| Noun | Verb | Person |
| drawer; drawee | ||
| guarantee | ||
| trade | ||
| cash | ||
| collection | ||
| ship | ||
| pay |
Part b) Complete these sentences using the words from the table above.
1. The exporter preferred that _____ for the goods had to be made in his countrys currency.
2. The _____ accepted the draft by writing the word "accepted" on the face of the draft, signing it and indicating the date.
3. Clearing institutions in the leading financial centers are actively involved in financing international _____.
4. It was not easy for the exporter to find a _____, which could deliver his goods to this country.
5. The importer managed to _____ money on his insurance only after presenting all the relevant documents.
6. The bank had to pay the _____ amount to the exporter when the buyer failed to meet his obligations.
7. The buyer could not receive shipping documents before making payment for the goods because the contract was made on _____ against documents terms.
8. The _____ insisted that the goods should be paid by a bill of exchange on sight draft terms.
UNIT VII
FOREIGN EXCHANGE
Warm up
Do you know denominations of the most
important currencies in circulation? Have
you ever changed rubles into any other currency?
Why is it important to follow the exchange rate of our currency?
Section A
Reading 1
Foreign Exchange Market
The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies.The main participants in this market are the larger international banks. Financial centers around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. FX determines the relative values of different currencies.
The currency market works through financial institutions, and it operates on several levels. Behind the scenes banks turn to a smaller number of financial firms known as dealers, who are actively involved in large quantities of foreign exchange trading. Behindthescenes market is sometimes called the interbank market, although a few insurance companies and other kinds of financial firms are involved. Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars.
Forex assists international trade and investments by enabling currency conversion. In a typical foreign exchange transaction, a party purchases some quantity of one currency by paying for some quantity of another currency. The modern foreign exchange market began forming during the 1970s after three decades of government restrictions on foreign exchange transactions, when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system1.
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FX is unique because of the following characteristics:
its huge trading volume;
its geographical dispersion;
its continuous operation: 24 hours a day except weekends, i.e. trading from 22:00 GMT2 on Sunday (Sydney) until 22:00 GMT Friday (New York);
the variety of factors that affect exchange rates;
low margins of relative profit compared with other markets of fixed income.
As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.
1 The Bretton Woods system of monetary management established the rules for commercial and financial relations among the worlds major industrial states after WWII.
2 GMT- Greenwich Mean Time-is the standard time in Great Britain which is used to calculate the time in the rest of the world (synonym: UTC-Universal Time Coordinated)
Discussion
Give answers to the questions. Use the following expressions to present your answers:
It is clear from that .
I can say that .
Speaking about .
I suppose / think / believe
Judging by I come to the conclusion that .
1. Why is forex called a decentralized market?
2. What is interbank market?
3. What is forex necessary for?
4. What characteristic features of FX do you consider the most important?
5. Is forex a monopolist?
Reading 2
Market Participants
Unlike a stock market, the foreign exchange market is divided into levels of access. At the top is the interbank market, which is made up of the largest commercial banks and securities dealers. Within the interbank market, spreads, which are the difference between the bid and ask prices, are razor sharp and not known to players outside the inner circle. The difference between the bid and ask prices widens as you go down the levels of access (for example from 0 to 1 pip1 or to 2 pips for currencies such as the euro). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up forex are determined by the size of the line (the amount of money with which they are trading). The top-tier interbank market accounts for about 40% of all transactions. It is followed by smaller banks, large multinational corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail market makers. Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s. Central banks also participate in Forex to align currencies to their economic needs.
Commercial companies. An important part of the foreign exchange market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those banks or speculators, and their trades often have short term impact on market rates.
Central banks. National central banks play an important role in FX markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Nevertheless, the effectiveness of central bank stabilizing speculation is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.
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Hedge funds. About 70% to 90% of the foreign exchange transactions conducted are speculative. This means the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. Since 1996, hedge funds have gained a reputation for aggressive currency speculation. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds favor.
