capital market instruments and its role in banking

8/8/2019 Capital Market Instruments and Its Role in Banking.

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Presented to: Sir Zahid Hussain

Presented by: Aisha tabassum

Topic:

Capital market instruments and its role inbanking.


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AcknowledgementAcknowledgementFistFist of of allall II wouldwould likelike toto thank thank mymy AlmightyAlmighty AllahAllah whowhogavegave meme couragecourage toto completecomplete thisthis assignmentassignment withwith fullfull of of

mymy knowledge,knowledge, skillsskills andand devotiondevotion toto thethe work work..

II amam alsoalso thankfulthankful toto mymy Prof Prof.. Mr Mr.. ZahidZahid fromfrom AIMSAIMS

COLLEGECOLLEGE OFOF COMMERCECOMMERCE FAISALABADFAISALABAD whosewhose help,help,stimulatingstimulating suggestionssuggestions andand encouragementencouragement helpedhelped meme ininallall thethe timetime of of researchresearch for for andand writingwriting of of thisthis assignmentassignment. .


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Topics which I discussed today:Topics which I discussed today:

IntroductionIntroduction

Practical StudyPractical StudySwot analysisSwot analysisConclusionConclusionRecommendationsRecommendations


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IntroductionIntroduction

What is capital market?What is capital market?

What is money market?What is money market?

Money market &Capital market.Money market &Capital market.


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Capital market instruments.Capital market instruments.Treasury/Government BondsTreasury/Government BondsTreasury/Government NotesTreasury/Government NotesTreasury/Government BillsTreasury/Government BillsStocksStocksMortgagesMortgagesCorporate bondsCorporate bondsGovernment securitiesGovernment securities


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Government Agency SecuritiesGovernment Agency Securities

State and Local Government BondsState and Local Government Bonds

Consumer and Bank Commercial LoansConsumer and Bank Commercial Loans

Role of capital market :Role of capital market :


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Practical studyPractical studyAsian development bank Asian development bank

Introduction:Introduction:TheThe AsiaAsia BondBond Monitor Monitor (ABM)(ABM) reviewsreviews recentrecentdevelopmentsdevelopments inin EastEast AsianAsian locallocal currencycurrency bond bondmarketsmarkets alongalong withwith thethe outlook,outlook, risks,risks, andand policy policychallengeschallenges.. ItIt coverscovers thethe 1010 AssociationAssociation of of SoutheastSoutheast AsianAsian Nations Nations member member countriescountries plus plusthethe People'sPeople's RepublicRepublic of of ChinaChina;; HongHong Kong,Kong,ChinaChina;; andand thethe RepublicRepublic of of KoreaKorea..


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LocalLocal currencycurrency bond bond marketsmarkets inin emergingemerging EastEastAsiaAsia expandedexpanded by by anan annualannual 1818..88%% asas of of thethe endend

of of June,June, withwith $$44..88 trilliontrillion inin paper paper outstandingoutstanding..ThisThis largelarge expansionexpansion waswas drivendriven by by 2424..44%% year year--onon--year year growthgrowth inin thethe corporatecorporate bond bond market,market,whichwhich hashas become become anan increasinglyincreasingly importantimportantsourcesource of of fundingfunding for for private private sector sector investmentinvestment..StrongStrong offshoreoffshore andand onshoreonshore demanddemand for for emergingemergingEastEast Asia'sAsia's locallocal currencycurrency bonds bonds hashas reducedreduced thethe

premiums premiums paid paid onon corporatecorporate debtdebt over over governmentgovernment benchmark benchmark bonds bonds andand contributedcontributed toto aa flatteningflatteninginin governmentgovernment bond bond yieldyield curvescurves..


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Emerging East Asian LocalEmerging East Asian Local

Currency Bond MarketsCurrency Bond MarketsBond Market Developments in theBond Market Developments in theSecond Quarter of 2010Second Quarter of 2010GrowthGrowth inin emergingemerging EastEast AsiasAsias locallocalcurrency(LCY)currency(LCY) bondbond marketmarket inin 22QQ1010,,whichwhich exceededexceeded11QQ1010ss growthgrowth raterate of of 33..88%% quarterquarter- -onon--quarter,quarter, waswas backedbackedacrossacross thethe regionregion byby significantsignificant policypolicymeasuresmeasures andand strongstrong innovationinnovation inin bothboth

governmentgovernment andand corporatecorporate bondbond marketsmarkets. .


