Equities markets within Asia benefited mostly from a liquidity-driven rally, set against the backdrop of improved economic growth expectation, single-digit interest rates and benign inflation, to name a few. Numerous channels have been opened for prospective investment opportunities, part of which is mirrored through investors’ increasing zest for equities in line with everyone’s aim to maximize portfolio returns.
With the speed and readiness of information available through technological channels, response time has apparently been fast. While most are aware of challenges besetting the US economy related to credit default issues, several are likewise quick to underscore the reality that there are no quick overnight fixes to the issue, and alternative investing markets are readily available. This underscores the fact that capital flows work within a pre-defined framework, specifically in areas where risks and returns are transparently defined.
Yet, similar to any cycle however, investments can be there for the long haul, or otherwise. Some might be quick to jump boat in alternative markets where restrictions are less and growth opportunities are wider, especially where business decisions can be made with peace of mind and comfort. This separates what we often read as direct investments, and those funneled in volatile capital markets.
Within capital markets, several if not all enterprises, have upgraded to an era of “cooperation” than “competition,” to best reach intended markets via wider marketing channels. This can be summarized through a “win-win blend” in terms of competency, as most seek to avoid replicating the wheel as regards to procedures that have been tested through time. For example, hybrid and/or sophisticated investment instruments have mushroomed quite strongly, simplifying complexities for consumers who might opt paying a considerable “premium” vis-a-vis the benefits they get within a specified timeframe. Financial product offerings have also been diverse, and most head toward an “all-in-one” concept that would best fit future needs.
The essence of whether or not direct investments can be maintained, also highlights aspects tied to negotiation, especially in enabling involved agencies to meet identified objectives. More often than not, the underlying purpose prior to implementing projects, for example, is among what we refer to as “prospect-openers,” yet little consideration is given relative to identifying awarding criteria. Others encounter difficulty when they visualize concepts to contracting parties, especially when one has very little knowledge of detailed specifications.
People who pro-actively involve themselves in private e-Marketplaces strive hard to perfect negotiations by properly outlining procedures to determine “reasonable” pricing for goods and/or services being procured at the swiftest possible time. Since basic procedures are in place, e-Marketplaces ensure nothing has been skipped from pre-qualification to order tracking. This concept of perfection occurs when all agencies involved in the negotiation round, are “compensated equitably,” beginning with an identified objective on awarding: Would the lowest price matter? Are there other valid considerations aside from price (e.g., expertise, value-added contribution, financial maneuverability)? Have contingencies been outlined in case macro scenarios change within the fiscal and/or monetary setting? And so forth, and so on. The challenge actually rests on enumerating both tangibles and “intangibles,” and whether there are ways to quantify the latter. Simply put, suspicions or any allegations are best avoided when these are carefully factored in prior to a buy and/or sell move.
For centuries, the investing process has gone through constant re-shaping. The final analysis tells us that investment growth is fortified when basic principles deployed are directed at winning them.
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The author is the general manager of SourcePilipinas.com Inc. and 2TradeAsia.com. For queries, e-mail grace.cerdenia@2tradeasia.com or grace.cerdenia@sourcepilipinas.com.