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but rather currency exchange with payments (there is usually a physical delivery of currency to a bank account). These companies selling point is usually that they will offer better exchange rates or cheaper payments than the customers bank. These companies differ from Money Transfer / Remittance Companies in that they generally offer higher value services.
Money transfer / remittance companies perform high-volume low-value transfers generally by economic migrants back to their home country. The largest and best known provider is Western Union with 345,000 agents globally.
Currency transfer companies provide low value foreign exchange services for travelers. These are typically located at airports and stations or at tourist locations and allow physical notes to be exchanged from one currency to another. They access the foreign exchange markets via banks or non- bank foreign exchange companies.
1 point in percentage (in forex)
Discussion
Recount the situations in which the following phrases are used in the text under discussion:
1. The top of the foreign exchange market.
2. Levels of access in forex.
3. Participants in forex markets.
4. The role of commercial companies in FX.
5. The importance of national central banks in forex.
6. The reputation of hedge funds in FX transactions.
7. Difference between non-bank FX companies and remittance companies.
8. Low value change of currency by tourists while travelling abroad.
Reading 3
Currency Trading
There is no unified or centrally cleared market for the majority of trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are quite close due to arbitrage. Due to Londons dominance in the market, a particular currencys quoted price is usually the London market price.
The main trading centers are New York and London, though Tokyo, Hong Kong and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.
Fluctuations in exchange rates are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in gross domestic product (GDP), inflation, interest rates, budget and trade deficits or surpluses, large cross-border merger and acquisition deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers order flow.
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Currencies are traded against one another in pairs. As the dollars value eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD (Australian dollar), NZD (New Zealand dollar), CAD (Canadian dollar), have also increased.
Discussion
1. What does currency exchange rate depend on?
2. Why is the London market price of a particular currency considered a quoted price?
3. What are main currency trading centers?
4. When does currency trading happen?
5. Why do fluctuations in exchange rate occur?
6. Is the dollar the only reference currency?
Reading 4
Exchange Rate
Many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The worlds currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses as much of what is going on in the world at any given time as foreign exchange.
Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology (trader perceptions).
Economic factors include: (a) economic policy, disseminated by government agencies and central banks; (b) economic conditions, generally revealed through economic reports, and other economic indicators.
Internal, regional, and international political conditions and events can have a profound effect on currency markets. All exchange rates are susceptible to political instability. Events in one country in a region may spur positive/negative interest in neighboring country and, in the process, affect its currency.
Market psychology and trader perceptions influence the foreign exchange market in a variety of ways: flights to quality, long-term trends, economic numbers and technical trading considerations.
Discussion
1. Why does the price of one currency shift in relation to another?
2. What factors are supply and demand for any currency influenced by?
Reading 5
Lose-lose or Win-win?
The term currency wars has been bandied about ever since Guido Mantega, the Brazilian finance minister, used it in 2010. He was complaining that quantitative easing (QE) by the US was weakening the dollar, and prompting a response from other countries that did not want to lose export competitiveness. This time round, the dollar is strengthening, but the term is being used again.
Currency volatility is on the rise, albeit from a low base. And David Woo of BofAML thinks this is a bad thing. He argues that for many countries facing zero interest rates and binding fiscal constraints, the only policy tool left at their disposal to stimulate growth is weaker exchange rate.
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So the ECB and the Bank of Japans QE programs are designed to weaken their currencies; after all, bond yields are already so low that it is hard to see borrowing costs as a constraint for the corporate sector.
Clearly, all currencies cannot decline, so it might be tempting to think this is a zero-sum game. But it is possible to argue that it is actually a win-win for the global economy; in attempting to depreciate their currencies, central banks reduce real interest rates and these lower real rates stimulate demand and investment.
But Mr. Woo argues instead that currency wars are a lose-lose. He writes that higher currency volatility will increase both the riskiness and the cost of cross border transactions, whether it is trade in goods or capital flows.
