SECURITIES MARKET AND ITS PARTICIPANTS 3
1 Essence, tasks and functions of the securities market 3
2 Types of the securities market 6
3 Structure of the securities market 9
4 Participants in the securities market 10
SECURITIES. SECURITIES MARKET OPERATIONS 16
1 Essence and types of securities 16
2 Operations with securities 21
1 Concept and fundamental properties of stocks 25
2. Valuation of shares 28
3. Acquisition and redemption of shares 31
BONDS 34
1 Classification of bonds 36
2 Bond Pricing 37
Interest rate structure 39
Plotting the Interest Rate Curve 39
3 Risks of bonds. Duration and bulge 40
Duration and convexity 41
GOVERNMENT SECURITIES 42
1 Types of government bonds 44
2 Participants in the government bond market. Market infrastructure 50
3 Operations in the government bond market 52
INTERNATIONAL SECURITIES 55
1 The essence of international securities and their types 56
2 Organization of Eurobond issue 59
SHORT TERM FINANCIAL INSTRUMENTS 63
1. Certificates of deposit and savings. Price and yield of certificates of deposit and savings 64
2. Bills of exchange. Promissory note price and yield 66
3. Commercial securities. Exchange-traded bonds 68
DERIVATIVE SECURITIES 70
1. Subscription Rights and Warrants 70
2. Options 72
Option cost 74
Using options 75
Issuance of options 75
3. Futures contracts 76
FUNDAMENTALS OF SECURITIES INVESTMENT PORTFOLIO MANAGEMENT 79
1 Concept of a portfolio of securities. Portfolio types 79
2 Portfolio management 81
FUNDAMENTAL ANALYSIS OF INVESTMENT ATTRACTIVENESS OF SECURITIES 84
TECHNICAL ANALYSIS ON THE SECURITIES MARKET 87
1 Technical analysis. General 87
2 Graphical analysis 89
3 Eliot Wave Theory 99
1 The essence of international securities and their types 53
2 Organization of Eurobond issue 56
1 The essence of international securities and their types
The official definition of Eurobonds is given in the Directive of the Commission of the European Communities of March 17, 1989, which regulates the procedure for offering new emissions on the European market.
In accordance with this Directive, Euro papers are tradable securities with the following characteristic features, namely:
Underwritten and placed through a syndicate, at least two members of which are registered in different states;
offered in significant volumes in one or more countries, except for the country of registration of the issuer;
They can be initially purchased only through the intermediary of a credit institution or other financial institution.
Eurobonds include:
Euronotes(medium-term euronotes, EMTNs) - medium-term registered bonds, which are usually issued for a specific investor. The main advantage of euronotes is the ability to organize their issue in a few days or even hours. Thanks to this, as well as low emission costs, the euronotes sector has tripled over the past six years. True, the central banks of the main European countries impose serious restrictions on their release.
Eurobills(euro-commercial paper, ECP) - unsecured obligations that are not intended for public placement and are not traded on the secondary market. As a rule, Euro bills are issued for a period of one to five years by companies whose solvency is beyond doubt International bonds.
The latter, in turn, are divided into:
eurobonds eurobonds;
foreign bonds foreigh bonds;
global bonds global bonds;
parallel bonds parallel bonds.
Eurobonds. Eurobonds are bonds that are not denominated in the currency of the issuer's host country and which are placed both outside the issuer's host country and outside the country in whose currency they are denominated. Usually Eurobonds are placed on international bond markets.
There are several characteristics that distinguish Eurobonds from other forms of borrowing:
Eurobonds are placed simultaneously in the markets of several countries, while the currency of the Eurobond loan is not necessarily national, both for the lender and the borrower.
The placement is carried out by an emission syndicate, which, as a rule, is represented by banks registered in different countries.
