activities with own savings turn into investments.

Though, in other suitcases turning savings into investments is a hard process. The fact is, that most part of the populace has no opportunity to provide investments straight into the manufacture, because for this they must have manners of enterprise administration, and of course, own certain minimal amount for this or those reasons. Part of the enterprise profit also does not turn into the investments.

Herewith, form one side, populace and some enterprises own free cash sources, from another, many enterprises need additional means for their investment program consciousness. Transmission of sources is realized by the channels of financial market, where owners of cash means appear to be the distributors of investment capital, and those persons, who influx sources – consumers.

Basic channels for transmission of cash means from distributors to consumers. Depending on how transmission of cash means is realized from distributor to the consumers, we can top out two basic channels at the financial market. First is the market of banking credits. Banks accumulate temporarily free cash means of the juridical and corporal persons. Of course, they pay certain percents at the influxed sources and later give credits to the borrowers (to those ones, who provide real investments) for high percent. Thus, process of money movement from the owner, to the borrower is realized with the help of a bank.

In many suitcases such way of transmission of the cash means answers to the interests of the cash owner. Though this latest takes too small percent from the bank, but thus he/she avoids the risk of not returning of money from the borrower. Except security, banking deposits are high liquidate, as the depositor can take own amount out and also investment of cash means is reachable even for the smallest depositors (owners of the savings).

Bank pays very small percent to the depositors comparing with those it takes from the borrowers, that’s why it is natural, that the distributor has a question to invest capital exactly into the relation with these borrowers.

As to the capital consumers (borrowers), it is advantage for them to get in direct touch with distributors. The fact is that being paid banking credit is often followed by fantastic difficulties. For example, often the bank doesn’t lend credit in the term, which is needed by the borrower; the bank may not have total amount requested by the borrower, for consciousness of the large-scale projects and so on. All these lead us to the large-scaled consciousness of attracting free cash sources together with the banking credit by capital consumers in other way – by emission of securities.

Somehow this way answers the interests of distributor of investment resources and their consumers. Distributors of resources (owners of savings) often are able to invest their sources in relatively advantage conditions, then banking deposits are and for longer period of time. Quite simple course of action of residency of sources is realized in the way of selling and purchasing of securities. Also, if securities are characterized by quite high level of liquidity, then the investor can invest wasted sources by selling own securities if necessary.

From the top of investment resources consumers’ view emission of securities has priority relatively to the banking credits. Hey (capital consumers) are given opportunity to influx cash sources from a lot of distributors of capital and accumulate large amount of money. Also, sources may be influxed for long period of time, sometimes for indefinite terms, if the affair touches upon securities.

Thus, market of banking credits and market of securities in the modern conditions appear to be necessary rings for investment processes, basic areas, with the help of which savings are turned into investments and are used for development of the manufacture.

As said above, depending at objects of capital investments they break real, financial and intellectual investments (drought 5.7.). Below real investments they mean residency of sources (capital) into creation of real assets (as of material, so immaterial ones), which are in touch with the consciousness of operative activities of economical subjects, salvation of their social-economical problems. Below financial investments they mean residency of capital into different financial instruments, in the first place into the securities.

Financial investments either have speculative character, or are oriented towards long-termed investments. They recognize to be the form of financial investment placements of sources into shares and securities, also into the loan banking deposits.

Financial investment oriented towards long-termed placements of sources is related with strategic goals of participation in the management of the investor’s object, in which the capital is invested.

Fictive capital. Concepts of real and financial investments are in close touch with the ones of real and fictive capital. In the economical journalism they usually mean securities below fictive capital. Real capital is placed into manufacture and securities serve for the title of material goods, which represent this capital. Financial capital is “the capital which exists in the face of securities, bring profit to the owners. Different from real capital, which is placed into various fields of the industry, fictive one has no inside value and is not considered to be real wealth, that’s why it has no gathering in the process of capitalist further manufacture.and, according to this, we want to pay attention to the subsequent: for each break owner securities (fictive capital) represent valuable, which brings to him absolutely real income. Though, from the top social capital securities don’t represent real prosperity. Growth or reduction of the value of functioning securities in the the upper classes may take place independently from real capital. According to this, securities appear to be a fictive capital.

Real capital of the the upper classes is developed at the expense of investments into the real assets, while fictive capital may be increased without financial investments, at the expense of course value of the securities emitted earlier. A significant example of the process of fictive capital growth is process of emission of the so-called produced securities. Here they don’s take into account real investments, but they give civil rights for purchasing securities already produced or emitted earlier. In this case financial investments are followed by the growth of real capital of the the upper classes.

Though, to our mind, this subject is not so simple, as it seems. The fact is that growth of the share course is realized not itself, but by the fact that the effectiveness of using real capital is growing.  The growth of course value of the enterprise shares expresses the fact, that the market gives too high estimation of the given enterprise.

Herewith, we can make a conclusion, that fictive capital is not a real wealth; it provides marketing estimation of real capital of the the upper classes in each given period of time. Imagine that we have two enterprises with absolutely identical real assets, though one enterprise uses these assets better and works more effectively. It is evident, that course value of the shares of this enterprise is higher, then those of other ones. That’s why fictive capital is being developed not itself, but expresses the position of real capital. Size of fictive capital is nothing but the marketing value of the real capital, the title of which is fictive capital considered to be.

Herewith it is hard to agree with, that “fictive capital acts no gathering in the process of capital further manufacture”. Securities (a fictive capital) play vital role in the process of further manufacture while turning of the savings into investments. A fictive capital (securities) makes income for its owners. Exactly the question of making profit makes the owners of the savings to invest sources into securities. Amounts gathered by the issuerare used for creation and purchasing of the real assets, accordingly the growth of the number of manufacture takes place.

Movement of financial investments reminds us the movement of loan capital. As K. Marx showed us, in the process of movement of loan capital one and the same capital amount appears in the degree of capital-owner and capital-gathering. Income of the functional capitalist is divided into two parts – into the loan percent and the income of the clerk. Below the conditions of weak development of the joint-have a supply of company free capital was place into the manufacture in the form of loan capital. Real investments in the manufacture are realized at the expense of own and loan capital from the functioning capitalists.

By consciousness of the joint-have a supply of form of the enterprise the character of the investment process is essentially changed. In this case, they mean the joint-have a supply of company may realize real investments at the expense of own sources (inseparable profit) or at the expense of banking credits. So, that they don’t apply for the financial investments.

Though, it is different in the case of joint-have a supply of company. While foundation of the joint-have a supply of company the founders are enter material goods, cash means, and intellectual material goods into the initial capital. Each deposit is estimated in the cash form and each founder buys a certain package of shares for appropriate share, which is entered into the initial capital of the the upper classes. Amount of one and the same investments turns into real or financial investments. the process of real capital growth is followed by the growth of fictive capital. Herewith, in this case real investments can not be realized without share emission, i.e. without financial investments.

In the case of growing initial capital of the joint-have a supply of company emission of new shares is taking place, then it is followed by real investments. Thus, financial investments are considered to be necessary attributes for the investment process. Real investments are impossible without financial ones. Real investments take completed face by consciousness of financial investments.

Widening of the manufacture may be realized, also by the borrowed sources, which are influxed with the help of emission of the loan securities. Consequently, even in this case the process of real investments is realized with the help of financial investments.

We have different situation, when we apply for secondary market of the securities. If the investors buy shares for already activated enterprise, then sources wasted for purchasing shares already are investments. But these sources get to the previous owner of the shares that’s why growth of the real capital of the enterprise doesn’t take place. It is same with the purchasing of securities of any kind at the secondary market. In this case (if the course of securities are not developed) the growth of fictive capital of the the upper classes doesn’t take place. Only the distribution of fictive capital among the members of the upper classes takes place. Thus, financial investments, which are realized in the forms of purchasing securities at the secondary market, are considered to be relatively independent form and it is not directly related with the process of real investments.

According to the said above, we can make the subsequent conclusion: financial investment is the connecting ring of turning of the savings into real investments. With its help the savings get into the manufacture; at the same time they can appear to be relatively independent form of the investments. Foreseeing the fact, that today joint-have a supply of company is considered to be quite spread, organization-legislative form of the enterprise; we may come to conclusion, that financial investments and security market play very vital role in the investment process on the way of turning savings into real investments.

Intellectual investment definition. Investment market is a hard system consisted of various structural fundamentals, among which there is a numerous connection. Scheme (in the drought 5.8.) represents a clear example about structure of the world investment market.

As seen from the matter, investment objects are divided into financial and material (real) assets. Each of them has quite diversified structure.

Financial assets concern financial and payment obligations of each kind, which are basically made by the economical agents while their work. This is cash money; deposits existed at the current financial statement, small-termed loan obligations, for example, shares and other financial documentation, which prove the material goods of right at the capital or setting arrangement at the movement of financial resources.

Material assets are: movable and unmovable material goods, lend, buildings, precious metals, commodities of long-termed usage, material valuables or inventory having small-terms of produced service and so on.

Modern structure of investment, in the first place, expresses significant surplus of the financial assets at material ones (accordingly 57.7% and 42.3%), ant second, in the structure of financial assets itself securities, small-termed obligations and financial statement having investment character reside in more and more larger place.

Correlation of financial and material assets of the investment market may be expressed by the coefficient of financial interrelation. Thought of involving such coefficient belongs to R. Goldsmith, who is the author of the works written about the structure of national wealth and financial systems of developed countries. This scientist in the second part of 50s and beginning of 60s worked out the method of estimate of the coefficient of interrelation. He calculated this coefficient as conformity of total financial assets with the size of material assets received by deducing of the country net foreign assets. Net foreign assets show conformity of foreign debt of the given country and its residents with the one, which are owned by the foreign country and its residents towards this county. Citizens, companies and other juridical persons have right to have financial statement abroad, to give credits to the foreign citizens and to have material goods abroad. Also, they are possible to get in debts themselves towards the foreign citizens. If the size of foreign material goods and financial wealth of the country resident surpluses debts towards the foreigners, then net foreign assets appear to be positive size and on the divergent.

According to the investment nature, which basic kinds of the investment market – financial and material ones, or the real investment markets in the modern conditions may be extra by the market of intellectual investments. This latest functions in the way of licenses, engineering-consulting service, Now-how, methodical processing, sales and purchasing of projects and others.