Specifically, higher FX volatility means it costs more for companies to hedge; that may cause them to focus more on their home markets than on exports, leading to a slowing in the growth of global trade (which has recently been sluggish for other reasons). Secondly, higher volatility will discourage foreign direct investment (the building of factories, etc.). This will make it more expensive for countries with a current account deficit to finance themselves. Economic growth will thus be more sluggish if the wars continue.
It is a hard case to prove, since the greatest FX volatility in the last 20 years occurred during the Asian/Russian crisis of the late 1990s and the debt crisis of 2008. But it was surely the crises that caused the volatility, not the other way round. Nevertheless, it is probably true that a global environment in which countries feel their neighbors are trying to steal a march on1 them by devaluation is probably a world where co-operation is more difficult, and one where barriers to global trade are more likely to be erected. And that cant be good.
1 gain an advantage over (someone) by acting before they do
Discussion
Last week (1)_____(mark) a milestone in the history of Europes single currency. On January 14th the value of the euro (2)_____(slip) to $1.17, the rate at which it (3)______(introduce) on January 1st 1999. Back then, the currency (4)_____(weaken) fast and (5)_____(hit) parity with the dollar in early 2000, plunging to $0.83 by October of the same year. The slump in the euros value (6)_____(suit) no one. So the worlds big central banks (7) _____(undertake) a program of coordinated intervention to stem the euros fall.
All this time the euros slide (8)______(be) more gradual, but more persistent. Both politics and economics (9)______(undermine) the currency now. Deflation (10)_____(set in): prices across the single-currency area (11)_____(fall) the previous year. The regions growth prospects (12)_____(look) ever feebler.
Exercise 8. Here is one of many dialogues that is taking place in a foreign exchange office. Make up your own dialogue speaking about any other official currencies.
Customer: Could you change dollars into English pounds sterling?
Cashier: Certainly, sir. Ill just check the exchange rates. How much would you
like to change?
Customer: One thousand dollars. And what is the rate of exchange today?
Cashier: One dollar to seventy five pence.
Customer: And what rate can you offer for two thousand dollars?
Cashier: One dollar to ninety pence.
Customer: Oh, the difference is not very big. Change one thousand, please. Here is
the money.
Cashier: Thank you. May I have your passport for a moment, please? We are
always to write down the number of the customers passport if we
change one thousand dollars or more.
Customer: Here it is. No problem.
Cashier: Here is your passport. How would you like the money, sir?
Customer: Oh, give it to me in hundred pounds notes, please.
Cashier: Good. One hundred, two hundred seventy pounds, seventy five
pounds.
Customer: Thank you. Good morning.
Cashier: Good morning, sir.
Exercise 9. Sum up everything you came to know about:
a) Foreign exchange market and its participants;
b) Currency trading;
c) Exchange rates;
d) Currency wars.
UNIT VIII
STOCKS and SHARES
Warm up
Crashes in stock market create a state panic
among the economic growth of the country.
The media love to quote experts saying we are about
to fall into recession. They said that through 2012 but,
as we know, their predictions didnt come true.
So, is the crash imminent?
Section A
Reading 1
What are Stocks?
Stock is a share in the ownership of a company. As you acquire more stock, your ownership stake in the company becomes greater. The stock of a company is sold in units called shares. A share is a unit of ownership, or equity, in a company or corporation. Shares are one of the most traded financial instruments. If you buy a share of a company, you are buying a piece of the company. When you own more than one share in a company or several companies, these are called stocks, because stock generally refers to a portfolio of shares. Whether you say shares, equity, or stock, it all means the same thing.
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Being a shareholder of a public company does not mean you have a say in the day-to-day running of the business. Instead, one vote per share to elect the board of directors at annual meetings is the extent to which you have a say in the company. Individual investors do not own enough shares to have a material influence on the company. It is really the big boys like institutional investors and billionaire entrepreneurs who make the decisions. The importance of being a shareholder is that you are entitled to a portion of the companys profits and have a claim on assets. Profits are sometimes paid out in the form of dividends. Your claim on assets is only relevant if a company goes bankrupt. In case of liquidation, you will receive what is left after all the creditors have been paid.
