bond market

[ankitgokani]

The bond market (also known as the debt, credit, or fixed income market) is a financial market where participants buy and sell debt securities, usually in the form of bonds. As of 2006, the size of the international bond market is an estimated $45 trillion, of which the size of the outstanding U.S. bond market debt was $25.2 trillion.[1]

Nearly all of the $923 billion average daily trading volume (as of early 2007) in the U.S. Bond Market[2] takes place between broker-dealers and large institutions in a decentralized, over-the-counter (OTC) market. However, a small number of bonds, primarily corporate, are listed on exchanges.

References to the "bond market" usually refer to the government bond market, because of its size, liquidity, lack of credit risk and, therefore, sensitivity to interest rates. Because of the inverse relationship between bond valuation and interest rates, the bond market is often used to indicate changes in interest rates or the shape of the yield curve.

bonds are now a days used by many companies so plz provide any details if any1 have

 

[anant1a]

• Bond: Bonds are debt and are issued for a period of more than one year.
• Convertible Bond: Bonds that can be converted into common stock at the option of the
holder.
• Corporate Bond: Debt obligations issued by corporations.
• Debt Market: The market for trading debt instruments.
• Equity: The portion in an account that reflects the customer’s ownership interest.
• Equity Market: Also called the stock market, the market for trading equities.
• FII: Foreign Institutional Investors
• G-Secs: The Reserve Bank of India (RBI) issues bonds known as Government of India
Securities (G-Secs) on behalf of the Government of India.
• Inflation-Indexed Bonds: When one buys Inflation-Indexed securities, the interest is paid on
the inflation-adjusted principal amount.
• Redemption: The retiring of a debt instrument by paying cash.
• Secondary Market: The market in which securities are traded after the initial (or primary)
offering. Gauged by the number of issues traded. The over-the-counter market is the largest
secondary market.
• Step-up Bond: A bond that pays a lower coupon rate for an initial period which then
increases to a higher coupon rate.
• Zero Coupon Bonds: Such a debt security pays an investor no interest. It is sold at a
discount to its face price and matures in one year or longer.

 

[naveen007]

thks for your valuable information, its very valuable for me it helped me in carrying out further process in my work

 

[symbistud]

• Bond: Bonds are debt and are issued for a period of more than one year.
• Convertible Bond: Bonds that can be converted into common stock at the option of the
holder.
• Corporate Bond: Debt obligations issued by corporations.
• Debt Market: The market for trading debt instruments.
• Equity: The portion in an account that reflects the customer’s ownership interest.
• Equity Market: Also called the stock market, the market for trading equities.
• FII: Foreign Institutional Investors
• G-Secs: The Reserve Bank of India (RBI) issues bonds known as Government of India
Securities (G-Secs) on behalf of the Government of India.
• Inflation-Indexed Bonds: When one buys Inflation-Indexed securities, the interest is paid on
the inflation-adjusted principal amount.
• Redemption: The retiring of a debt instrument by paying cash.
• Secondary Market: The market in which securities are traded after the initial (or primary)
offering. Gauged by the number of issues traded. The over-the-counter market is the largest
secondary market.
• Step-up Bond: A bond that pays a lower coupon rate for an initial period which then
increases to a higher coupon rate.
• Zero Coupon Bonds: Such a debt security pays an investor no interest. It is sold at a
discount to its face price and matures in one year or longer.

thks for your valuable information, its very valuable for me it helped me in carrying out further process in my work

thanx for your valuable information, which would help in my project work..

 

[symbistud]

• Bond: Bonds are debt and are issued for a period of more than one year.
• Convertible Bond: Bonds that can be converted into common stock at the option of the
holder.
• Corporate Bond: Debt obligations issued by corporations.
• Debt Market: The market for trading debt instruments.
• Equity: The portion in an account that reflects the customer’s ownership interest.
• Equity Market: Also called the stock market, the market for trading equities.
• FII: Foreign Institutional Investors
• G-Secs: The Reserve Bank of India (RBI) issues bonds known as Government of India
Securities (G-Secs) on behalf of the Government of India.
• Inflation-Indexed Bonds: When one buys Inflation-Indexed securities, the interest is paid on
the inflation-adjusted principal amount.
• Redemption: The retiring of a debt instrument by paying cash.
• Secondary Market: The market in which securities are traded after the initial (or primary)
offering. Gauged by the number of issues traded. The over-the-counter market is the largest
secondary market.
• Step-up Bond: A bond that pays a lower coupon rate for an initial period which then
increases to a higher coupon rate.
• Zero Coupon Bonds: Such a debt security pays an investor no interest. It is sold at a
discount to its face price and matures in one year or longer.

thks for your valuable information, its very valuable for me it helped me in carrying out further process in my work

thanx for your valuable information, which would help in my project work..

 

[symbistud]

thks for your valuable information, its very valuable for me it helped me in carrying out further process in my work

the current bond market from the last 1 month has been quiet diacy.lots of volatality was seen in the debt market on grounds of heavy borrrowing and frequent omo by RBI. IN the long run end market have a good support at level of 6

 

[symbistud]

thks for your valuable information, its very valuable for me it helped me in carrying out further process in my work

Interest rates unlikely to come down further

The stimulus packages offered by government to fight the impact of global recession on Indian economy seem to be backfiring. At present,
it is discouraging the efforts of RBI to bring down the interest rates to revive demand in the domestic market.

On Thursday, interest rate on 10-year government bond scaled the 7% mark to touch 7.02%. The rate had fallen to 4.86% in January 2009. The interest rates firmed up as the government announced that it would borrow Rs 2,41,000 crore in the first six months of 2009-10 to fund stimulus packages. Government would borrow Rs 48,000 crore every month in the first quarter and Rs 32,000 crore every month of the second quarter, which is putting pressure on interest rates.

Indian Bank's Association chairman TS Narayansami said this huge government borrowing programme is creating upward pressure on interest rates. So, RBI's step to cut its short term lending rate to banks (repo rate) will not help in bringing down the rates, he added.

Meanwhile, RBI governor D Subbarao at a CII conference said he was talking to various banks to understand why the lending rates are not coming down despite the central bank has cut the key rates. ‘‘Policy rates have to be transmitted to lending rates by banks. We are looking into the transmission mechanism,'' Subbarao said. He added that interest rates should soften for India to become competitive. Fall in lending rates will revive the demand and so the economic activities.

However, bankers feel that the softening of interest rate is no more linked to cut in key policy rates. Narayansami said, ‘‘RBI's repo rate cut will not have any effect as the interest rates on government bonds are firming up.'' This means, even if RBI reduces the policy rates, taking advantage of inflation touching zero, it will not bring down the interest rates in the present condition.

ICICI MD KV Kamath also said that firming up of the interest rates on government bond is not allowing lending rates to come down. Because of rise in the bond rates, cost of funds is not reducing, prompting banks to hold interest rates at higher levels.

As the government's spending as part of the stimulus packages would be financed from the borrowed money, this will affect availability of funds to the private sector and create upward pressure on interest rates.

In the current financial year, government's borrowing has increased to Rs 3,26,000 crore as again the budgeted amount of Rs 1,33,000 crore. In the 2009-10 also, government will have to borrow around Rs 3,40,000 crore to fund revenue shortfall.

Bankers are arguing that RBI should buy bonds from the market and inject money into the system. Narayansami said instead of cutting the policy rates, RBI should pump more money by purchasing government bonds from the market. As the inflation has already fallen to 0.27% during the week ending March 14, the government can inject liquidity without worrying about the inflation. This would only help in bringing down the interest rates, bankers said.