The issue and circulation of Eurobonds is carried out in accordance with the rules and standards established in the market. The main part of Eurobond issues is made without collateral, although in some cases collateral is possible in the form of a guarantee of third parties or the property of the issuer. The issue of Eurobonds is accompanied by a number of additional conditions and clauses designed to reduce risks for securities holders. The most common are the so-called. “Negative collateral” (the terms of the issue stipulate the obligation of the issuer not to issue any more securities with the preemptive right of redemption). In the event of a technical default (non-payment) on any one Eurobond issue, a cross-default is provided - early redemption of all Eurobond issues in circulation. The issue of bonds, as a rule, is conditioned by the obligations of the issuer to maintain a certain ratio of equity and debt capital, to limit the issue of other debt obligations within a specified period of time.
Eurobonds are usually bearer bonds.
Eurobond income is paid in full without withholding tax in the country of the issuer. If local legislation provides for withholding tax on interest paid by the borrower, the latter is obliged to bring the amount of interest payments to a level that provides the investor with interest income equal to the nominal coupon.
A type of Eurobonds are dragon bonds - Eurodollar bonds placed on the Asian (primarily Japanese) market and listed on an Asian stock exchange, usually in Singapore or Hong Kong.
The share of Eurobonds in the Eurobond market is over 90%. Currently, the total value of outstanding Eurobond loans is approximately 4 trillion. dollars, which is approximately 10% of the global bond market.
The prefix "euro" is now a tribute to tradition, since the first Eurobonds appeared in Europe, they are traded mainly in the same place.
The issuer can place bonds both domestically and internationally. Bonds placed by an issuer outside the country where the issuer belongs are called international bonds. There are such varieties of these bonds as foreign bonds and Eurobonds.
Foreign or foreign bonds are placed by the issuer outside the country in which the issuer is located, in the currency of the country of placement. Such bonds often receive specific names. For example, foreign bonds placed in the United States and denominated in US dollars are called "yankee bonds". Bonds issued by non-residents in the UK are called “bulldogs bonds”, in Japan - “samurai”.
Global bonds are bonds placed simultaneously on the Eurobond market and on one or more national markets.
Parallel bonds Parallel bonds - bonds of one issue, placed simultaneously in several countries in the currency of these countries.
The term "international bonds" is used in broad and narrow meanings. In a broad sense, this concept includes all major debt instruments placed in foreign markets, that is, these are long-term debt instruments or, in fact, bonds (bonds), and medium-term debt instruments (notes).
The development of the international bond market is associated with the growth of transnational corporations and the internationalization of economic life. The issuance of international bonds allows individual states and large companies to meet their capital needs by attracting it in the markets of other countries.
The meaning of purchasing foreign bonds for an investor is that he gets the opportunity to diversify internationally the risk of default on his investments and reduce the risk from possible fluctuations in exchange rates. For example, a French investor can purchase bonds of a US corporation denominated in dollars. Suppose that at the time of buying the bonds, the dollar / euro exchange rate was 1: 1. After some time, at the time of interest payment, the dollar / euro exchange rate was, for example, 1.2: 1. The investor must convert the interest income into euros at the current rate, therefore, he will suffer losses. If an investor buys bonds of an American company denominated in euros, then he will not have to worry about the exchange rate.
The first more or less significant issues of foreign bonds placed by foreign issuers in Western Europe and North America appeared in the second half of the 40s. XX century, but the most active process of issuing foreign bonds began to develop in the early 60s.
The issue of foreign bonds must be carried out in accordance with the rules of the country where the bonds are placed. However, in the area of taxation and circulation in the secondary market, foreign bonds are very close to Eurobonds.
The emergence of the Eurobond market is usually attributed to 1963, when the Italian company Concessioni e Costruzioni Autosfade issued a loan for 15 million dollars, although several similar loans were made earlier. Since the late 60s. the rapid growth of euro-loan issues begins. If in the 70s. the volume of issue of Eurobonds was approximately equal to the volume of issue of foreign bonds, then, starting in 1982, the issue of Eurobonds began to overtake the issue of foreign bonds, and in the 90s. the volume of issue of Eurobonds has already exceeded the volume of issue of foreign bonds by several times.