Another extremely important feature of stock is its limited liability, which means that, as an owner of a stock, you are not personally liable if the company is not able to pay its debts. Other companies such as partnerships are set up so that if the partnership goes bankrupt the creditors can come after the partners (shareholders) personally and sell off their house, car, furniture, etc. Owning stock means that, no matter what, the maximum value you can lose is the value of your investment.
Why does a company issue stock? The reason is that at some point every company needs to raise money. To do this, companies can either borrow it from somebody or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Both methods are kinds of debt financing. On the other hand, issuing stock is called equity financing. Issuing stock is advantageous for the company because it does not require the company to pay back the money or make interest payments along the way. All that the shareholders get in return for their money is the hope that the shares will someday be worth more than what they paid for them. The first sale of a stock, which is issued by the private company itself, is called the initial public offering (IPO).
Whether you work through a broker or decide to invest on your own, understanding stock market terminology will help you to better understand stock market investing.
Thus, a common stock is a security issued by a company that represents partial ownership in the company. Common stock is the most frequently issued kind of stock. It offers a variable return to the stock owner along with the possibility that the stock could lose value. Common stock owners also hold a voting right in the company that is used to vote on company issues.
A preferred stock pays the owner a fixed dividend that is not affected by company gains or losses. The stock represents ownership in the company, but it does not carry with it voting rights on company issues. The risk with preferred stock is if the company experiences a significant rise in revenue, the preferred stock owner receives the fixed dividend rate.
Blue chip stocks are common stocks of high quality that have a long record of earnings and dividend payments. They are often viewed as long-term investment instruments. They have low risk and provide modest but dependable return. They sell at a high price because of public confidence in their long record of steady earnings. Blue chip stocks are offered by well-known companies that have a reputation for offering quality products. Blue chip companies are Coca, Disney, Intel, IBM, Yahoo! (The name blue chip came about because in the game of poker the blue chips have the highest value).
Discussion
1. The more shares an individual investor buys the greater his ownership stake in the company.
2. To have the opportunity to make decisions about the everyday work of the company it is enough for a shareholder to own one share.
3. A shareholder is always given a legal right for a part of companys profit even in case of liquidation.
4. Shareholders are legally responsible for the debts of a company to the extent of the nominal value of their shares.
5. There is only one way for the company to collect money that is needed, namely, by means of borrowing.
Reading 2
Stock Markets
A stock market is the market that people use to trade (buy and sell) shares, which are like small pieces of the company that a person can own. To some it is a puzzle. To others it is a source of profit and endless fascination. The stock market is the financial nerve center of any country. It reflects any changes in the economy. It is sensitive to interest rates, inflation and political events. Really, it has its fingers on the pulse of the entire world.
Taken in its broadest sense, the stock market is also a control center. It is the market place where businesses and governments come to raise money so that they can continue and expand their operations. The stock market is also a place of individual opportunity.
Securities markets can be divided into international, regional and national (domestic) according to the territory they cover.
According to the number of transfers securities markets can be primary (which issue new securities) and secondary (where previously issued securities are bought and sold).
Besides, there is a bull market and a bear market. The terms bull market and bear market describe upward and downward market trends respectively. A bull market is when any asset class runs up in value over an extended period of time. Confidence is high that prices of the asset will continue to rise. A bear market is when the price of an asset class declines pretty substantially over time. The terms are widely used when talking about the major indices in the stock market, such as, Dow Jones Industrial Average, the S&P500 (Standard and Poors 500 stock index) or the NASDAQ (National Association of Securities Dealers Automated Quotation).
