1. Read and learn the following words and word combinations. Translate the examples:

invest v – вкладати (гроші, капітал)

investor n – вкладник, інвестор

investment n – 1) капіталовкладення, розміщення капіталу, інвесту­вання (дія); 2) інвестиції; 3) капітальні витрати; direct foreign investment – прямі зарубіжні інвестиції; portfolio investment – портфе­льні інвестиції; crisscrossing investment – перехресні інвестиції; investment opportunities – інвестиційні можливості

e.g. Investment flows are cash flows associated with purchase and sale of both fixed assets and business interest.

bond n – 1) боргове зобов’язання, боргова розписка; 2) облігація

e.g. If a government or a corporation borrows money, they give bonds with fixed interest.

share n – 1) доля, частка, пай; 2) (BE) акція, syn. (AE) stock shareholder/shareowner/stockholder n – акціонер

share v – ділити, приймати участь (у чомусь)

e.g. Each share is represented by stock certificate which is negotiable.

stock n – 1) запас, резерв, фонд; 2) асортимент (товарів); 3) інвентар, майно; 4) капітал, (AE) акціонерний капітал; 5) (AE) акція/акції; 6) цінні пaпери, облігації; Stock Exchange – біржа цінних паперів, фон­дова біржа; stockbroker – біржовий брокер/маклер; stock certificate – акція

e.g. As a shareholder a person owns stock certificates that represent his share of ownership.

securities n – цінні папери; syn. bonds, stocks and shares; stocks and bonds; listed securities – цінні папери, що мають котировку на фондо­вій біржі

e.g. An investor becomes a partial owner of a business and receives securities.

equity n – 1) акціонерний капітал, частка в акціонерному капіталі підпри­ємства; 2) звичайна акція; equity participation – участь в акціонер­ному капіталі компанії

e.g. Equity participation means acquiring property rights in a company.

loan n – позика, кредит; syn. credit; long/long-dated/long-period/long-sighted/long-term loan – довгострокова позика; short/short-dated/short-sighted/short-term loan – короткострокова позика

e.g. Banks provide loans to businesses.

redeem v – 1) викуповувати; 2) погашати, виплачувати (борг); syn.to reimburse, to repay

redeemable adj – той, що підлягає викупу/погашенню (про цінні па­пери)

redemption n – 1) викуп, погашення (цінних паперів); 2) повер­нення, виплата (боргу); syn. reimbursement

e.g. Short-term credit bills must be redeemed within a year or less.

II. Read and translate the text:

Foreign Investments and the World Economy

Foreign investments by the companies of advanced economies in the economies of less developed countries have a long history. In the modern world there have been three waves of such investment.

In the period of the "old colonialism" of the 17-18 centuries Spanish, Dutch and English companies established mines and plantations in the New World and in parts of Asia. These activities mainly aimed at exploiting the native people for their mineral and other natural resources. During the second wave of the "new imperialism" in the late 19th century, Africa, Southeast Asia and other lands were brought within the several imperial systems. Although exploi­tation continued, European investments in ports, railroads and urban centres at that time created an infrastructure that is still important to many less developed countries/LDCs/.

The third wave began in the 1960s when the less developed countries chose the economic strategy of industrialization and started many import-substitution projects. Through tax policies, erection of trade barriers and other policies the less developed countries encouraged companies of the advanced economies to establish manufacturing subsidiaries within their borders. Corporations set up branch plants to produce components and intermediate goods.

Foreign investment flow into less developed countries benefited local eco­nomies. It resulted in transforming a number of countries such as Mexico, Taiwan and South Korea into the Newly Industrialising Countries (NICs), serving as a model of economic development.

Traditionally when dealing with international flows of capital economists distinguish between private and government investments, long-term and short-term investments, direct and portfolio investments in the following way.

A. Private investments /or acquisition of property rights/ 1. Long-term investments(bonds, shares, patents, copyrights) a) direct investments b) portfolio investments. 2. Short-term investments (to be redeemed within a year or less).

B. Government investments/or acquisition of property rights/. Mainly portfolio investments and short-or long-term loans.

As can be seen from the table the opposition "long-term vs. short-term" is based on the term of redemption, the opposition "private vs. government" stresses the type of investor while the opposition "portfolio vs. direct" focuses on the nature of the investment itself.