As in the marketing economics, so at the transmitting stage, alternative variants of using resources, investment resources among them. The principle of inter changing touch upon the realized investments as in the material forms, so in the human capital. It is well known that below the modern conditions investment in the human capital is very vital and gives a large profit. This is stated in many economical works.K. Sax and F. Lauren top to the investments into the human capital. They notice that investments into the human capital have a fantastic substance for marketing economics.Nowadays a theory of intellectual capital makes foundation to the consciousness of investments into the human capital.The authors of this theory concern, that intellectual capital is a hard category. It is wider than the human capital, as in it information is considered to be the independent industrial resource.Investments into the intellectual capital differ from the ones realized into the human capital. It also concerns the fundamentals of structural capital, which means investments realized into the furniture, computers, programs, patents and trade marks. On the basis of intellectual capital theory a concept of social partnership was formed. This conception leans upon the investments placed into the social capital. Social capital theory means relations of mutual help and development of trust relation in the break groups or readiness of participation in the unions. More educated and qualified workers have more possibilities for formation of social capital and economical macro-system. On the basis of investments realized subjective leaders of attractive investment surrounding is formed in the social capital, that influence significantly upon the development of intellectual investment market.

Intellectual investment market has the subsequent peculiarities:

First, intellectual investment market is the consisting part of service market. It provides consciousness of point commodity by straight contracts between producers and consumers. Herewith, trade mediating is not the exception. Though there is a principle distinction between mediating and consuming commodities at the market of intellectual investments. Analyzes of different researches show, that in the conditions of transitional period growth of the share of mediator structures in the section of consuming commodity of fantastic request take place in Georgia. The mediator is not requested to have a special knowledge, only initial information is enough. Of course, mediating at the market of intellectual investments requires high qualification level of the firms’ specialists. The mediators themselves, which unite “producer-consumers”, are not many. Herewith, mediator service at the market of intellectual investments is different form analogue service of the market of fantastic request commodities in the equal conditions by quality and effectiveness (at the expense of reducing expenses of the attracted sides).

Second, the market of intellectual investment influences greatly upon capital movement and the market of labor forces.

Third, intellectual investments are protected by the disorder from the foreign competition, also by export and import of final result of using intellectual investments. Functioning of the market of intellectual investments cannot exist without safeguard of civil rights at the objects of intellectual material goods.

Fourth, for entering global market by inside market organizations and intellectual investments additional are not needed.

Fifth, formation of market principles is point at the results of using intellectual investments.

Principles of intellectual investment products have not direct connection with the work spent on it. The value of intellectual investment product is defined by what it gives by using in the manufacture process. Herewith, value of intellectual investment process is defined as face of look received by this product usage by money.

Market value at the intellectual investment product is formed as agreement one, by using two prices (of seller and purchaser). The purchaser may apply for the fact that a profit received from using intellectual investment product, minimally, is to compensate the expenses made by the seller for selling this product and also expanses of the buyer for its consciousness. The seller doesn’t often sell the intellectual investment product, but transmits only the right for its using. Thus, agreement value on this manufacture is close to the buyers’ one in practice.

Consciousness of intellectual investments at the market may be provided in the subsequent forms:

-      by transmitting civil rights for using licenses, Now-How, commodity sighs and so on;

-      by selling-transmission of Now-How, technological experiences and so on. Agreements on such acts of sell and buy from license agreements are different by the fact, that the owner of Now-How doesn’t refuse its selling, but doesn’t agree with its patenting;

-      by as long as engineering services;

-      by transmission of technologies, in the way investment partnership, within the bounds of which takes place not only sell and buy, but in other ways of its distribution consultations, qualifying specialists, transmission of droughts and technological exchanges.

Engineering is one of the basic forms of consciousness are the market of intellectual investments. It means as long as different engineering-consulting service on the commercial basis. They divide engineering service into two groups: 1) service related with preparing manufacture process; 2) service related with provision of normal continuing of the process of manufacture and its consciousness. To the first assemble belong: a) pre-projecting service (social-economical researches; topographic processing and plotting of location; researching grounds; searching for the minerals; technical-economical statement of project and so on); b) projecting service (preparing general plot and recommendations; estimation of expenses made on its exploitation beforehand; preparing technical specialists and so on); c) further service of he project (preparing contracting documentation; organization of auction; estimation of suggestions; making contracts; managing construction process; making and granting certificates about finishing work, making technical conclusion about construction and so on); d) special service (researching about utilization, various juridical procedures and so on). To the second assemble of engineering service belong: service related with the managing and organization of the manufacture process, service related with the examination of the object; consultations in the financial questions; service related with the manufacture consciousness (researching the conjuncture of the market, advertisement organization), service related with the involving the system of informational provision and so on. Engineering consultations, in the conditions of deficit of high-qualified personnel, can provide academically the investment process, help firms to rise effectiveness, fasten circulation of the investment resources.

Portfolio investment market is the consisting part of the financial investment market. By forming the upper classes of share-holders and with the help of financial institutional investors, their activity at the financial investment market support significantly accumulation of independent cash sources in the country, also attracting of foreign investors, fastened circulation of financial investments, effective insurance for financial-investment risks and so on.

For clearing investment motivations up and defining levers is disorder influence we thing advisable discussion of peculiarities of the investment circulation in the process of further manufacture of material (basic and income) and financial capitals.

Investment circulation in the process of investment activity is realized in the subsequent basic directions:

investments in the material assets (manufacture of basic and income capital); investments in financial assets; investments in the intellectual valuables.

Let’s discuss investment circulation in the process of further manufacture of the material assets (basic and income capitals). Its each element may be divided into movable and unbending properties. Furniture, mechanisms, income capital belongs to the fundamentals of movable corporal capital and fundamentals of passive part of basic capital (buildings, equipment, industrial infrastructure) – to the unmovable one.

Further manufacture of the movable corporal capital is realized in the industry, and of unmovable ones – in the construction. Investment activity may be realized in the way of showing of unmovable material goods, furniture and other fundamentals of corporal capital at the market, or in the case of absence of needed commodity, in the way of their manufacture (construction).

Investment activity may be realized at the expense of different sources: own, borrowed, attracted sources for investments, budgetary assignations. Structure of sources depends at organization legislative forms of active and newly formed enterprise. Investments may be showed as in the cash, material forms so in the face of material goods civil rights and intellectual potential. Foreseeing said above, investment circulation in the further manufacture of a corporal capital might be represented in the subsequent way:

Economical essence of the given chain of transformation exists in the subsequent: investments in different for (cash, productive, commodity) are placed into the objects of investment requirements for industrial activity. After this a process of transformation of investments into industrial factors takes place. Thus materialization of investments takes place, which appears in the face of rising value of investor’s capital material goods.

Exactly the new transformation of capital value finishes investment circulation in the Soviet economical journalism. They departed artificially stage of formation of new capital value and stage of their functioning, which defines real level of income of profitableness of these valuables, and finally the period of self-compensation of investments.

As main goal of investment are making profit, investment circulation certainly concerns a period of exploitation of bought capital valuables till the moment of financial recourses, by which investments in the capital manufacture are compensated.

In this case, manufacture, which is produced in the form of investment commodity, is realized at the markets of different investments (real estate, furniture, materials and other markets).

What is the distinction between investments and investment commodity, as they coincide with each other in the material form and ability of making income? To our mind, basic distinction is in the “universality” degree of investments and investment commodity. Any investment commodity for consciousness at the markets in the future becomes a factor of manufacture in concrete material or cash forms. Material transformation of a capital doesn’t mean further manufacture, it may be even threadbare – morally and physically, and investments, as they are movable form of cash capital – may make endless and permanent profit. To our mind, this makes investments different from the investment commodity.

Investments into the financial assets take place in relation with their profitableness norms. Income, according to the different financial assets, is divided into dividends (kind of industrial income) and percents. This is defined by what capital they represent – industrial or loan.

A process of investments into the financial assets may be represented in the subsequent way:

First, intellectual investment market is the consisting part of service market. It provides consciousness of point commodity by straight contracts between producers and consumers. Herewith, trade mediating is not the exception. Though there is a principle distinction between mediating and consuming commodities at the market of intellectual investments. Analyzes of different researches show, that in the conditions of transitional period growth of the share of mediator structures in the section of consuming commodity of fantastic request take place in Georgia. The mediator is not requested to have a special knowledge, only initial information is enough. Of course, mediating at the market of intellectual investments requires high qualification level of the firms’ specialists. The mediators themselves, which unite “producer-consumers”, are not many. Herewith, mediator service at the market of intellectual investments is different form analogue service of the market of fantastic request commodities in the equal conditions by quality and effectiveness (at the expense of reducing expenses of the attracted sides).

Second, the market of intellectual investment influences greatly upon capital movement and the market of labor forces.

Third, intellectual investments are protected by the disorder from the foreign competition, also by export and import of final result of using intellectual investments. Functioning of the market of intellectual investments cannot exist without safeguard of civil rights at the objects of intellectual material goods.

Fourth, for entering global market by inside market organizations and intellectual investments additional are not needed.

Fifth, formation of market principles is point at the results of using intellectual investments.

Principles of intellectual investment products have not direct connection with the work spent on it. The value of intellectual investment product is defined by what it gives by using in the manufacture process. Herewith, value of intellectual investment process is defined as face of look received by this product usage by money.

Market value at the intellectual investment product is formed as agreement one, by using two prices (of seller and purchaser). The purchaser may apply for the fact that a profit received from using intellectual investment product, minimally, is to compensate the expenses made by the seller for selling this product and also expanses of the buyer for its consciousness. The seller doesn’t often sell the intellectual investment product, but transmits only the right for its using. Thus, agreement value on this manufacture is close to the buyers’ one in practice.

Consciousness of intellectual investments at the market may be provided in the subsequent forms:

-      by transmitting civil rights for using licenses, Now-How, commodity sighs and so on;

-      by selling-transmission of Now-How, technological experiences and so on. Agreements on such acts of sell and buy from license agreements are different by the fact, that the owner of Now-How doesn’t refuse its selling, but doesn’t agree with its patenting;

-      by as long as engineering services;

-      by transmission of technologies, in the way investment partnership, within the bounds of which takes place not only sell and buy, but in other ways of its distribution consultations, qualifying specialists, transmission of droughts and technological exchanges.

Engineering is one of the basic forms of consciousness are the market of intellectual investments. It means as long as different engineering-consulting service on the commercial basis. They divide engineering service into two groups: 1) service related with preparing manufacture process; 2) service related with provision of normal continuing of the process of manufacture and its consciousness. To the first assemble belong: a) pre-projecting service (social-economical researches; topographic processing and plotting of location; researching grounds; searching for the minerals; technical-economical statement of project and so on); b) projecting service (preparing general plot and recommendations; estimation of expenses made on its exploitation beforehand; preparing technical specialists and so on); c) further service of he project (preparing contracting documentation; organization of auction; estimation of suggestions; making contracts; managing construction process; making and granting certificates about finishing work, making technical conclusion about construction and so on); d) special service (researching about utilization, various juridical procedures and so on). To the second assemble of engineering service belong: service related with the managing and organization of the manufacture process, service related with the examination of the object; consultations in the financial questions; service related with the manufacture consciousness (researching the conjuncture of the market, advertisement organization), service related with the involving the system of informational provision and so on. Engineering consultations, in the conditions of deficit of high-qualified personnel, can provide academically the investment process, help firms to rise effectiveness, fasten circulation of the investment resources.

