debt market ppt
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Smt. Chandibai himathmal
Mansukhani College
• Class : S.Y B.F.M• Subject : Debt Market• Semester : III• Date : 23/07/2012
Presented to,Prof.Riya Nathani
Group Members and Their Roll Nos.
Divya singhNavin JethwaniChunky LullaHemant
ChaudharyLaveen ParyaniDinesh WadhwaDinesh DulaniLaveen wadhwaHitesh Kukreja
Roll No. 53Roll No. 22Roll No. 54Roll No. 09Roll No. 49Roll No. 51Roll No. 50Roll No. 58Roll No. 55
Topics Covered in Debt. MarketIntroduction of Debt Market
Structure of Financial Market
Government Securities
Commercial papers
Treasury Bills
Repo
Current News
Debt MarketMeaning of Debt MarketThe debt market is any market situation where the trading Debt instruments like:– Bonds– Commercial Papers– Treasury Bills– Government securities take place
Who can participate ?–Institutional investors–Government–Traders–Individuals
Financial Market Structure
Financial Market
Money Market
Debt Market
G-Securities
Central Govt.
State Govt.
BondsCapital Market
Forex market
Government Securities
Features :
• Issued at face value
• No default risk as the securities carry sovereign guarantee.
• Ample liquidity as the investor can sell the security in the secondary market
• No tax deducted at source
• Can be held in Demat form
Commercial paper Benefits and intro:
They are negotiable
Raising short term funds.
Introduced 1990 in India
Advantages of commercial paper:
High returns
Easy to raise long term capital
Flexibility
Guidelines for commercial paper
Issues of commercial paper
Investment in commercial paper
Denomination
Maturity
Issuing and paying agent
Treasury bills
INTRODUCTION•Instruments of short term borrowing by – Central Govt.– State Govt.
OBJECTIVES:• Issued to raise funds • Meeting expenditure needs • Provide outlet for parking temporary surplus funds by investors.
INVESTORS:• Can be purchased by any one (including individuals) • Except State govt.• issued by RBI
Maturity : 91 days and 364 days.
Features
• Highly liquid
• Safe investment
• Attractive yield.
• RBI sells on auction basis (to bidders quoting above the cut-off price fixed by RBI)
DATED SECURITIES
• Instruments tenure is over one year.
• Returns on dated securities are based on fixed coupon rates
• Considered risk free.
What is Repo?• Repurchase agreement (A money Market Instrument)
• Short term borrowing and lending
• Decreases liquidity in the market when done by RBI
Participants in Repo Market
Banks Insurance companies registered with IRDA Mutual Fund registered with SEBI NBFC registered with RBI
END
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