As statistics show, from half to 2/3 of all Eurobonds are issued by corporations, and the rest, in approximately equal shares, is carried out by the governments of various states and international organizations. To successfully place bonds on international markets, the issuer should receive a rating from at least one of the rating agencies (or better than several), such as Standart and Poor’s, Moody’s, etc.
Eurobonds are subdivided into long-term securities - eurobonds (eurobonds) and medium-term debt securities - euronotes (euronotes). In addition to this, Eurobonds also include short-term securities - the so-called Eurocommercial bills. But these short-term instruments are usually not included in the concept of Eurobonds.
The difference between Eurobonds and Euronotes is rather arbitrary. They differ only in terms of validity. However, some issues of Eurobonds and Euronotes do not even have these differences. The issue of Eurobonds provides an advantage for both issuers and investors. The issuer usually does not pay any taxes for the issue of Eurobonds. Interest income on bonds is paid to the investor in full, who pays tax under the laws of the country of which he is a resident. Usually Eurobonds are issued in bearer form with tear-off coupons. Repayment is made in a single payment or over a period of time from the repayment fund. In the latter case, the issuer either redeems the bonds on the open market, or conducts periodic redemption runs at par. The following types of Eurobonds can be distinguished.
Fixed Income Bonds(fixed rate bonds). The amount of the coupon income does not change during the entire validity period. These bonds are issued by issuers with high credit ratings (governments, corporations, financial institutions). These bonds account for about 80% of all issued Eurobonds. Some of these bonds are callable.
Variable rate bonds characterized by the fact that the interest income on them changes depending on the state of the financial market. The interest rate on them is tied, for example, to the Libor rate or to the level of yield on US Treasury bills, with some premium to these values. The coupon period for such bonds is usually 3 or 6 months.
Zero coupon bonds characterized by the fact that the investor's income is formed by the difference between the redemption price and the issue price. At the same time, some bonds (growth bonds) are placed at par and redeemed at a price higher than par. For example, Dentsche Bank Finance NK issued ten-year bonds in 1985, which were redeemed in 1995 at a price equal to 287% of par. Deep discount bonds are sold below par and redeemed at par. For example, in 1997 the World Bank issued bonds in Italian lira at 51.7% of par, maturing in 2007 at par.
Convertible Eurobonds characterized by the fact that after a certain period of time they can be exchanged for ordinary shares of the issuing company at a certain rate.
Eurobonds can be issued in different currencies. Until the early 80s. the main currency (up to 80% of all issues) was the US dollar. By now, the share of US dollar denominated Eurobonds has dropped to one third.
Lecture text
INTERNATIONAL SECURITIES. Their main types are the so-called. euro papers and international depositary receipts.
Europaper: euronotes, eurobonds and euro shares. They are issued in any country, denominated in foreign currency and intended for placement outside this country.
Euronotes issued by international corporations for a period of 3 to 6 months. They generate variable interest income based on the LIBOR rate, the offer rate on the London International Money Market. These securities act simultaneously as a form of bank credit and a type of bonded loan. The euronotes market began to develop in the late 70s of the XX century.
Eurobonds have existed since the second half of the 60s. With their appearance, two markets began to function in parallel: the market for traditional foreign loans placed by non-residents in one of the national markets, and the market for Eurobonds placed simultaneously in several international markets. The par and market price of Eurobonds is denominated in foreign currency. They are long-term securities, because the circulation period of their various issues ranges from 7 to 40 years. The main issuers are international corporations, in particular financial institutions, national governments, as well as local authorities.
Investment and commercial banks, as well as banking houses, provide intermediary services for the placement of new issues of Eurobonds. For this purpose, as a rule, a banking consortium is created, which signs an agreement with the issuer, called "underwriting".
In developed countries, there are several types of Eurobonds, namely: ordinary or direct, with a floating interest rate, with a zero coupon, with an indexed interest, convertible, with an option.