Portfolio investment market is the consisting part of the financial investment market. By forming the upper classes of share-holders and with the help of financial institutional investors, their activity at the financial investment market support significantly accumulation of independent cash sources in the country, also attracting of foreign investors, fastened circulation of financial investments, effective insurance for financial-investment risks and so on.

For clearing investment motivations up and defining levers is disorder influence we thing advisable discussion of peculiarities of the investment circulation in the process of further manufacture of material (basic and income) and financial capitals.

Investment circulation in the process of investment activity is realized in the subsequent basic directions:

1.   investments in the material assets (manufacture of basic and income capital);

2.   investments in financial assets;

3.   investments in the intellectual valuables.

Let’s discuss investment circulation in the process of further manufacture of the material assets (basic and income capitals). Its each element may be divided into movable and unbending properties. Furniture, mechanisms, income capital belongs to the fundamentals of movable corporal capital and fundamentals of passive part of basic capital (buildings, equipment, industrial infrastructure) – to the unmovable one.

Further manufacture of the movable corporal capital is realized in the industry, and of unmovable ones – in the construction. Investment activity may be realized in the way of showing of unmovable material goods, furniture and other fundamentals of corporal capital at the market, or in the case of absence of needed commodity, in the way of their manufacture (construction).

Investment activity may be realized at the expense of different sources: own, borrowed, attracted sources for investments, budgetary assignations. Structure of sources depends at organization legislative forms of active and newly formed enterprise. Investments may be showed as in the cash, material forms so in the face of material goods civil rights and intellectual potential. Foreseeing said above, investment circulation in the further manufacture of a corporal capital might be represented in the subsequent way:

Thus, whole system of investment market forms total investment-market space. In this space a market of financial investments is filled by real and intellectual investment market.

Lamara Qoqiauri

Real Limb of Georgian Academy of Fiscal Sciences

and New-York Academy of Science;

physician of Economics; Professor

 

Again about investment financing of the banks. As practice shows, long-termed financing of programs doesn’t take place spontaneously, but it means analyzing and control of current activities of the enterprises. For satisfaction of such requirements, unfortunately, not each enterprise appeared to be ready. There, where all these requirements are satisfied, banks become active participants in processing plans of approach and financial provision of investment activities of the enterprises.

A special attention is vital by such direction of the activities of commercial banks, as project financing is, which, to our mind, requires administration and financial support from the government, we mean the condition, that for effective salvation of investment problems it is necessary to make finance-industrial groups, and holding unions, which, in its turn, represents initial form of forming thick financial capital at the market and confluence of bank capital to the industrial one.1 This will give rise to the growth of investment number in the economy and growth of effectiveness of capital investments. Of course, creation of such unions will be really supported by commercial banks, but this is interrupted by such condition, that groups made today provide this activity in unregistered form and nobody is attracted in their registration. This is supported by incomplete logistic, slow development rates of the institute of private material goods, interruptions in consciousness of agrarian reforms, provision of accounting calculations of financial structures in incomplete form and existence of break statements working opposite to the creation of holding unions in the low about industry. All mentioned above may be solved immediately, by processing special low about investment activity and on the basis of its setting by the parliament in a small period of time.

It must be mentioned, that there are enough conditions for widening financial investments in the economy from the bank side because of the existence of free cash means. It is vital, that these financial resources were influxed and to make a system of rational organization of purposeful usage, which must be expressed by processing of the investment policy. Here an vital meaning belongs to the investment policy and right definition of tactics.

What problems are there in front of the banks? It is also to be mentioned, that commercial banks have numbers of problems while consciousness of their investment activities, which prevent their normal functioning. We mean the banks, working on financing investment projects, in fact, represent only one unit in the system of private institutions. We consider subsequent to be preventing conditions of their activities:

· Existence of marketing center of the investment projects, a coordinating organ in the country scale, which would play a gathering of regulator in the financial provision of the investment projecting;

· Unacceptability o the information about position of a potential borrower or investment institution;

· Refusal of creation of deposit web;

· Low level of development of the investment funds existed today;

· Absence of disorder investment bank, total point organ of financing investment activity and, consequently, spontaneous distribution of the functions of investment banks working abroad below the conditions of market economics among Georgian commercial banks.

It must be also mentioned, that there are many economical factors, which may influence negatively upon consciousness of investment processed by the banks and nobody can define beforehand nontransiency of probable risk chance of these factors. Herewith, widening of working sphere in the investment activity of commercial banks objectively requires: giving more independence and civil rights to the commercial banks, growth of effectiveness of long-term investments and growth of incomes, relatively with those received from small-term financial operations, fastening of this process, ll kinds of supports from the side of the government and finally, further statement of unwariness and firmness of the activities of banking system.

About necessities of as long as structure institutional reforms in the country. For guaranteeing firmness of banking activities structure-institutional reforms, min goal of which is training for new stage of development of banking field, come to the first place. Essential of the mentioned reforms is conditioned by the position of financial market of the country. New institutions, as mentioned in the works of D. Nort – the laureate of Nobel Premium, are formed in the case when the the upper classes sees the possibility of making profit, which is impossible during active institutional system. Maximal investment activities of banks are possible during many-fielded system o a financial market. This is a result of logical development of competition, as it solves problems of optimal usage of financial resources. Exactly this many-fielded character reduces and stops crisis in the country.

Many-fielded character of the banking system is characteristic to the most part of developed countries (the USA, countries of western Europe, Japan) and also for the countries having transitional economics, which applied for firm economical growth in the last decimal (China, Poland, Brazil and others). Exactly this many fielded banking system gives possibilities for using various types and forms of financial service in economics by credit department.

In this system the disorder makes various mechanisms of artificial reduction of competition among financial organizations. An evident example of this is separation of credit institutions into commercial and investment-credit institutions in the USA, also reduction of the bans of countries in the sphere of consciousness of many year credit investments and separation of disorder bank into break category.

About development of small-scale business in Georgia. Creation of advantage regime for small-scaled business, in the first place, regulates creation of competition able outer conditions of the investment activity, which must be certainly foreseen in the activities of the country’s banking system. It must also be mentioned, that according to the development and improvement of the economy in the future, perhaps, such activities may not be needed, but below the conditions of transitive economics their substance may not be specially noticed. It is natural, that many-fielded financial sector is formed only below the equal conditions of competition, as there is reason-resulted, reverse-influencing relation. Mentioned relation between many-fielded financial sector and competition is expressed by that it helps creation of advantage regime for the investment activity being in the position of an kernel and its further development.

Briefly about disorder regulation of the investment process. According to the many-fielded principle of the financial market, the disorder must work out such a system of regulating investment activity, which guarantees “peaceful” coexistence of various financial institutions notwithstanding their size and specialization. Banks of each category must “act” in their marketing “sphere”, while regulation of banks of different levels from the disorder is stated according to the policy of regulation. Privately, to our mind, it is vital to top out and regulate activity spheres of those banks, which use a capital of governmental organs. Below the conditions of many-fielded system of a financial market competition carries “honest” character and this is why such system is much firmer. Privately, in case of many-fielded system, below the conditions of concrete fight, while financing concrete disorder programs by forming a system of specialized disorder banks usage of disorder resources is possible more effectively. In this case objective usage of lobbing of disorder resources from the side of commercial banks is not allowed. For example, in Germany consciousness of disorder projects of ecological, agrarian, construction and other fields are provided by specialized commercial banks. There are specialized credits in the banking system of other developed countries (Japan, Italy, France and so on) too. Such practice significantly reduces chance of incorrect usage of disorder resources below the conditions of competition fight.

One of the most vital factors, which degrade effective development of real sector of the economy, is the irrelevance of the needed financial capital for the regional services. Basic number of financial resources from the enterprises is accumulated in the center. Such situation is in a way justified for the disorder, but it is absolutely insoluble in relation with the private companies.

According to the various estimations, regional banks control not more, than 20-30% of inflow of financial resources of the regional enterprise, and this seriously degrades development of the local banks and enterprises. Thus, for solving problems about lack of resources for crediting real sector of a small economics of regional banks, question related with it, must be discussed in relation with outflow of financial resources from the region. Solving of these problems by administrative activities is impossible, processing of appropriate economical activities is needed. We mean the condition, that together with the growth of the share of local budgetary tax income, it is vital to define responsibilities of the budgets of municipal creations in the development of regional economics. Thus, financial federalism is that necessary condition, which guarantees, from one side, formation of balanced market of financial service, and, from nother, further development of the investment activities on the basis of appropriate legislative base.

What does a financial federalism bring to the financial market? Creation of equal conditions for the competition below the conditions of financial federalism will naturally lead us to the formation of many-fielded system of the financial market. Such process also gives rise to the creation of thick financial centers on the basis of the existed and newly formed banks. Thus, development of regional banks within the bounds of the conception of banking industry development, gives rise to the growth of financial potential o regional economics. At the modern stage conditions of development of bank arm sphere are being widened more and more. Today banks mostly provide sources of basic financial capital inflow in the way of “region-center”, after transition to the real federalism many-fielded banks transform into the banks as long as sources for financial capital outflow among the regions.

It also must be mentioned, that it is vital to grow the substance of banking business, which must be expressed by forming town and country credit relations, mutual crediting and insurance societies, and loan-constructing associations. All these must be foreseen in Georgia in the process of banking system development and, accordingly, an adequate logistic must be set for advantage conditions for development of small and middle banking businesses, because formation of effective financial system in the regional scale is absolutely impossible. Therewith, if we take into account the fact, that the investment portfolio in the structure of joint assets of Georgian commercial banks did not overcome 1% for the first of January of 1999, and 4% for the first of January of 2005, this speaks for the tendencies of growing portfolio investments.

Attraction of foreign investments. Globalization and internationalization of the world’s industrial relations gives rise to the growth of the role of foreign investments, as financing investment activities.

Essence and types of foreign investments. Foreign investments are hose capital resources, which are full out of one country and invest abroad in this or that industrial activity, for the purpose of making industrial profit or receiving percents. Foreign investments may be realized in various forms. While analyzing this form we can use distinguished methods of deal with for classification of the investments, which men their separation from each-other according to the objects, purposes, terms of investments, forms of material goods on the investment resources, risks and other signs. Herewith, the essential of point of foreign investments defines statement of number of classification features for the investments of this type.

For example, foreign investments may be disorder, private and combined according to the material goods forms on the investment resources.

Disorder investments are those resources of disorder budget, which are directed abroad by pronouncement of the government or inter governmental organizations. These resources may have the face of disorder resources, credits, grants ot support.

