International Finance Spain Essay

1066 words - 4 pages

International Finance - SpainIntroductionThis proposal is based on an opportunity we believe we have identified in the tourism industry and in particular in the food and drink sector, in which we see great financial potential. In this proposal, we will set out our initial findings and suggest a plan for the coming months regarding the research and work that the investment report will require.The tourism industry is in the Gran Canaria in the Canary Islands, Spain. In addition it's a member of the European Union and Monetary Union. The location is in the Atlantic Ocean off the northwest coast of Africa and at a distance of 1,050 kilometres from the mainland of Europe. The Canary Islands' total area is approximately 7 447 km2. In addition the total population is of 1 800 000 inhabitants with the majority based in Gran Canaria and Tenerife. Moreover the proposed company for investing is Nando´s, a South African franchise company which offers Portuguese cuisine, especially chicken.GovernmentThe Spanish government is a stable and operates in a democratic style; therefore there is a low political risk.The Canary Islands are part of the Spanish territory and the European Union. Moreover all European Union policies are fully applicable to the Canary Islands. Nevertheless, in recognition of the special needs arising from their geographical location (ultra-peripheral region), a number of highly favourable exceptions in the application of European Community Law have been set up.Spanish EconomyThe currency used is the Euro ( ). In addition the currency issues are under the control of the European Central Bank based in Frankfurt, Germany.During the past five years, the economy has grown between 3 percent and 4 percent each year. The boom has been marked by optimistic business confidence, fast job creation and rising consumer demand.Spain maintains few restrictions on foreign investment. The Transparency International's 2001 score for Spain was 7 and in 2003 it scored 6.9 demonstrating that the level of corruption is relatively stable . Therefore, Spain's black market score is 2 for that year.The Firm - Nando´sNando's will be able to spread its brand into a new market with this investment and offer its service to clients who are already familiar with its products and services as the Canary Islands receive a vast amount of people from different countries and cultures. In addition, as we expect Nando's to be successful in the south of Gran Canaria, we intend to reinvest our profits in other projects in its neighbourhood as this could be used as a natural hedging.The investment opportunityWe believe in the existence of this investment opportunity in the Island of Gran Canaria. The reasons for this approach are:* The situation of one the most important harbour of Spain and Europe.* The population of this island has a medium level of incomes, however the average expenditure in goods and services is high .* It is one of the...

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