III. Answer the following questions:

1. Where do the companies of advanced economies traditionally invest?

2. How many waves of foreign investment have been in modern history?

3. What was the main aim of investing in the period of the old colonialism?

4. How did the less developed countries benefit from the investments in the era of the “new imperialism”?

5. What caused the third wave of foreign investment?

6. How did the governments in the LDCs encourage foreign companies to set manufacturing facilities within their borders?

7. Into what type of economies have some of the LDCs transformed?

8. How are foreign investments traditionally treated?

IV. Give Ukrainian equivalents of the following:

aimed at exploiting; urban centres; intermediate goods; foreign investment flow; to distinguish between; mainly; the opposition “something versus something; term of redemption; the nature of the investment itself.

V. Give English equivalents of the following:

передові економіки; проекти щодо заміщення імпорту; виробничі фі­лії; слугуючи моделлю економічного розвитку; приватне інвестування; набувати права власності; наступним чином; підкреслювати (наголошу­вати на); зосереджуватись.

VI. Study the definition of different types of papers. Which of them have 1) a more specific meaning; 2) general meaning; 3) crisscrossing meanings?

bond	printed paper issued by a government or a corporation acknowledging that money has been lent to it and will be paid back with interest
equity	ordinary stocks and shares not bearing fixed interest
security	document, certificate, etc. showing ownership of property (especially bonds, stocks, and shares)
share	one of the equal parts into which the capital of a company is divided with which the holder can have a part of the profit
stock	money lent to a government in return for interest; shares in the capital of a business company

VII. Fill in the gaps with the words from the list below:

bonds, share, Stock, securities, stock certificates, equity

1. … are traded at the … Exchange.

2. When the owners of the business supply money for its expansion they receive …, or certificates of ordinary stock.

3. The value of the … depends on the success of the company.

4. … are negotiable, that is they can be bought and sold.

5. The interest on … has to be paid out whether business is profitable or not.

VIII. Match the synonyms. Use any 5 words in the sentences of your own:

substitution	branch
subsidiary	reverse
benefit	attainment
opposite	gain
acquisition	replacement

5. Match the words with opposite meaning. Use any 5 words in the sentences of your own:

   activity	cause
   advanced	agreement
   important	backward
   opposition	stagnation
   result	not worth speaking of

6. Adjectives can be formed by combining two words, for example long-term. These adjectives are hyphenated only when they come before a noun. Complete the phrases below using words from A and B. There is sometimes more than one correct answer and some words may be used more than once. What other adjectives of this type can you add? Translate the phrases.

   A	B
   environmentally	fashioned	environmentally-	friendly	packaging
   old	term			typewriter
   short	budget			opportunities
   low	known			advertising
   well	friendly			personality
   high	level			decision-making
   user	trained			software
   				staff

7. Fill in the gaps with the proper word combinations from ex. X. Mind their spelling:

1. Nobody wears such clothes now. They are ….

2. Churchill’s biography is very interesting. He was a ….

3. In your everyday work you can fully rely on your ….

4. The company failed to launch a new product line because of a ….

5. This software is rather easy to work with. It is ….

6. The Board of Directors is a … body.

5. Translate into English:

1. В період «старого колоніалізму» компанії розвинених країн в основ­ному зосереджувались на заснуванні шахт та плантацій.

2. Сучасна інфраструктура в багатьох країнах Азії та Африки була за­початкована в часи «нового імперіалізму».

3. Перетворення деяких слаборозвинених країн у нові індустріальні країни слугує зразком економічного розвитку.

4. Зарубіжні інвестиції є формою отримання прав на власність.

5. Протиставлення довгострокових позик короткостроковим базується на терміну виплати.

6. Випуск товарів, що заміщують імпорт, важливий для розвитку націо­нальної економіки.

5. Topics for discussion:

1. Characterise the three waves of foreign investment.

2. Dwell on the impact of foreign investments on the economy of the host countries.

3. The main types of present-day foreign investments.

5. Skills practice:

Many newspapers have a financial section which includes information about the share prices of listed companies. This information enables you to follow the progress of any shares that you own or may be thinking of buying. Read the explanation of the listing (next page) and answer the questions.

1. What was the closing price for each of the following shares?

a) Cadbury-Schweppes c) Black Arrow

b) Allied Zurich d) Care UK

2. For each of the five sectors, which shares had the greatest change in price ( increase or decrease) compared with the previous day's price?

3. Which of the following household goods companies is furthest from its highest price for the year?

a) Allied Text c) Reckitt & C

b) Cornwell Pkr d) Stoves

4. Which insurance company has

a) the highest yield?

b) the lowest yield?

5. What is the price/earnings ratio for each of the following shares?

a) International Energy Group c) Isotron

b) Cox Insurance d) Associated British Foods

Unit Eighteen

Foreign portfolio investments