Private (nongovernmental) investments are resources of private investors placed into those objects, which are placed out of the bounds of given country.

They call combined investments joint residency abroad of the resources of the private investors and the government.

According to the character of usage, foreign investments may be industrial and loan.

Industrial investments are direct or indirect ones placed into the business of this or that type for taking some civil rights for making profit of dividend kind. Loan investments are related with the distribution of resources below the loan condition, for the purpose of receiving percent.

While analyzing foreign investments, apportioning of straight, portfolio and other investments is of a fantastic substance. Movement of foreign investments according to the global currency funds and methodology of the countries’ taxation balances are reflected in this section.

Briefly about legislative situation of the foreign investments in Georgia.  As shown in the chapters above, “investments” conceptually express long-term residency of the capital of solid quantity for the purpose of making profit. According to the Georgian low “about support and guarantees of the investment activities” investment is considered to be the valuable of each material goods and intellectual kind or the right, which is invested for the purpose of making possible profit and is used in the industrial activities provided on the Georgian territory. It may lean upon as inside (inside country), so outer (foreign) sources.

Here a fantastic attention is paid to the investment surrounding (climate), which means real conditions existed in the country for the investments. It defines intensive attraction or declining foreign capital for the long-term investments. I.e. according to the concrete condition, investment surrounding may be as advantage, so in advantage, which is foreseen by each investor before making concrete step. Fundamental analyzing of the investment climate existed in the country and foreseeing risk factors are the basic goal f each investor.

Thus, it is certainly hard to say, is present situation in Georgia excellent or terrible. It would be more right if we say that there are as advantage (stimulating), so preventing conditions in the country.

Foreign investments in Georgia are prevented by constitution, by the low “about support and guarantees of the investment activities” and by two-side agreement about investment encouragement and safeguard. Today Georgia has signed agreements with more then 23 countries about mutual support and safeguard and with 111 countries – about avoiding two-side taxation.

Legislative foundations and guarantees of their safeguard of consciousness of local and foreign investments in Georgia are defined by the low about guarantees and support of the investment activities, according to which foreign and local investors use equal civil rights. Privately, while consciousness of investment and industrial activities civil rights and guarantees of the foreign investors must not be less then those of the local juridical and corporal persons.

According to the same low, corporal and juridical person, also global organization, which provide investments in Georgia are considered to be the subject of the investment activity.

It must be mentioned, that after paying taxation and compulsory payments, a foreign investor gains right for unreduced repatriation abroad of the profit received from investments and other cash resources, and this may reduced only on the basis of the low – according to the court pronouncement in case of bankrupting, crime or not fulfillment of civil obligations. Herewith, foreign investor has right to take abroad the material goods being below his/her material goods.

Georgian low “about supporting and guarantees of the investment activity”. Positive and negative sides. Georgian low “about supporting and guarantees of the investment activity” foresees as preventing and reductions in the sphere of as long as investments, also the guarantee of protecting them, which means untouchable character of the investments and compensation in case of taking away investments within the bounds of the mentioned low. The compensation, which is given to the investor in case of taking investments off him/her, must conform to the real market value of the full investments for that moment, when the full off takes place. The compensation must be granted without any hamper and it must concern that loss of the investor from the moment of taking off till paying of the compensation mount.

It must be mentioned, that a new legislative act, which somehow worsens conditions of investments stated by this low, isn’t spread on already realized investments, ten years after its setting. In such case the investor realizes his/her activity according to the actual low until the new one is place down to the action.

A quarrel between foreign investor and disorder organ, if the method of its pronouncement is not defined by dual agreement, is solved at Georgian court or in the global center of the investment quarrel. In the case, if the quarrel is not discussed in the global center of investment quarrel, the foreign investors have right to apply for the additional institute of the center or any other global arbitrageur organ, which is founded according to the policy set by the arbitrageur and global agreements of the commission of global trade low of the United Nations. Arbitrageur court of global trade palate in Georgia functions from December 11, in 2000.

According to the arithmetic showing, the most attractive sectors for the foreign investors were manufacture of oil and gas, energetic, telecommunications and food industry according to the statistic showings during last years. Among largest investors there are such companies as Frontera Resources Corporation (USA), which has invested more then 30 million US dollars into Georgian oil manufacture; Metromedia global – 40 million US dollars of investments in telecommunication; Pernod Ricard (France) – with the investments in alcohol manufacture; AES (USA) – investments in distribution and generation of electro power.

By comparing showings we learn, that according to the hydro energetic potential, Georgia significantly overcomes such countries rich in the so-called “White Coal”, as France, Italy, Spain, Sweden, Romania and others. Though virtually, less then 15% of real possibilities are used, and this gives large perspectives to the foreign investments in Georgia.

The fact is to be mentioned, that the foreign companies are attracted in the process of privatization of disorder material goods, which is one of the most vital part of the realized economical reform in Georgia. The fact, that foreign capital is invested in more then 100 Georgian companies proves this.

For influxing foreign capital into Georgia a positive surrounding is made by the existence of advantage conditions for development of such reduced fields, as oil manufacture, black and colored metallurgy, break kinds of mechanical engineering, mountain chemical industry, bottling of fresh and mineral water, manufacture of construction and decorating materials, tea, wine, fruit, citrus, wool, tobacco, industry of their refining and others.

Though foreign companies provide capital investments into these fields, for example, in agrarian and food industries, but it is provided in a very small quantity.

Factors of drawback surrounding in Georgia. Among those factors, which give rise to the drawback climate for influxing foreign investments in Georgia subsequent are to be mentioned:

· Political strain and not quite seldom proof of lobbing business with unacceptable methods by the representatives of executive and legislative government, this takes away the basis of healthy competition as in common, so among the investors;

· Violation of the territorial integrity of the country, ethno conflicts, Not controlling of Abkhazia and South Alania (Smachablo), difficulties with protecting disorder boards, which spreads usually the door to contraband and prevents growth of risk factors of  influxing of as native, so foreign investments;

· From the beginning of 90s of last year, analogue to the countries of post soviet space, sharp economical, financial, energetic, food, ecological and other crises developed in Georgia for not ordinal conditions, gave rise to the backwardness of our country’s economy for some decimals. It would be enough to say, that a level of whole European product consisted only 36.8% in 1999, compared with 1991. This was the lowest showing in whole post Soviet space. Such destroying of economical functioning, evidently, reduces requirements on foreign investments and significantly restricted their influxing;

For the purpose of statement of the level of spreading negative occasions mentioned above and processing appropriate recommendations World Bank and European bank of reconstruction and development provided joint research, where they learned 22 countries having transitional economics. According to these researches they made a conclusion, that a showing of “disorder obedience” (of corrupting, taking into hands) in these countries consists mean 21%. It must be mentioned, that same showing consists 24% in Georgia. What about mean level of administrative corruption, it reaches up to 3%, while in Georgia – 4.3%.Iit is natural, that made situation fears foreign investors and prevents influxing of their capital in a large quantity in our countries.

According to the experience of last years, giving disorder guarantees to the foreign investments is more hard. Though, if it were simple to achieve, it would not be enough for the foundation, as Georgian disorder doesn’t stand on the firm positions, for making n investor sure in stability of the country. For comparing let’s discuss investment surrounding of Czech Republic, privately, that part, according to which investment logistic of the country foresees from April 1998 such scheme of advantages, which concerns taxation, custom and those of certain regions, also, grants for creation working places and so on . According to the mentioned analyze subsequent is cleared out, that equal priorities in using advantages are given as to the foreign investors, so to the local ones. At the same time, if we pay attention to the showing of inflow of straight foreign investments into Czech Republic by years, we’ll see, that after the quantity of straight foreign investments had been reduced in 1997 (1300 billion USD) relatively to 1996 (1428 billion USD), in 1998 it was doubled and consisted 2720 billion USD, and in 1999 equaled to 5108 billion USD. One of the stimulating factors of the mentioned progress must be considered involving a system of advantages activated in Czech Republic from 1998.

Unfortunately, there is not a firm system of foreign investments and insurance yet in Georgia, which would significantly help the process of making investment surrounding healthy and inflow of a large amount of investments from abroad.

Factors preventing development of the country economy – significantly wide scales of shadow economics and corruption, so-called distribution of influence spheres by clans, setting of a barrier in this or that spheres of business especially prevent, from one side, development of local business and, from another – influxing of large-scale global investments.

How to use global legislative norms in the Georgian investment activities. Thus, a lot of problems (complex of problems) are formed in the process of attracting and using of foreign investments, and they are regulated by legislative norms.

Whole logistic regulating foreign investments may be grouped in the subsequent way:

1.  special norms;

2.  total civil norms;

3.  norms of global agreement.

To special logistic in the first place belong special logistic and its subsequent acts of quite large quantity.

Civil logistic regulates and conditions relations of foreign capital and enterprises participating with numerous counteragents. We mean various kinds of agreements, questions of representation, researching questions and so on. Thus, civil logistic is used in the case, when regulation of the activities of foreign investors is not provided with the special one, for its tight direction.

Norms of global agreements is the part of the country’s legislative system. Global agreement gains special substance during global economical relations. Activation of the mentioned norm is basically spread on attracting and usage of foreign investments; subsequent legislative acts belong to this sphere:

1. Global dual agreement of mutual safeguard and encouragement of the investments. Dual agreements of foreign investments are discussed in this sphere as additional guarantees of the norms foreseen in national lows. Capital exporting countries and their investors consider that safeguard of foreign investment is more effectively solved in the way of inter-safeguard and encouragement of investments.

2.  Global two-sided agreement for avoiding double taxation. Such agreement usually defines sources of income – profit and material goods, which is taxed in the country without any reduction. It is being set, which incomes (profit) and material goods may be taxed in the country – with some reductions and what source of incomes may be set free from taxations;

3. Many-sided conventions. From those global conventions, which regulate relations related with the investments, two are vital – Seoul Convention about stating many-sided agencies of protecting investment guaranties (1985) and Washington Convention about solving quarrels (1965).

Involving of many-sided system of investment guarantees was outrun by creation and development of disorder system of insuring capital export in the developed countries.

Before making pronouncement about residency of sources by the foreign investor, one of the vital conditions is – guarantees of security and safeguard of capital investments in that country, where investments are inflown, the disorder takes obligations – to guarantee protecting of foreign material goods, guarantee of civil rights and interests of the foreign investor, guarantee privacy of consciousness of investment activity of the country territory. Thus, below the conditions of strict competition, disorder forms as much liberal regime for foreign investors as possible.