The most common bonds are ordinary or straight bonds. A fixed percentage is paid on them. Their rate may change due to changes in bank interest rates.
The rate of floating rate bonds is highly dependent on fluctuations in the market interest rate. With its growth, as a rule, the volume of bond issue also increases, with a decrease - vice versa. The floating interest rate on the bonds is linked to the London Loan Market rate with a premium called "SPREADO".
Bonds with a zero coupon allow you to receive income only when they are redeemed due to the difference in issue and nominal prices. This income is generally not taxed.
The rate on bonds with an indexed interest is tied to the price index for certain groups of strategic goods, in particular, oil, gold, etc.
Convertible bonds generate less income than others, but give the holder the right to exchange them for shares. This happens when the dividend on the shares is significantly higher than the coupon interest.
Option Bonds allow the holder to choose from a variety of investment options. They can be exchanged for stocks, bonds with floating and fixed interest, etc.
Russian Eurobonds(Eurobonds) began to be issued in 1996. They were denominated in US dollars, German marks and brought relatively high income (9-10% per annum), since they were not reliable enough according to the estimates of "Western" investors. The terms of circulation of the first issues were 5-10 years. They were placed with little success in the markets of Asia, Europe and America. The issue of Eurobonds in the country was also carried out by individual constituent entities of the Federation and municipalities, in particular large cities.
Euroshares in terms of issue volume, they are significantly inferior to Eurobonds. This is explained by a number of factors, the main of which are: the limited institution of the international stock exchange and the greater preference of investors for the well-known shares of national companies. Mostly international corporations are the issuers of Euroshares. The resale of these securities also occurs on national stock exchanges, but not all countries allow foreign securities there.
International depositary receipts. These are derivative securities issued on the securities of national enterprises and freely circulating abroad. One of the main reasons for their appearance in the Russian Federation was certain difficulties in terms of speculation by foreign portfolio investors associated with the lack of clear guarantees in the country when re-registering ownership of acquired shares. There are two types of securities of this type - American Depositary Receipts (ADR), denominated in dollars and traded on the US market, and Global Depositary Receipts (GDR), which, in addition to the American one, also circulated on the markets of Western Europe. In the American market, for example, receipts issued for shares of Trading House GUM, NK LUKoil, Inkombank and others were traded. corporations such as RAO "UES of Russia", OJSC "Rostelecom", OJSC "Mosenergo", OJSC "Surgutneftegas" and others. The ADRs issued by Russian corporations allowed their owners to have all the rights of shareholders, incl. receiving dividends, as well as working in the American market in the presence of some objective restrictions.
Workshop plan
1. The history of the emergence of international securities
2. Development trend of the modern world securities market
3. Russian securities in the international financial market: prospects and development problems
Main literature
1. Securities market: Textbook / Ed. By V.А. Galanova, A.I. Basov. - M .: Finance and statistics, 2010. - pp 14.4 "development trends of the modern world securities market". - with. 280
2. Basic course on the securities market: textbook / O.V. Lomtatidze, M.I. Lvov, A.V. Bolotin et al. - M .: KNORUS, 2010. - Chapter 11. “Foreign securities markets”. - p.24
3. Mirkin Y. The Russian securities market: the impact of fundamental factors, forecast and development policy. - M .: Alpina Publisher, 2002. - pp. 5.2. International Finance Centers as a Method of Markets Competition for Retaining and Expanding Trade Activity. - with. 517
additional literature
4. Journal "Finance and Credit"
5. Journal "Voprosy ekonomiki"
Mandatory task
* Question: YIELD ON EUROBONDS OF THE GOVERNMENT OF THE RUSSIAN FEDERATION IN US DOLLARS AT THEIR FIRST PLACEMENT IS ESTABLISHED BASED ON THE CURRENT LEVEL OF YIELD
4. LIBOR BETS
* CALCULATIONS FOR TRANSACTIONS WITH EUROPEAN BONDS OF THE GOVERNMENT OF THE RUSSIAN FEDERATION ARE PERFORMED VIA
1. BANK OF RUSSIA
2. BANK OF ENGLAND
3. US Federal Reserve
4. CLEARSTREAM
5. EUROCLEAR
* THE COUPON RATE WHEN PLACING EUROBONDS IS ESTABLISHED DEPENDING ON
2. DEMAND AND SUPPLY ON THE MARKET OF LOAN CAPITALS
* WHEN THE FIRST EMISSION OF EUROBONDS OF THE GOVERNMENT OF THE RUSSIAN FEDERATION WAS IMPLEMENTED
1. ANOTHER ANSWER
* SPECIFY THE MAXIMUM LEVEL OF CURRENT YIELD OF OVGVZ in 1993-2001
* TO WHAT BOTTOM MARK THE PRICES OF OVGVZ DEPLOYED AFTER THE DEFAULT OF AUG. 1998 (PERCENTAGE OF RATED)
