Financial Market

Settlement -

Spot
Futures .

L
Time
Based
Issuance
AssetClass
·

Money Market ( < 14) Y

((44) Dest Primary

Capital Market
secondary
Equity

Money Market
Money
traded
for a time less than &Y .
-
is

Capital Market
Money
is traded
for maturity
than 14 .
-
a more

AssetClass
,
Debl
Bonds ,Meditorsof companya
First claim in Liquidation

Equity
Row,omampofis-evinPNs
MONEY Market

Maturity of
instrument is less than 1
.
year
·

#RECALL
Repo GDebtinstrumenta
Rate
.
 short term debt instruments

unsecured .
usually
Loan

<1 year
Maturity .

> Gove
Who can issue Banks and Other FIS
>

companies

Crout

T-Bill's casn
Manageme
a
Ways and Means
advances

Loan from RBI of Repo

only, uno
o
rate urtain
to a
govtState . Limit up
Y

budget
when mismatch in .

Banks and
Other FI

-
CBLo-issuedbya wars .

Repo &

artificate of
Call
Money Nice
a
deposits
Short
n

rep us ey commercial banks.

 commercial
companies - papers
notes .
promissory
Short term debt instruments
I discounted value and
sold at
at
repurchased
face value e.

aka 'Neal
Money' very liquid
.
-

Long ferm
Debt Instruments

more the I
Matusity
is .
year
> Gout
who can issue Banks and other FIS

companies

① Gut
-
-
aka Govt securities
govt ,
Bonds ,
Sovereign Bonds
edge
-'
almost assured Gilt
repayment
Whose Bond is better -
USA or Pakistan ?

weived to know financial

History
Credit
Agency
collects info about individuals and business debt.
company
-

assigns numerical value - credit score .

creditreport CRA Credit

Score
accessible todebtors .
 Global credit
for and
rating agencies
-

performcredit
this task a
country
give scores.

:Moodyo
ex

SKP
> ES
-
2021

↓
o
Credit rating agenis

Based again a mes

who
manages govt
securities - RBI (Both entral and state

Other Bonds RBI

by
- RealI nterest Rate a

High inflation
People
in a
want to invest
better asset
imports
problematic, gaid
Black <
properta Creal estate)
Money
Solutions- >
D Inflation indexed Bonds .
·
Bond interest rate=
inflation + 2
% > Real interest rate is
positive
.

-
Indexation
rinking
to an
underlying statistic and then
calculating
value.
 Bond .
Sovereign Gold >
-
Bond issued RBI value is as
by
(on behalf of govt)
per prevailing gold rate

Maturity- 8
87 interest Rate-2 5%
post
.

amount as
per prevailing gold
rate
of that
a

Aym to 20 available
Buy gold bonds instead
of gold .
:
from
kg
Budget
15
Import duty reduced from
Gold
2027 -

% to 6 %.

companies - longterm debt instruments.

-
① Bonds/debentures convertible/non convertible .

aka
Hybrid instruments .

② Redumable Have a
fixed tenne .
-

-retically)
③ irredeemable in
perpetuity ,
but
usually buybaca
 -
issued urban local bodies
other
types of Bonds ,
Municipal Bonds
by
Ser issues
regulations.
Masala Bonds .
(launched by IFC - World Bank)
wants to in
-
Indian raise
money morency J

company from
abroad Masala
Bund .

Bond.
Maharaja
Forigh company- wantin
Mahaina
from Bind
money
wry
is .

Sunty Bonds. insures

govt against infrastructure .
delays
-

contractor Hired
by Gort for any work (ex Road)
:

C
E
Insures
contractorswaya

Sovereign Green Bonds.

RBI sells on
behalf of govt.
ERBI :
this will be used
people govt
,

money
,

for environmentally
,

SaB friendly projects in

form
subsidies tax
of
cuts
grants
.
, ,
 shares

Fustruments aident
of ownessi
&
ofthecompany Boardofdirectors
Brain discs to

Preference y 'fixed dividend rate .

shall
prefered on Liquidation
types convertible .

voting rights
> No

ordinary voting rights

-

Shares to
employees .

Stock options (ESOP) "stock warrants

essentially thecall
a
Rightspecificprechase company'sdata
to stock

option for.
at
price
and
specific .

employees
Fresh by company directly
issued another issue
by
·

shareholder
,
no
fresh issue

↓
does Not
impact impacts existing shareholding .
existing shareholding
 Important Ratios and terms .

Goodwill

Marketcap small
/Mid/large
·
-

·
Ratios :

(i) PIE Natio

(ii) EPS

(iii) Return on
Capital
(iv) Return on
equity
(v) Debt
equity (overage)
:

(vi) Enterest ratis

coverage
·
EBITDA

·
FPO

offer for sale

·

Qualified institutional placement

Private
placement
share
pledging
·

·
ASBA

Retail investors
 Beta-Monitors
volatility
alpha- Measures
performance .

analysis
-
fundamental and technical.

algo trading
·

co-location

Circuit Breaker

short
Selling
·

Negotiated dealing system phonic

Matching
order

Funds
Hedge
·
 Fixed Capital Working Capital
-

assets or investments needed to -

assets or investments that an

organisation
to
establish and operate a business
. uses
finance
day-to-day operations .

Money put
assete a
cust
in
long-te Money
- put in
company's
-
.

Real estate
Eg . ,
tool ,

machinery Eg .
Money used to make
Employees
payments ,
tax
payment

assets assets
Tangeble Intangible
-

assets that can be touched. -

assets that can't be touched.

and measurable
physical non-physical assets

Equipment
,Intellectual property right the
-

Eg . Inventory ,
Vehicles ,
Eg