What difficulties are there in Georgia from the top of attracting foreign investments? Difficulties of certain kind are expressed today in the developing countries and, accordingly, in Georgia in the affair of attracting foreign capital and its effective usage. We my name subsequent reasons for this:

· Regulation of the activities of foreign investors is being paid hard with the absence of stabile legislative base;

· Worsening of material position of the most part of the country populace gives rise o the growth of social tension;

· There still are criminal and corruption in some sectors of industrial activities;

· Inappropriate level of infrastructure development; also of transport, communications, system of telecommunication, hotel services, roads and so on;

· High level of unsteadiness of total politics, privately, instability of logistic and court system;

· Absence of joint disorder investment policy in the business of attracting foreign investments;

Herewith, notwithstanding the difficulties named above, the country owns fantastic potential, what may be the subject for fascinating foreign investors. Privately:

· Rich and comparatively cheap resort and tourist resources;

· A large inside emergent market;

· Richest capital of mineral and curing waters;

· Comparatively cheap qualified labor  force;

· Quite high staff of marketing development, which can master new technologies of manufacture successfully and quick;

· Absence of honest competition by Georgian producers;

· Current process of privatization and possibilities of foreign investors in it;

· Possibility for making high profit very quick.

Thus, we can make a conclusion that, compared with the countries of Western Europe, notwithstanding large economical backwardness, Georgia can develop total investment activity comparatively quicker, with the help of right and effective usage of native and foreign investments.

 

Lamara Qoqiauri

Real limb of the Academy of Economical Sciences of Georgia and New-York Academy of Science, physician of Economics, Professor

More Investing Articles

About the universal deal with. The universal deal with is the direction of methodical knowledge and the methodology of social practice, which is based on the discussion of the objects in systems. it is used as an instrumentarium, which directs the research to the substantiating the wholeness of the object, discovers various contacts in it and gathers them into the total complex.

The universal deal with in its essence is the concrete principles of the dialectical materialism, in the bounds of which, we can discuss the investment process the series of those operations (the kinds of activities), which is fulfilled at the beginning capital (the preface of the process). It increases the value and conditions a certain result (the exit of the process). It is possible to learn the investing process from the position of the universal deal with, because the investment process is an economical system and it has a preface – the complex position of this system (investment surrounding) and exit – the changes of the entering investments into the economical system. The result of investing process got at the exit, defines the development of the economical system, in which the process is vacant on, and gives in it rise to the rates of the economical growth.

Ruling the investing process. The investment process is realized by ruling. It is discussed to be such a approach, which guarantees achieve maximum effectiveness and it leads each kind of activity to the maximal growth of the economical system. Ruling consists of the subsequent active cycles:

1.  the analyze of the current position of the investment process, in which consists of: the analyzes of the investment attractiveness and investment business, satisfaction of the requirements for investments of the economical system;

2.  definition of the showing of number needed by the investments and of the investment attractiveness, to which this number is conformed;

3.  Working out activities which provide needed position of the systems’ investment attractiveness;

4.  The changes of the incomes in the investments of the economical system, which is provoked by the changes of investment attractiveness;

5.  Changing of the parameters of economical system at the investors’ expenses, which exists in the changing of the rates of economical growth.

Permanent consciousness of this cycle improves the ruling system of the investment process and increases the defectiveness of functioning of the economical system.

The consciousness of the universal deal with is situated in the analyzing the investment process not only in the horizontal section (the ruling subject – investment attractiveness – investor – investment business – the number of the investment – investment object – ruling subject), but also in the vertical one (the world comradeship – country – region – field – manufacture – corporal person). Such discussion reduces the quantity of repeated activity of the ruling of investment process and gives the complex theoretical picture of the investment process.

For preparing and realizing effective investment policy it is vital to define visibly and simply the criteria of estimating the investment situation formed in the country, economical fields and regions; also working out methodological apparatus adequate to the economical regalia and its successive usage.

The investment process (that is the process of realizing investments) has each figure of the system: there always is in it a subject (an investor), object (investment object), the connection between them (investment in the purpose of being paid income) and surrounding, in which they exist (investment surrounding). It is characterized with a special structure and the opportunity of an rigorous identification between other economical process. It displays its features as a result of interaction with other systems, protects a certain conception and reflects the points of view, aims and principles of the subject of the investment process. Connection is the system-forming factor, because it unites all other fundamentals into one whole (pic. 1). the universal deal with gives an opportunity of exhaustive description of the investment process essence and defines fully its basic concept.

 

The investment process is defined by the formed interaction about situating investments between the investment subject and object for being paid income, also the realized investing influence from the side of subject and ruling organs upon the object; and changing of the conditions of investment surrounding.

Place of the investment process in  the system of social relations. The investment process doesn’t exist itself and it is always involved into the sphere of subsequent level, that is to say that it must be discussed in the leap of the total deal with – discuss the system in the sphere of the interconnections with other systems. This gives us an opportunity of describing the place and role of the investment process as in the break sphere of the activity and also in the system of the social relations. Each subject is oriented towards the development and always demands the supplementing of resource and changing this or that figure. The orientation towards the supplementing this deficit with own forces, slows the economical growth, because it demands from the subject to provide amused activities and wasting the time the its basic resources on this. In the conditions of specialization, the reducing of own forces makes the subject search for the object, the features of which give him an opportunity of of filling the existed deficit with a minimal investments. The need of investments appears, when the potential of the chosen object does not satisfy the necessary criteria and needs a kind of outer participation for its development. The possibility of the investment development occurs when the resources owned by the subject and its features give the opportunity of needed influence of the object upon the demanded features of the object.

At the moment of fulfilling the investment, investor makes contacts with the concrete object. Below the investors influence the features of the investment object changes and then these changed features in the face of investment income influences upon the investor, changes its features, including – filling the resource deficit. After finishing the investment process, the subject and object start new existence; consequently, the investment process gives rise to the diffusion of the object and subjects’ features.

The dynamic of the social development is defined by the development of break spheres of the activity. If the revolutionary sudden changes of this or that sphere of the activity gives stimulus to the unseen before growth, this gives rise to the natural chain reaction of the development of connected to these spheres. If the evolution development of the spheres of activities takes place, its dynamics, as a rule, is defined by the least developed abilities. When the investments and investment income have different subject consistence, that is if they belong to the different spheres of activities, the various investment processes make these spheres inter penetrative. According to this, the logical ruled changing of their development dynamics take place. This provokes the natural chain reaction of the development of the interconnected spheres. Consequently, the investment processes give opportunity of making and keeping natural chain reaction of the interconnected spheres of the activities. These processes appear to be the fastening factor for the social development.

Showing the connections between the basic categories of the investment process give the opportunity of establishing dependence of the investment number to the factors and conditions of the investment domain, that is the investment surrounding formed in the region.

The picture 1.4 may elucidate basic structural fundamentals of the investment surrounding and the connections between them, which are shown in journalism.

                   

The interconnection of consisting comp

onents of the investment process. Such an deal with reflects the most essential sides of the investment process, but doesn’t give us opportunity of taking in mind the influence of the current processes upon the investment surrounding and on the divergent – of the investment surrounding upon the investment process. That’s why we reckon vital to discuss differently the interconnection of the consisting components of the investment process.

The investment attractiveness is a positive category in its context, and the investment risks participating in the process of forming this attractiveness – a negative one. That’s why it is vital to turn the quantitative showings of the risks into the quantitative showings of the concept, which is essentially opposite to the concept of “the investment risk” during taking in mind the noncommercial investment risks, as a complex factor of the investment attractiveness. We must call such a concept (the antonym to the concept of the investment risk) “social-economical and economical security of the investors” or, in other words, investment security (consequently, on the macro-economical, regional, field and industrial level). The mentioned changing gives an opportunity of avoiding inter divergent influence upon the resulting showing – the investment attractiveness of two complex factors – the investment potential and noncommercial risks.

Exactly same way, each private factor of these generalized concepts have at the same positive quantitative [removed]with the help of the positive showing – for defining the final level of the field’s investment security), and also negative one (with the help of conceptually “negative” showing – for defining the final level of the noncommercial investment risks of the field).

The investment attractiveness of the social-economical system (SES) is defined the position of the investment potential and the level of the investment risk. The investment assets existed in the region – the real development of the investment business in the SES – is characterized with the intensity of the investments. It its turn, it is defined by the past, current and future investment assets. The past investment asset characterizes the intensity of the investments invested before and gives an opportunity of defining their future profitability, the quantity of the presumable competitor and the most profitable sphere for the capital-investment. The current asset of the investment defines the level of the system’s economical development and gives the opportunity for predicting the volumes of the additional investments and their possible profitability, also to define the position occupied by the investor in the market in the future. Future (probable) investment asset is the oriental for plotting whole investment process: from the definition of future number of the investments till ruling the investment surrounding of the SES – for being paid the needed income flow of the capital. Analyzing of these three consisting components of the investment business gives the investor information about the level of competition ability at the SES investment market, also the tendencies of its development and the activities for reducing market.

The wholeness of the investment attractiveness and investment business makes the investment surrounding for the country, region, field, corporation (existed in the manufacture). Though it is vital also to reflect reverse connection, that is the influence of the investment surrounding upon the investment business. For example, the current position of the investment surrounding defines the investor’s thoughts and his/her activities towards future investments. Improving investment surrounding in the current period gives the stimulus to the development of the competition held between the investors for being paid the civil rights for investment. Also it gives the stimulus to the competition held at the commodity and service market, which helps the lowing of the prices and raising the quality of the manufacture. Parallel to these, the inflow of the investment resources takes place, which gives an opportunity for rational and effective distribution of the existed resources to the ruling organs of the regional development. It reduces the disproportion in the regional development, improves the living social conditions in the region, helps the development of the infrastructure and communications, changes the situation in the investment surrounding according to the demands of development of the regional economy.

The interconnection and subordination between the participating categories of the investment process is represented by the scheme shown in the pic. 1.5.

Taking in mind the peculiarities of the investment process, it mustn’t only be based on the usage of administrative-regulating activities, but also the usage of those economical models, which prove the essential of this or that activity.

 

1.6. Subject – matter of investment process and its main stages

According to the said above, the investment process is the successiveness of the stages, motions and operations of the investment business provision. The concrete flow of this process depends on the investment object. Consequently, the division of the investment process into the stages is provoked by the kinds of the investments. We speak, of course about the real and financial investments.

The investment process consists of two main stages; they are (1) making pronouncement about the investments and (2) Consciousness and exploitation of the investments. It is adopted to divide the first stage into several break phases (below types), which characterize the real and also financial investments. The quantity of these phases may be different, but three of them are the most typical: a) underlining the goals of the investments; b) definition of the investment direction and c) selecting the concrete object of the investments.

Goals and directions of the investment. In the process of being paid pronouncement about the investments different goals are defined and reflected. The ascending goals are the formal ones, which are in the future used as the criteria of selecting investments.  The formal goals come from the strategical firmness of the investment.