* WHAT IS THE NOMINAL OF OVGVZ
1. 1000 USD
2. 10000 USD
3.100000 USD
4.100000 RUB.
5.1 million RUB.
* WHEN THE ISSUE OF THE FIRST FIVE TRANCHES OF OVGVZ ISSUED
* Question: The laws governing the release of federal state
securities in the Russian Federation are
1. Law on the Securities Market
2. On the state internal debt of the Russian Federation
3. On the features of the issue and circulation of state and
municipal securities
* TO DETERMINE THE APPROXIMATE LEVEL OF YIELD BEFORE RETURNING THE COUPON BOND PURCHASED AT THE RATE OF 110.0. TWO YEARS REMAINING, 10% COUPON RATE
* TO DETERMINE THE APPROXIMATE LEVEL OF YIELD BEFORE RETURNING THE COUPON BONDS PURCHASED AT THE RATE OF 90.0. TWO YEARS REMAINING TO RETURN, 10% ANNUAL COUPON RATE
* WHAT HAPPENS TO THE YIELD OF EUROPEAN BONDS OF THE GOVERNMENT OF THE RUSSIAN FEDERATION IN THE DECREASE OF THEIR RATING BY RATING AGENCIES
1. WILL RISE
2. REDUCED
3. THIS FACTOR WILL NOT AFFECT
* STATE SECURITIES IN THE RUSSIAN FEDERATION ARE
1. BONDS OF THE GOVERNMENT OF THE RUSSIAN FEDERATION
2. BONDS OF SUBJECTS OF THE FEDERATION
3. BONDS OF LOCAL BODIES OF CO-GOVERNANCE
4. BONDS OF STATE UNITARY ENTERPRISES
* IN WHAT COUNTRY THE CONSOLE EXIST
2. FRANCE
4. GERMANY
5. ANOTHER ANSWER
* NON-COMPETITIVE APPLICATIONS AT THE AUCTION FOR THE PLACEMENT OF GKO ARE SATISFIED AT THE PRICE
1.clipping
2.weighted average
3.other option
1.A and higher
2. BBB and above
3. BBB- and above
4. BB- and higher
2.A and higher
3.Ваа3 and higher
4.Ваа1 and above
5.Va and above
* Check the correct statement (s)
1.Yield to OFZ maturity was 5-7% at the beginning of 2006
2. Yield to OFZ maturity was 10-12% at the beginning of 2006
5. OFZ appeared after the 1998 crisis, before that there were only GKOs
* At the beginning of 2008, in the structure of domestic public debt, the first place was accounted for
Additional task
Write an essay on the topic: International securities of Russian issuers.
Topic 5. The securities market and its structure (Western model)
Lecture text
Stocks and bods market is defined as a set of economic relations associated with the issue and circulation of securities between its participants.
Market object security is a security. A security can be bought and sold an unlimited number of times, therefore, in order for the broth to reach its consumer, one needs its own organization of commodity circulation.