The phrase the stock market is often used to refer to the biggest and most important stock market in the world. In the United States, the New York Stock Exchange (NYSE) is the worlds largest stock exchange, located in New York City. It began with 24 stockbrokers trading company paper for investors, organizing what was a chaotic method prior to the NYSE establishment. The 1792 Buttonwood Agreement formally created the NYSE, making it one of the oldest financial markets of any kind in the world. The NYSE acquired the American Stock Exchange, the AMEX, in 2008 to create an even larger organization. The other prominent component of the American stock market, the NASDAQ, contrasts with the NYSE in that there is no face-to-face auction at a special exchange. The NASDAQ trades electronically, the first exchange to do so when it opened in 1971. The NYSE had a predecessor in Europe, the London Stock Exchange, which was established in 1698 to help seafarers and local merchants create a method of trading stocks and commodities at a fair market price. Today, nearly every major international mercantile hub has a stock exchange with trillions of dollars of stocks traded daily.
Stock markets have developed to make the buying and selling of securities easier. The stock markets (or securities exchanges) consist of individual investors, brokers, and intermediaries who deal in the purchase and sale of securities. Securities exchanges do not buy or sell stocks, they simply provide the location and services for the brokers who buy and sell securities, they help to ensure that the price of a deal is fair. To trade on the exchange, a seat must be purchased. A seat is a membership. The members represent stockbrokers. The system of stock exchange is when a stockbroker calls in order to sell, the member representing this broker looks for a buyer at the price requested. And when a broker calls in order to buy, the exchange member looks for a seller at the price offered.
Discussion
Organize the following headings in the order according to the text:
1. The process of trading on the exchange.
2. Components of American stock market.
3. A nerve center of the country.
4. Types of stock markets.
5. The oldest stock exchange in the world.
Reading 3
NYSE (New York Stock Exchange) USA, New York City
NASDAQ (stock market for mainly technology shares) USA
London Stock Exchange UK
Tokyo Stock Exchange Japan
Hong Kong Stock Exchange Hong Kong
Shanghai Stock Exchange - China
Generally, the stocks of the largest companies are traded on the NYSE, sometimes known as the Big Board, the oldest in the US. NYSE is located at 11 Wall Street in New York City. It is by far the worlds largest stock exchange by market capitalization of its listed companies at US$16.6 trillion as of February 2015. Average daily trading value was approximately US$169 billion in 2013. Operated by NYSE Euronext, the holding company created by the combination of NYSE Group, Inc. and Euronext N.V., NYSE offers a broad and growing array of financial products and services in cash equities, futures, options, exchange-traded products (ETPs), bonds, etc. Featuring more than 8000 listed issues it includes 90% of the Dow Jones Industrial Average and 82% of the S&P 500 stock market indexes volume.
The NASDAQ Stock Market commonly known as the NASDAQ (National Association of Securities Dealers Automated Quotations System) is an American stock exchange situated in New York City. In terms of market share and volume traded it is the largest stock exchange in the US. It was founded in 1971 being the worlds first electronic stock market. NASDAQ eventually assumed the majority of major trades formerly executed by the over-the-counter (OTC) system of trading. It was also the first stock market in the US to start trading online. At present it trades shares of more than 3200 companies. NASDAQ is the stock market for mainly technology shares (electronics, software, etc.). Its main index is the NASDAQ Composite. Stock market is also followed by S&P 500 index.
The London Stock Exchange (LSE) is the oldest and third-largest stock exchange in the world by market capitalization (US$6.06 trillion as of December 2014). The Exchange was founded in 1801 and its current premises are situated in Paternoster Square close to St Pauls Cathedral. It is the most international of all the worlds stock exchanges, with around 3,000 companies from 70 countries admitted to trading on its markets. The LSE runs several markets for listing, giving an opportunity for different sized companies to list. There are two main markets on which companies trade on the LSE: 1. Main Market, which is home to over 1,300 large companies from 60 countries. The FTSE 100 Index (Financial Times Stock Exchange 100 Index) (footsie) is the main share index of the 100 most highly capitalized UK companies listed on the Main Market. 2. Alternative Investment Market (AIM), which is LSEs international market for smaller growing companies. There are also several electronic platforms on which the different products trade.