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Interest in retail bonds increased in 2Q10Interest in retail bonds increased in 2Q10FollowingFollowing severalseveral monthsmonths of of delaydelay duedue toto political politicaltensions,tensions, thethe ThaiThai governmentgovernment soldsold 8080 billion billion ininsavingssavings bonds bonds inin JuneJune outout of of aa planned planned totaltotal of of 100100

billion billion.. TheThe PhilippinePhilippine governmentsgovernments retailretail bonds bondshavehave continuedcontinued toto attractattract domesticdomestic investor investor interestinterest.. TheThe PhilippinesPhilippines soldsold aa totaltotal of of 9797..55 billion billionof of retailretail treasurytreasury bonds bonds inin AugustAugust.. OneOne of of thethe mostmostliquidliquid peso peso bonds bonds atat present present isis aa 5050 billion billion retailretailtreasurytreasury bonds bonds issuedissued inin September September 20092009..


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Corporate Bond Market DevelopmentsCorporate Bond Market Developments

TheThe emergingemerging EastEast AsianAsian44 locallocal currencycurrency(LCY)(LCY) corporatecorporate bondbond marketmarket grewgrew2424..44%% yearyear--onon yearyear inin 22QQ1010,, comparedcomparedwithwith 1616..77%% forfor thethe governmentgovernment bondbondmarketmarket. .


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Bond Market ReturnsBond Market ReturnsTheThe AsianAsian BondBond FundFund (ABF)(ABF) PanPan AsianAsian BondBondIndexIndex hashas gainedgained 77..99%% toto datedate inin 20102010,,comparedcompared withwith 55..00%% forfor allall of of 20092009IndonesianIndonesianbondsbonds werewere thethe bestbest performers,performers, gaininggaining1515..00%%,, followedfollowed byby thethe PhilippinesPhilippines ( (99..33%%)) andandThailandThailand ( (77..55%%))..TheThe yearyear--toto--datedate returnsreturns forforemergingemerging EastEast AsiasAsias bondbond marketmarket havehave ininmanymany casescases beenbeen overtakenovertaken byby returnsreturns ininindividualindividual equityequity marketsmarkets. .


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Swot AnalysisSwot AnalysisStrengths:Strengths:

IncreasingIncreasing investmentsinvestments inin SecuritiesSecurities Market,Market,thethe CompanyCompany isis alsoalso investinginvesting inin multiplemultiplespheresspheres -- people, people, technology,technology, capacitycapacityexpansionexpansion andand brand brand building building..

ThisThis isis essentialessential for for sustainingsustaining thethe growthgrowthmomentummomentum andand continuouscontinuous ValueValue creationcreation


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WEAKNESSES:WEAKNESSES:

NoNo tradingtrading byby tradingtrading membersmembers

DueDue toto changechange inin technologytechnology thethe rolerole of of

regionalregional stock stock exchangeexchange needsneeds toto bebereinventedreinvented. .


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O PP O RTUNITY:O PP O RTUNITY:AA largelarge domesticdomestic marketmarket thatthat isis stillstill intointotraditionaltraditional fixedfixed incomeincome andand other other governmentgovernment savingssavings isis allall buy buy bound bound totoenter enter thethe marketmarket sooner sooner if if notnot later later..


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THREAT:THREAT:

GlobalGlobal EconomicEconomic slowdown,slowdown, CurrencyCurrencymismanagement,mismanagement, HighHigh globalglobal commoditycommoditypricesprices. . O verO ver valuationvaluation inin IndexIndex scripts,scripts,NonNon LiquidityLiquidity inin nonnon--derivativesderivatives relatedrelatedscriptsscripts. . ChangeChange inin governmentgovernment focusfocus ononcontrollingcontrolling inflationinflation. .


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CONCLUSIONCONCLUSIONInIn lightlight of of thethe above,above, II defineddefined capitalcapital market,market,MoneyMoney marketmarket andand CapitalCapital marketmarket instrumentsinstruments. .WhileWhile appreciatingappreciating thethe stepssteps GovernmentGovernment hashastakentaken inin brining brining aa shiftshift inin thethe wayway capitalcapital marketmarketwaswas regulated,regulated, wewe shouldshould be be prepared prepared toto thethechallengingchallenging timetime aheadahead andand work work onon thethechallengeschallenges discusseddiscussed.. ADBADB being being aa longlong standingstandingdevelopmentdevelopment partner partner of of PakistanPakistan wouldwould continuecontinueworkingworking for for creatingcreating thethe best best possible possible enablingenablingenvironmentenvironment for for thethe domesticdomestic capitalcapital marketmarket


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RecommendationsRecommendationsTheThe GovernmentGovernment agreesagrees withwith thethe viewsviews thatthatcapitalcapital marketsmarkets areare keykey toto improvingimproving thethefinancialfinancial wellbeingwellbeing of of allall New New ZealandersZealandersandand aa vitalvital sourcesource of of financefinance for for business business..

ItIt isis recommendedrecommended thatthat strengthenstrengthen andand better better targettarget thethe FinancialFinancial AdvisersAdvisers ActAct arearealsoalso being being progressed progressed..


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capital market instruments and its role in banking

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