Working out the strategical direction of the investment business is connected with the defining equality of this or that form of the investments on the concrete stage of the perspective period and also with the definition of the direction of investment business including its arm consisting part. The priority selection of the investment forms at this or that stage by the investor is provoked by a number of inside and outer factors.

The functional direction is the most vital from the inside factors, those are the basic kinds of the investor’s (manufacture, organization) activities. For example, basic direction of the investment businesses for the institutional investors is investments into the securities. The manufactures of the real sector of the economy, which go the industrial activities, give priority, as a rule, to the investments into the material and nonmaterial assets.

The financial investment is realized mostly in the form of the manufactures’ (as concurrent, so partner ones) participation in ruling purchasing shared securities, or in the form of temporal residency of free money sources for speculative goals.

From other inside factors vital role in selecting the investment direction is played by the strategical direction of the operational activity, size of the manufacture (organization), the stage of the investor’s vital cycle and others.

From the manufactures and organizations of the real sector of economy the growth of financial investments characterizes, as a rule, large-scale industries, which have more opportunity of finding the sources of placing funds into the investments, and those manufactures, which are at the stage of the so-called “ripeness”. More extended form of investments at the earlier stages is the investments in the material and nonmaterial assets.

Among those outer factors, which make an essential influence upon selecting the investment forms the most vital are the rate of inflation and the percent rate formed at the financial market.

The formal goals may be the aspiration for increasing profit, widening the scales of the manufacture (activity), obtaining power and prestige in the the upper classes; also, solving the social-ecological problems, keeping and increasing the working places and so on.

These goals are not often defined distinctly, are not coordinated according to the priorities or are not verified at the subject of the ability of their consciousness. That’s why, it’s necessary to top out the real goal of the investments from the formal goals by establishing concrete purposed showings. For example, the formal goal – increasing profit – must be concretized in a number of showings, for which the definition of the achievement quality will be possible. Concretely, it may be the middle quantity of the profit for several years or the showing of net profit, or those other showings, which characterize the earned profit from the investment.

Formal goals of the investments make the pronouncement of defining problems about investment directions simpler. Mutual connected, independent and alternative (inter excluding) investments may also be among them.

Main stages of the investment process. According to the formation of investment portfolio, the investment process becomes importantly simpler at the expense of reducing its stages. In the foreign journalism dedicated to this problem, they differ subsequent stages of the investment process:

1.  Selection of the investment policy;

2.  analyzes of the investment market;

3.  re-inspecting the portfolio of the securities;

4.  estimating the investment effectiveness.

At the first stage they define the investment goals and the number of the necessary sources for its consciousness, also the quality of risk and profitability for each financial instrument. Selecting those financial assets of the potential kind, which may be included into the portfolio, fulfills this stage.

At the second stage, they concretize the rate of value of the securities’ break kinds on the foundation of marketing conjuncture formed at the concrete moment and provide the prediction of the share rates’ dynamic of the concrete firm. Such kind of deal with is called technical analyze. Basing on the got data they conduct fundamental analyzes. Its essence is analyzing the brought value of all those cash money flows, which is probable to get by the owner of the financial asset.

Third stage of the investment includes selecting concrete assets for the investors, also defining the optimal proportions between the assets in the bounds of investment capital. The bases of it are selection, selection during the operations and the diversification of risk according to total profile.

The fourth stage concerns the periodical estimation of the current portfolio according to the changing the investor’s goals and its deviation from the optimal portfolio. After this selling of the part of bought securities and buying new ones become possible.

At the last stage they provide periodical estimation of the factual profitability and the level of risk and their comparing with the existed standards.

Main participants of the investment process and their functions. To the circle of main participants of the investments belong: disorder, regional and local organs of the government, manufactures and corporal persons: they can participate in the process of investments from the side of demand and delivering.

In the conditions of the market economy the circle of the participants of investment process is importantly widened. The web of commercial banks, credit-commercial organizations, investment funds of companies and insuring companies have appeared, which make independently the investment decisions. But still, the disorder and governmental regional and local organs define their participation in the process of investments. It is represented by holding investment competitions, by selection and proving the investment projects, by licensing and quoting the manufacture, and also by defining the quantity of the percent  rate and taxation. The financial activities of the disorder, the organs of regional and local government as from the demanding, so the delivering side, influences essentially upon the behavior of the financial institutes and market.

Main distributor of money at the financial market is the populace, because it gives much more to the investment process, then takes. Of course, it will not be said about the organs and manufactures of the executing government.

The researches of the foreign scientists U. Sharp, G. Alexander and G. Bailey show, that wholly the disorder and manufactures are net consumers of the money sources, that is that they use more sources then give. More concretely, many large-scale companies for realizing their long termed aims need enormous quantities of money for construction factories, buying furniture, working out new products and so on. Besides, by consciousness active and hard strategies of ruling cash cash masses, they appear to be main purchasers of securities. Such a situation is made on the side of the disorder, regional and local governmental organs, the activities of which is connected with the capital investments and guaranteeing current expenses.

The organs of executive government fill the insufficiency of the money sources by producing debt commitments and obligations, and companies by producing shares and other securities.

 

The factors defining the consistence of investment project participants and fulfilled functions. The consistence of the investment project participants and fulfilled functions provided by them, are defined by the subsequent factors:

-    the specifics of investment project, its number, technological hardness and so on;

-    compatibility of functions by the participants of the investment project during the consciousness of the project;

-    financial status of the customer, who increases or reduces the influxing the financial structures in the consciousness of the investment project;

-    as long as the customer with the best material resources, construction materials, techniques, furniture and so on;

-    selection of the type of ruling the investment project (traditional or progressive).

 

Basic participants of the investment project. In the ruling the investment projects with the traditional type they differ its subsequent basic participants: sponsors, constructor, distributor of the furniture, the consultant of insurers, legal adviser, the consultants of the taxation and financial arm, creditors and others.

Let’s discuss them in more fine points.

In a wide understanding, a sponsor is a guarantor; a corporal or juridical person, who finances an economical project or a registration of social activities. Also, an orderer, an organizer of a large-scale project or arranger sponsor may be as commercial, so noncommercial structure.

As to the sponsor, as the participant of an investment process, we may call it an orderer, organizer, who connects then activities of each participant of a project, arranges discussions, analyses commercial suggestions of the constructors of financial structures or distributors, realizes marketing researches and selection of the financial partners. In the break occasions, it becomes responsible for fulfilling such functions of the constructing engineering, as engineer-consulting service, projecting-construction and questioning-calculating works, preparing a technical-economical substantiation, organization and ruling of the manufacture, working out recommendations in the sphere of manufacture consciousness. These reduce the quantity of the investment process participants.

Project-construction and construction organizations or individuals act the role of a constructor, that is the provider of the work. The constructor can involve other persons in the process of fulfilling the order, who become the sub-renters, and the constructor him/herself becomes the general renter. He appears to be the main fulfiller of the constructive lease agreement and is responsible the before the orderer for the fulfillment total complex of activities established in the agreement.

Distributor of the furniture represents the filial, foster companies or those other firms, which have signed at distributing furniture and as long as services. If the manufacture registers an agreement with an orderer for a complex distribution of materials, construction techniques and furniture to many of firms, it becomes the general distributor and answers for the whole distribution.

The insuring consultant is invited for showing the insuring risk and estimating the quality of the project’s safety, also, for working out the appropriate recommendations. The juris-consult provides the provision of the juridical documentation nearly the project, discusses wholly agreements and contracts.

The consultant of the arm of taxation questions analyzes the taxation situation existed in the country for realizing the project and also the taxation obligations of each participant, makes recommendations for minimization the taxes.

Financial consultant provides the selection of financial, credit and estimate conditions by amalgamation of the alternative variant for the consciousness of the project. In the case of influxing foreign investors into the project, he must bring it to the appropriation with the existed global standards. This will make simpler the status of the potential investors and creditors.

Creditors, as the participants of the investment process, lend money in different terms and conditions. Below these conditions, the creditor has a right of demanding from the debtor to return credit or fulfill other obligations. A disorder, bank, manufacture or a corporal person, investment funds and others may be the creditors.

A traditional form of ruling the investment project, in the time of which the orderer carries out him/herself the functions of ruling, has several defects. First is that the most part of the orderers is not competent enough in each question connected with the project. It makes the level of the risk stronger during being paid the ruling pronouncement that gives rise to a number of expenses. Second one is that, the thriving ruling, according to the experiences, requirements the leader’s systematic participation in the investment process, because the orderer is not always able to do it. And third, this form of ruling the project is characterized by the comparative dispersion of phases and stages as in the time, so in organizing. All these gives rise to the additional problems in the provision of the s’ agreement of its each participant.

Overcoming the mentioned imperfection happens at the moment of moving to the progressive form of the investment project ruling. Its essence is that the leader (manager) of the project becomes the basic figure in the organization and ruling the investment businesses. This may be a construction or construction-projecting organizations’ especially set high-qualified specialist or an experienced leader. He/she provides a general ruling of the project including finances, personnel and the construction works.

 

1.7. Plotting and selection of objects of investment process

 

The definition of re process of investment plotting.  The final phase of the first stage of the investment process is the selection of concrete objects of the investment, which is fulfilled in the process of plotting investments.

They, as a rule, call the process of investment plotting the process of forming such a portfolio (investment program) of the projects, which may be discussed as one of the alternative and mostly desired variant for achieving the investment object. Mostly using the mathematical models, which have no ability at all of reflecting each factor of the investment business, provides the plotting of investment. That’s why the results of modeling don’t provide making such straight decisions, which would be the guarantee for the achieving the set object. The manufacture’s operative management basing on the results of plotting and taking in mind other non-formalized factors provides being paid the final decisions about those concrete objects of the investment, which must be included into the investment program of the manufacture.

The investment model is called such a mathematical model, with the help of which it is possible to estimate the effectiveness and resulting of the investments, as towards the set objects, so towards the sources for reaching it.

We must take into account the fact, that the real investments together with achieving the set objects conclude quantitative changes as in the material-technical, so in the financial spheres. As to the financial investments, they are separated and touch mostly upon the financial side of the manufacture’s activities.

The investment business also may be isolated (separated) and interconnected. In the first case, in the process of investment business they discuss only alternative variant. Mutual connected investment plotting also takes in mind the alternatives of being paid decisions in the spheres of financing and organization. So the subject of isolated plotting is working out the investment program. In the second case, the aim of the plotting is industrial sphere wholly.

Any plotting means distinctive period, during which the fulfillment and consciousness (exploitation) took place. This period is always reduced. It must be mentioned that the subject of investment plotting terms is always conflicting. Basic question of the discussion is the ability of correcting the decisions below the influence of the phenomenon happened after finishing the plotting section. Though this is a just demand the definition of the future investment decisions’ influence is possible only after these investments are realized.