The Tokyo Stock Exchange or TSE, for short, is a stock exchange located in Tokyo, Japan. It was established in 1878. Now it is the fourth largest stock exchange market in the world by aggregate market capitalization of its listed companies. It had 2,292 listed companies with a combined market capitalization of US$ 4.09 trillion as of April 2015. Stocks listed on the TSE are separated into the First Section for large companies, the Second Section for mid-sized companies, and the Mothers (Market of the high-growth and emerging stocks). As of October 31, 2010, there were 1,675 First Section companies, 437 Second Section companies and 182 Mothers companies. One of the main indices tracking the TSE is Nikkei 225.
The Hong Kong Stock Exchange (HKSE) is a stock exchange located in Hong Kong, Victoria City. It is Asias second largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange (US$2.96 as of January 2014), and the fifth largest in the world. As of November 2013, the HKSE had 1,615 listed companies, 776 of which are from mainland China, 773 from Hong Kong and 102 from abroad. Hong Kongs first formal stock market dates back to 1891 when the Association of Stockbrokers in Hong Kong was established.
The Shanghai Stock Exchange (SSE) was established in 1990 and is the worlds sixth largest stock market by market capitalization (US$2.3 trillion as of December 2011). It is one of the two stock exchanges operating independently in the Peoples Republic of China, the other is the Shezhen Stock Exchange. Unlike the Hong Kong Stock Exchange, the SSE is not entirely open to foreign investors. The main reason is tight capital account controls by Chinese authorities. The securities listed at the SSE include the three main categories of stocks, bonds, and funds. Bonds traded on SSE include treasury bonds (T-bond), corporate bonds, and convertible corporate bonds.
| stockbroker, dealer (trader), asset manager, investor, shareholder, creditor, client, entrepreneur, merchant, director, economist, officials, intermediary |
1. An owner of shares in a company;
2. One of the committee of top managers who control a company;
3. A person or organization that put money in stocks in order to make a profit;
4. Someone who starts a company, arranges business deals, and takes risks in order to make a profit;
5. A person or business to whom another person or business owes money;
6. A person or organization whose job is to buy and sell shares, bonds, etc. for investors;
7. Someone who deals in shares, bonds, currencies, commodities on a a market either for himself or for a financial institution;
8. A person or organization that buys and sells goods or a particular type of goods;
9. Someone whose job is to manage money for investment so that it makes as much profit as possible;
10. A person or organization that helps to arrange agreements or business deals between other people or organizations;
11. Someone who studies the way in which wealth is produced and used in an area;
12. People who have responsible positions in organizations;
13. Someone who pays for services or advice from a professional person or organization.
Exercise 2. Introduce corresponding personal nouns into the text (initial letters and the ending of the plural form are given). Give the text the appropriate heading.
At a few minutes before ten on the morning of August 6th, some two dozen smartly attired men and women slowly assemble on the fourth floor of 101 Union Avenue in downtown Harare. They gather in a small room around a chain of wooden tables waiting for the start of the days trading on the Zimbabwe Stock Exchange (ZSE). In front of each (1) t______ is a numbered green rectangle, which marks his or her spot on the trading floor.
African stock markets have been hot this year in part because of growing interest from rich-world (2) i______s who want exposure to the continents fast-growing economies.
Each weekday morning a small group of (3) b______s gather around the tables for about an hour to trade stocks the old-fashioned way, by calling out buy or sell orders face to face. A (4) b______ who matches one of his (5) b______s with one of his (6) s______s can get two lots of fees.
The number of (7) b______s grew to handle extra trading. The adoption in 2009 of the US dollar as Zimbabwes main currency cured inflation and drew in foreign
(8) i______s for locals to sell to.
Each (9) t______ comes to the stock-exchange floor with orders to buy or sell that have been placed by (10) c______s either earlier that morning or after the previous trading days close. There are no telephones. (11) T______s are entrusted to get the best possible price for their (12) c______s.
The (13) b______ and (14) s______ scribble the details of the transaction onto their pads. Trading slips are collected every ten minutes or so by a (15) c______ and will be matched when the market closes. At 10.45 am the room suddenly falls silent. There is time for one final deal to be struck and then the (16) t______s drift quietly from the room.