The securities market cannot be fully attributed to the financial market, not all securities originate from money capital. The part in which the securities market is based on money as capital is called stock market and is an integral part of the financial market. The stock market forms the majority of the financial market.
The stock market allows you to accumulate temporarily free funds and direct them to the development of promising industries. Fundraising can be carried out from internal and external sources. Internal sources include depreciation and profit. External sources are bank loans and funds received from the issuance of securities.
The structure of the securities market.
The constituent parts of the securities market are based not on this or that type of security, but on the way of trading in this market: primary and secondary; organized and unorganized; exchange and over-the-counter; traditional and computerized; cash and urgent.
Depending on the time and method of entering the securities into the market, it can be divided into primary and secondary.
Primary market- this is the first stage of the process of selling a security; this is the first appearance of a security on the market, where it is sold by its first owners (investors). The obligatory participants in the primary market are issuers of securities and investors. The process of buying and selling can be carried out with or without the help of intermediaries. It is in the primary market that issuers, through the sale of securities, attract investors' funds, which are used to implement the intended commercial goals.
Secondary market- this is the circulation of previously issued securities; it is the aggregate of all assets of purchase and sale or other forms of transfer of a security from one owner to another during the entire life of the security.
Depending on the forms of organization of transactions with securities, an organized and an unorganized market can be distinguished.
Organized market is an auction type market. It is characterized by public open bidding, open competitions between the buyer and the seller with the presence of a mechanism for drawing up bids and offers for sale, which can serve as a basis for concluding transactions. This is the circulation of securities on the basis of firm rules between licensed professional intermediaries - market participants on behalf of other market participants.
Unorganized market- this is the circulation of securities without observing the rules that are uniform for all market participants. Trade takes place spontaneously, in contact between the seller and the buyer. Information about completed transactions is not recorded.
OTC market- this is trading in securities bypassing the stock exchange, the sphere of circulation of securities that are not admitted to quotation on stock exchanges. The OTC market is organized by dealers who may or may not be members of the stock exchange.
Exchange market Is trading in securities on the stock exchange. It is always an organized securities market, trading on it is conducted strictly according to the rules of the exchange and only between exchange intermediaries who are selected from other participants.
Securities can be traded on traditional and computerized markets. In a computerized market, trading is carried out through computer networks that unite the relevant stock intermediaries into a single computer market, which is characterized by:
§ lack of a physical place where sellers and buyers meet;
§ full automation of the trading process for entering their orders for the purchase and sale of securities into the trading system.
Cash securities market Is a market with immediate execution of trades within 1-2 business days.
Derivatives market of securities Is a market where transactions of various types are concluded with a maturity of more than 2 business days. Most often with a due date of 3 months.
The Central Bank market decides the following main goals:
1. There is a redistribution of investments in the Central Bank market. Through it, capital is mainly transferred to the regions that provide the highest profitability due to high profitability.
2. The stock market gives the mass character to the investment process, providing the opportunity to purchase securities. The concentration of securities turnover on stock exchanges and with professional intermediaries accelerates the investment process.
3. The securities market acts as a financial barometer, responsive to changes in the socio-political situation.
4. With the help of securities, a democratic approach to management is implemented. At general meetings of shareholders, decisions are made by voting by the owners of shares on the principle “one share - one vote”.
5. The state and corporations, through stock transactions, carry out the restructuring of the national economy.
6. The state policy is implemented through the securities market. The obvious proof of this is the privatization and corporatization of enterprises in Russia in the 1990s.
The tasks of the securities market are also:
§ formation of infrastructure that meets international standards;
§ development of the secondary securities market;
§ activation of marketing research;
§ transformation of property relations;
§ improvement of the functioning mechanism and control system;
§ reduction of investment risk;
§ formation of portfolio strategies;
§ development of pricing;
§ forecasting promising areas of development.
TO functions of the securities market include the following:
1. Accounting function manifests itself in the compulsory accounting in special lists (registers) of all types of securities circulating on the market, registration of market participants, as well as the fixation of stock transactions executed by contracts of purchase and sale, pledge, trust, conversion, etc.