Periods of the investment plotting. In the process of investment plotting, they divide the terms of plotting into the intervals, which are called periods. The realizing decisions of one period are belonged to the beginning of end of the appropriate period. It’s vital that this is not reflected at the conceptual side of the investment decisions and influences only the numbering of the period. Got results from the consciousness of the investments are expressed by the taxes, which are divided into manner of speaking (for example, paying off the other industrial subjects by the investor) and incomes (for example, paid fee to the investor by other industrial subject).

The total sum of the payment during the concrete period equals to the sum of the realized manner of speaking and incomes. If their balance is positive – that is the income overcomes the manner of speaking or on the divergent.

The quantity of those periods during which the income-manner of speaking of the sums takes place, is called either the term of the investment exploitation (in the case of the real investments), or the term of action (in the case of financial investments). This part of time is either defined beforehand, or discussed as alternating quantity (at the time of being paid investment decisions). The freed invested sources are called often disinvestments.

In the system of investment plotting, the goal of the capital investment in this or that period of time may be the growth of material goods, increasing the income flow, making the investment profitableness higher and other showings, which characterize the ability of being paid prolonged profit.

In the investment models of the plotting, the number of capital investment may change in the certain period of time, for which the plot is working out. During being paid decisions, the priority is given to those projects, which guarantee the incomes from the consciousness of the investment in shorter time. Amalgamation of the payments flow in this or that period of time is realized by the discount method.

Isolated plotting of the investments. The isolated plotting of investments is realized during the given budget toward the break investment objects or the break investment programs. The term of the investment (investment projects) exploitation may be discussed as a alternating or flat parameters. The market of capital may be improved and also not improved. The separation of these markets is carried out by usage of distinctions between the percent rates of deposits and credits. Number of limitations of the financial resources in the isolated plotting system may be belonged to any period of plotting.

 

 

1.9. Interconnected plotting of investments

Interconnected investment plotting. The interconnected investment plotting is realized in tight relations with plotting the industry-financial activities. This relation is based on the complex formation of the cash flow taking in mind the fact, that like each activity the consciousness of each investment project needs the financial provision. This means that in the process of consciousness of the investment program, it is vital to balance its financial parameters with the industrial and financial parameters of the manufacture, also, taking in mind the possible reductions. We mean, firstly the potential of own investment resources, the possibility of influxing loan capital, essential of arm and regional diversification of the investment businesses, also, provision of effective balancing of inside balance, that is profitability, risk and liquidity of investment businesses.

The system of interconnection plotting means the existence of many criteria during the selection of investment projects. It is based on ranging the goals and aims of the investment businesses in the system of the goals of business leading, according to either time, or meaning.

The differentiation of the criteria of investment projects’ selection takes place, as a rule, in the section of concrete forms of independent, inter-exclusive (alternative), and interconnected investment projects. Ranging of the goals requirements the raging of criteria too. Usually, they use criteria of the net brought principles and inside percent rate (inside profitableness) mentioned above, as basic criteria.

During the interconnected investment plotting the system of reduction concerns basic and additional reductions. Basic reductions are the most vital criteria of the selection. For example, if established basic criteria of the selection of investment projects are the showing of the project’s net brought value, the basic reductions may represent concrete meanings of the subsequent showings: inside percent rate, the total risk level of the project, the terms of repurchasing the investment project and so on.

The additional reductions may be: the level of diversification of risk at the expense of regional and arm consistence; the value of the borrowed capital; the terms of consciousness of the investment projects; the size of the total number of investment resources; the number of the manufacture and consciousness of the product and so on.

The consciousness of real projects. The concept of the second and third phases is essentially different from the real and financial investments, and it is stipulated by the peculiarity of their consciousness.

In the modern conditions the real investment is the foundation of investment businesses of the most manufactures. The consciousness of the real investment is characterized with a number of peculiarities; we can break subsequent ones:

1.  the real investments are straightly connected with the basic activity of the manufacture, the widening of the pool of the manufacture and improving its quality with the help of involving the achievements of the methodical-technical progress. In other words, investment business and real investment processes are connected and condition each-other;

2.  the real investments, relatively to the financial investments, are followed by larger economical risks, which, in its turn, means the ability of as long as higher profitableness relatively with the financial investments. Economical risks are connected with the peculiarity of the technological processes, factors of the material wearing out and so on;

3.  Real investments are less liquid relatively with the financial ones. The reason for this is a tight purpose of most of the investments in the real industry and very often absence of the abilities of alternative industrial usage. That’s why it is extremely hard to compensate mistakes made during being paid decisions about real investments.

The forms of consciousness real investments. Real investments are realized differently by the investments in the in the basic capital, capital investments in the income assets and investment in nonmaterial assets. The consciousness of the capital-investment, in its turn, happens in several forms and, firstly, it is construction of new manufactures, reconstruction of the existed ones, modernization, technical re-equipment, and also, purchasing total prosperity complexes.

Purchasing total prosperity complexes is the prerogative of the largest companies with such a policy, which is directed towards increasing its influence at different markets. Real investments of this kind guarantee growth of the total value of the manufacture’s assets, which is conditioned by the growth of abilities of financial potential and joint usage of the system of materials, reducing the level of the manufacture expenses and so on.

New construction, usually, is connected with the investments in such modern manufactures, which increases the labour manufacture and satisfies the request of the ecological security, also, means the construction of new objects.

Reconstruction in the most suitcases requirements moving to the modern technologies of the industry taking in mind the achievements of methodical-technical progress. As a rule, it is connected with the involving of the resource economizing technologies, moving of the manufacture to the modern standards of the quality and so on. The reconstruction may touch upon the construction of new objects.

Modernization mostly is connected with bringing to conformity the active part of the basic funds to the modern requirements of consciousness the technological processes.

Technical re-equipment touches upon the changing and purchasing new furniture, mechanisms and basic complexes of the technical system for effective consciousness of the technological processes. It is not always possible to place a sharp boundary between technical re-equipment and modernization.

Investments in the income assets as a rule, serves for widening the income funds used by the manufacture. In the most suitcases it is realized subsequent the capital-investment consciousness and this essentially is the result of consciousness capital-investments.

Investments in nonmaterial assets generally mean innovational investments and realized in two basic forms:

Ready methodical – in the form of given patents of technical manufacture, methodical achievements, inventions, commodity marks and so on; With the help of independent machining of the methodical-technical manufacture.

Most part of the real investment forms and kinds – the income assets, excluding the innovations of break kind of the furniture, mechanisms and so on, – are realized in the face of real investments having appropriate business-plans.6 In the business-plans of the investment projects together with the traditional section the subjects of as long as the needed level of liquidity of the real investment objects and minimizing the level of investment risks must be worked out and shown.

Organization of the investment project consciousness. For preparing the organization and consciousness of each needed plot documents, as a rule the leader is appointed. The most vital plot documents are the calendar plans of the projects and their capital budgets.

The calendar plans are made for certain period of time – year, quarter, month or decade. The data of terms and number of the consciousness the break kinds of activities foreseen by the investment project are represented in them. The terms and character of the activities define the quality of detailing the calendar plans.

Fulfillment of the calendar plot is straightly connected with financing the activities of the investment project. For this purpose, the financial plot is worked out, which, usually is called “the capital budget of the investment project”.  The volumes, terms and sources of the financing any kind of activities considered by the project in the section of break phase of the calendar plot are substantiated and established in it.

Capital budget consists of two sections: capital expenses of the projects and influxing the needed sources for its consciousness. The capital expenses are the specified estimation of initial number of the investment expenses taking into account the reserve of those financial sources, which are needed for recovering unexpected expenses according to the calendar plot.

The section of the “source influx” of the capital budget is the specification of number of the investment needed resources for the project consciousness in the section of own sources of the investor, influxed sharing capital, leasing, banking credits and so on.

The synchrony of the income of the sources and the number of investment expenses must be provided in the capital budget for realizing the works foreseen in the calendar plot.

Briefly about the investment risks. An vital element of the project’s calendar plans and systems of sustaining capital budget taking into account the factors of the investment risk and working out the activities for their neutralization. The investment risk, as a rule, is discussed in the prism of possibility for being paid unprofitable financial result. The forms of its showing may be loosing the plotted investment income or shortage for absentmindedness in the consciousness of investment projects. The investment project risk is a complex concept and units those various kind of risks, which are connected with the consciousness of investment projects.

Each stage of the consciousness of investments is characterized point kinds of risks. That’s why estimation of whole risk of the project is provided on the foundation of aggregated proof according to the break stages.

The consciousness of any investment project is in its essence a unique phenomenon for even one-typed projects. This circumstance makes the individual deal with necessary, taking into account the point information, which is connected with objective and subjective factors of in the works risks during the consciousness of the investment processes. The long is term of the project consciousness; the larger is the absentmindedness of final results of its consciousness and, consequently – level of the risk.

We mist take into account the plotted size of the cash incomes to get from the investment project depends on future status of appropriate segment of commodity market and effectiveness of commercial activity of the manufacture. It means that the investment risks are greatly conditioned by the commercial risks of a manufacture. In other words, there is a straight connection between the length of the vital cycle of the project and level of the investment-projecting risk. The completeness and trustworthy of the gathered information about each stage of the project’s consciousness, the level of qualification of the investing management defines greatly the substantiation of taking into account the various factors of the different types of risks.

The kinds of investment risks.Let’s name the basic kinds of the risks of investment projecting taking into account the point conditions in Georgia.

The risk of inability of paying is in vital connection with fulfillment of disorder obligations of the partners in the business, also, lowering the level of liquidity of the income sources.

The risk of financial provision of the project is connected with the late influx of the investment resources from the break sources, the chance of incomplete financing because of increasing the value of the capital, which is needed for the consciousness of the project. It is in a straight correlation with the risks of inability of paying and inflation.

The risk of financial infirmity of the manufacture. It is characterized by the flow of invested own and borrowed capital and the incomes conditioned by the investment project and unbalancing of the flow of payments. This risk, together with the risk of the inability of paying is one of the most provoking reasons for bankruptcy of the manufacture.

The risk of inflation is connected with the possibility of devaluation of the probable incomes from the investment project and raising the value of capital expenses expressed by the nominal price. In the modern conditions the risk of inflation has permanent character and touches upon most parts of the operations of the project’s consciousness. Solving the problem of its taking into account and softening neutralizes this permanency.

The percent risk is related with the risk of inflation. It has own point in Georgia, which is conditioned by the peculiarity of formation of the financial market and its being not developed.

The marketing risk is the risk of being paid incomplete income from the investments on the stage of the project’s consciousness conditioned by the active circumstances at the expense of the number and exploitation of the consciousness. The long are the terms of the project’s consciousness, the higher is the possibility of this kind of risk.

The criminal risk is conditioned, at the first place, by the absence of the appropriate defense of the civil rights of the investor’s privacy that appears in the fiscal of our country the most often.

