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