2. Control function involves monitoring compliance with the law by market participants.
3. Supply and demand balance function means maintaining market equilibrium.
4. Stimulating function is to stimulate the desire of legal entities and individuals to become participants in the securities market.
5. Regulating function consists in the regulation of specific stock transactions by various methods.
As an instrument of government policy, the government securities market performs the following functions:
§ financing the budget deficit of government bodies at different levels, thereby influencing the volume of money supply in circulation and, consequently, expanding or reducing the level of GNP;
§ financing of especially significant projects, government programs, financing of housing construction is widespread;
§ regulation of the volume of money supply in circulation, which is carried out by the bank of the Russian Federation. The purchase of state-owned central banks by it increases the volume of money supply in circulation, while the sale of state-owned central banks, on the contrary, reduces this volume;
§ maintaining the liquidity of the financial and credit system. This is a very important function carried out by the Central Bank, which was rather successfully implemented before the August 1998 crisis through the GKO market;
§ some other, auxiliary functions (implementation of privatization and corporatization of enterprises, restructuring of their capital, debts, etc.).
In the Federal Law "On the Securities Market" of April 22, 1996, the continuity of the norms contained in the "Regulations on the Issue and Circulation of Securities and Stock Exchanges in the RSFSR", in force since the end of 1991, was preserved.
The law regulates the activities of individual professional market participants and market regulation issues; determines the powers of the FC Central Bank of Russia, its regional branches and self-regulatory organizations of professional market participants; regulates the procedure for the issuance and circulation of equity securities (shares, bonds), the operation of stock exchanges, information support of the securities market, advertising requirements, liability for violation of the legislation of the Russian Federation on securities.
The law provides for the procedure for the issue and circulation of securities and defines the types of professional activities with securities. For the first time, the law describes the category of “equity securities” and gives the concept of “disclosure of information on the securities market”. The law also establishes some significant restrictions on activities in the stock market, as well as liability for actions that lead to losses for clients or violate their rights.
State regulation of the securities market.
Regulation of the securities market is the unification of certain methods and techniques into a system that make it possible to streamline the execution of transactions, to subordinate them to the established requirements and rules. This is a mechanism for maintaining a balance of mutual interests of all market participants who follow certain rules of the game.
In the primary securities market, government regulation is focused on maintaining a unified procedure for issuing (issuing) securities into circulation through registration.
In the secondary market, control over circulation is carried out through licensing of professional market participants (issuance of qualification certificates giving the right to conduct transactions with securities) and investment institutions, as well as through the mechanism of taxation of transactions (transactions) with securities.
Methods for regulating the securities market:
§ legal regulation;
§ registration of issues, emission projects;
§ licensing of market entities;
§ certification of specialists of investment institutions;
§ investor insurance;
§ constant informing of investors;
§ supervision and inspection of stock transactions;
§ registration and supervision of the activities of participants in the securities market;
§ control over compliance with the current legislation;
§ consulting.
Primary securities market- this is the place where the initial issue and initial placement of securities takes place.
TO primary market objectives relate:
§ attraction of temporarily free cash resources;
§ activation of the financial market;
§ reduction of the inflation rate.
Primary securities market performs the following functions:
§ organization of the issue of securities;
§ placement of securities;
§ accounting of securities;
§ maintaining a balance of supply and demand;
§ transformation of property relations.
The main subjects of the primary securities market are issuers and investors. Active participants in this market are investment funds and financial companies, as well as various intermediaries (firms, representative offices, agencies, branches engaged in the purchase and sale of corporate securities). Commercial banks are actively working in the primary market.
On the primary market, the issue (issue), initial placement of securities, determination of their market value, assessment of the investment market, state registration of the issue, registration of a report on the results of the issue of equity securities, appointment of a registrar, storage of securities are carried out. In accordance with the current standards, the issuer is a commercial organization that has made a decision on the issue and carries out or has carried out the placement of securities. The issuer prepares a prospectus.