For neutralization of the possible negative results of the investment projecting risks various events and arrangement are worked out, which are grouped into the inside and outer events. Inside events of the neutralization of the risks concern the foundation of the various insurance and financial funds (capital) and working out such events, which will suppress possibility of raising this or that risk. This may be refusing using the low-liquidated assets and the borrowed capital of the vital number, also the mechanism of transferring the risks subsequent the break operations to the partners.

Foundation of the insurance and financial funds means the reservation of one part of the investment resources for being paid over those unexpected negative results, which are not related with the actions of personnel and contractors of the manufacture. Of course, wasting of the part of the own sources of a manufacture, or, more concretely, “freezing”, makes vital being paid the loan at the market of finances for filling it, that makes the dependence on the outer sources of financing the investment projects stronger.

The outer methods of the neutralizing the projecting risks, in the first place, is insuring the project risks of break kinds and guaranteeing by the third person. The object of the insuring is the material goods of the manufacture, which is used in the process of investment process; the responsibility of the manufacture and its personnel towards the third persons; insurance of the participants of the investment project’s consciousness. The mechanism of guaranteeing is oriented firstly towards the safeguard of the investors’ civil rights in case of changing the investor’s conditions.

The peculiarities of consciousness the financial investment. For the manufactures, which are not institutional investors, the basic direction of the investment business is the consciousness of the real investments. Herewith, when the conjuncture of the financial market gives the ability of being paid significantly higher level of profitability at the invested capital, then the operation activity at the commodity market (the formed situation at the market of securities in Russia in 1995-1996 is a excellent example of this). Also, in case of existence of temporary free financial resources, the manufactures actively invest sources into the high liquidate financial instruments. Except this, the manufactures invest own capital other manufactures’ regulation funds for diversification and ruling other companies and organizations.

From the economical top of view, the financial investments are such instruments, with the help of with the solving the strategical and operative problems of effective residency of the capital in the country and abroad. The financial investments are mostly realized in the manufactures in the time of having free money sources. They appear in the face of outer investments (except the occasions, when the manufactures expiate their own securities, for example shares).

The most part of the manufactures realize the financial investments for the purpose of being paid additional investment income (speculative income) from the usage of the free money sources. The concrete choice of the concrete instruments of the financial investments is wide enough even in the conditions of already formed market.

The level of profitability received from producing the investments into this or that instrument is in the straight relation with the level of risk. Higher is profitability, the higher is the risk of financial set-back.

The portfolio of the financial instruments. In the purpose of being paid the desired level of profitability of the financial investments and the diversification of risks, the enterprises (investors) buy financial instruments with different levels of profitability and risk, that is, in other words, they make the portfolio of financial instruments of point character.

For the changing character of the conjuncture of the financial market, the process of being paid desired level of the profitableness requirements permanent monitoring of the various instruments’ profitability, risk and liquidity and also making the appropriate ruling decisions related with changing the portfolio of finances; it means the reducing or increasing the share of this or that financial instruments. Such kind of correcting is called “the restructuring of the portfolio”. It is the basic concept of the financial instruments’ operative ruling in the manufactures.

Basic financial instruments of the speculative portfolio of the finances the shared and debt securities, also, deposits and the currency valuables. During the monitoring process, depending on the type of the financial instruments, they take into account and analyze a lot of factors, which influence upon the levels of their profitability, liquidity and risk. From the factors which negatively influence upon the profitability of the shared financial instruments, the most vital are:

· growing the level of taxation of the emitenti manufactures’ investment profit;

· the conjuncture changing of the number of emitenti companies’ selling (it especially touches upon the oil companies);

· reducing the level of dividends for reducing the number of the profit;

· reducing the price of net assets of the emitenti manufactures;

· speculative games of the participants of have a supply of market.

The growth of the percent middle rate at the market; increasing the level of inflation; increasing the level of taxation of emitenti manufacture’s investment profit; degradation of the level of financial firmness of the manufacture; degradation of the pay ability of emitenti manufacture belong to the factors, which reduce the level of liquidity of the debt securities. The level of registration rate of the central bank; the firmness of the national currency; financial stability of the institutions of the deposit kind; changing of the percent middle rate at the financial market make and essential influence upon the profitability, risk and liquidity of the cash instruments.

According to the results of the investment market monitoring, they show the break instruments of the speculative investments and also the tendency of the levels of profitability, risk and liquidity of the whole portfolio. Based on the received information, they make decisions about the essential of the portfolio restructuring and its direction.

The investment resources during consciousness of the financial and real investments are used as in the cash, so in the natural form. The formation of the investment resources of the manufactures is connected as with the manufacture itself, so with the processes of gathering and keeping, which take place in the whole country. The rates and scales of the keeping and gathering the investment capital are conditioned by the level of the country development and also the level of the populace’s profitability.

The process of formatting the investment resources in the manufacture is permanently working in the face of the incomes received from the basic activities and the activities not for consciousness, also by taking loans and others. The concrete quantity of those sources, which are used either for the investments, or the consuming needs, are defined by the finance-industrial plot of the manufacture. it depends greatly upon the principles of their influx, the growth of the manufacture’s capital and its structure. If a large part belongs to the sources in the structure, then the abilities of loaning are reduced. At the same time, the value of additional resources influx increases because of increasing the credit risk.

In the system of effective plotting of usage and analyses of the financial resources it is very vital to top out those various groups of the investments, which differ in specifics and request the usage of the adequate methods of ruling. They differ several characteristical features, with the help of which the classification of the investment resources takes place. 

 

Read the papers today, and you’ll feel like start-ups are a rare breed in 2009. Many sources say less public are starting up companies, albeit successfully too – citing the lack of investors available as one of the top reasons. But perhaps they are not looking in the right places.

A document in Philadelphia (Philadelphia Inquirer & Daily News) recently did a tale in which a start-up CEO nearly seemed to feel like securing angel investment was simpler in this market than before. And it makes significance, since less competition combined with more places to look for funding make this a excellent time for companies to secure investment.

It is right that angel investors are becoming more cautious, and one will need a strong, convincing business plot (or some already existing activity) in order to secure such funding, but this has always been the case. But, sites such as the Mid-Atlantic Investment Network help potential entrepreneurs and existing start-ups alike find more channels in which to reach these investors.

Many companies will look to raise “Seed Capital” from a wide variety of courses, including friends and family. But the Mid-Atlantic Investment Network allows members to look further than that, with the ability to broadcast your plans to other potential investors online.

While technology remains one of the top niches in angel investment (such as the contemporary development by an entrepreneur in Maryland to develop software that uses facial recognition technology to determine who can see the content on-screen), other fields are also attracting entrepreneurs and angel investors these days. Our network has active investors and entrepreneurs in fields such as Real Estate, Retail, Business Services, Transportation, Health Care, Entertainment, Agriculture and more.

A wide range of investors are members, including various angel investors from within Mid-Atlantic regions such as Delaware, Maryland (including Baltimore), Pennsylvania (Philadelphia, Pittsburgh, etc), Virginia, West Virginia and Washington D.C, but also features investors located crosswise the country and internationally.

Join the Mid-Atlantic arm of the Angel Investment Network today and find someone to help get your business off of the impose a curfew.

During the current fiscal climate, there are factors that entrepreneurs look at more meticulously when it comes to starting up a business.  The “where” and “how much” factors become a larger part of the pronouncement, as one looks to trim any unnecessary cost factors.  Gone are the days where if you were technology based, you’d set up in Silicon Valley or if you needed to network with business contacts – set up shop in New York.  Ironically, thanks to modern day technology, you can set up in a much wider range of locations.

Entrepreneurs look at factors like the ease of recruitment, and as a result – have looked into the central states of the US, such as Colorado, where the workforce is well educated, quality of life is excellent, and cost of living is a huge step lower than on the coasts.  

With hopes up about stabilisation of the economy, this is a fantastic opportunity for aspiring entrepreneurs and small business start ups alike to take things to the next level.  Over the last few years, several angel groups and individual investors have started to set up shop in cities like St. Louis (such as the Arch Angel Investor Network), again bucking the general trends.  

On the Central Investment Network – entrepreneurs in the Central states of the US get another chance to connect with angel investors.  Members can get their business thoughts and plans out to hundreds of local investors – and since Central Investment Network is part of the Angel Investment Network, members can connect with thousands of other investors from nearly the world.  In fact the network grows continuously, with branches in over 40 countries and investments in the works both on a local and global basis.

Of course, the plans have to be well thought out and organised, as while entrepreneurs may have less competition, the investors are also more choosy.  Still, there are signs that more thriving angel investment strategies such as venture capital investments are in the works within the central states.  While some venture capital backed companies have gone bankrupt this year in the U.S, nearly all of them are California based, and none of them are in the states that the Central Investment Network covers – which includes Colorado, Kansas, Missouri, Montana, Utah & Wyoming.

Find out more, by visiting http://www.centralinvestmentnetwork.com

a re-establish of my previous “how to make money investing” video – I was tiresome to be “edgy” in the other one but it came out as too obnoxious.

Find More Investing Articles

During the current fiscal climate, there are factors that entrepreneurs look at more meticulously when it comes to starting up a business. The “where” and “how much” factors become a larger part of the pronouncement, as one looks to trim any unnecessary cost factors. Gone are the days where if you were technology based, you’d set up in Silicon Valley or if you needed to network with business contacts – set up shop in New York. Ironically, thanks to modern day technology, you can set up in a much wider range of locations.

Entrepreneurs look at factors like the ease of recruitment, and as a result – have looked into the central states of the US, such as Colorado, where the workforce is well educated, quality of life is excellent, and cost of living is a huge step lower than on the coasts.

With hopes up about stabilisation of the economy, this is a fantastic opportunity for aspiring entrepreneurs and small business start ups alike to take things to the next level. Over the last few years, several angel groups and individual investors have started to set up shop in cities like St. Louis (such as the Arch Angel Investor Network), again bucking the general trends.

On the Central Investment Network – entrepreneurs in the Central states of the US get another chance to connect with angel investors. Members can get their business thoughts and plans out to hundreds of local investors – and since Central Investment Network is part of the Angel Investment Network, members can connect with thousands of other investors from nearly the world. In fact the network grows continuously, with branches in over 40 countries and investments in the works both on a local and global basis.

Of course, the plans have to be well thought out and organised, as while entrepreneurs may have less competition, the investors are also more choosy. Still, there are signs that more thriving angel investment strategies such as venture capital investments are in the works within the central states. While some venture capital backed companies have gone bankrupt this year in the U.S, nearly all of them are California based, and none of them are in the states that the Central Investment Network covers – which includes Colorado, Kansas, Missouri, Montana, Utah & Wyoming.

Find out more, by visiting http://www.centralinvestmentnetwork.com

Find More Investing Articles