In accordance with the Decree of the President of the Russian Federation "On measures for state regulation of the securities market in the Russian Federation", the following are allowed for public offering on the primary market:
§ government securities;
§ registered shares of joint stock companies;
§ options on securities, warrants (i.e. derivative securities);
§ bonds, including bonds issued by government and local authorities;
§ housing certificates;
§ other securities, the circulation of which is permitted in accordance with federal laws and international treaties of the Russian Federation.
One of the distinguishing features of the structure of the domestic stock market is the significant predominance of transactions with government securities. In addition, it is quite typical that the bulk of securities only go through the initial placement stage, almost not circulating in the secondary market.
Issue (issue) of securities.
The emission of securities is carried out when establishing joint-stock companies, increasing the size of their initial authorized capital by issuing shares, attracting borrowed capital by legal entities, state bodies or local authorities by issuing bonds and other debt obligations. The issue of securities includes the determination of the size of the issue, the preparation and publication of the issue prospectus, registration of the issue, the printing of forms of securities; publication of a release announcement. The size of the issue of shares is determined by the size of the authorized capital of the joint-stock company and its increment. The number of issued shares is calculated by dividing the amount of the authorized capital or its increment by the nominal price of the security. The size of the issue of debt obligations is calculated by dividing the loan amount by the face value of the bond, certificate or financial bill.
On the secondary securities market, the majority of transactions with securities are carried out (with the exception of the initial issue and initial placement).
Aftermarket target- to provide real conditions for buying, selling and carrying out other operations with securities after their initial placement.
The tasks of the secondary securities market are:
§ increasing the financial activity of business entities and individuals;
§ development of new forms of financial practice;
§ improving the regulatory framework;
§ infrastructure development;
§ compliance with accepted rules and standards.
The features of the secondary market include a wide variety of investment opportunities, qualities and characteristics of traded securities, dependence on a number of subjective and objective factors.
The main task of the secondary market of the Central Bank is the redistribution of capital to the most efficient production facilities and attraction of investments for the development of enterprises.
The secondary market includes an organized and unorganized (over-the-counter) market. The main participants in the secondary market are the state, joint stock companies, specialists - professional participants in the securities market, investment funds and companies, commercial banks, stock centers and shops, and other business entities and citizens.
By types of securities, the secondary market is divided into markets for stocks, bonds, warrants, mortgages, derivative securities. The circulation of securities on the secondary market is mainly the resale of securities. Most of the purchase and sale transactions are made through intermediaries, brokers, investment dealers, traders (representatives of firms in the trading area of the exchange) at the market price (rate).
The modern activation of the secondary market is primarily associated with additional issues as one of the ways to attract investment resources to joint stock companies and their restructuring.
Shares of privatized enterprises are widely represented on the secondary securities market in Russia. On the exchange market, a small part of the shares of individual enterprises that are among the most attractive for investments, such as the shares of RAO Gazprom, are traded on the exchange market. There are about 100 such enterprises. The OTC Russian Trading System (RTS) covered the shares of about 300 other enterprises. The rest of the shares do not participate in the aforementioned active market operations and are only partially involved in operations on the secondary securities market in certain regions. This part of the shares is very significant in terms of specific weight and can account for more than 95% of the shares circulating on the secondary stock market of Russia. The problem of involving this part of shares in active stock transactions is associated with the lack of interest of their owners, their poor awareness, and sometimes the lack of necessary knowledge on specific issues of the development of the securities market.
Workshop plan
1. The essence and functions of the securities market, its role in the creation and functioning of the investment mechanism.
2. The concept of the primary securities market. Objectives of operations in the primary market.
3. Underwriting.
4. Secondary securities market, its structure and participants.
5. Regulatory framework for the issue and circulation of securities.
7. Types of professional activities in the securities market.
Main literature
1. Securities market: Textbook / Ed. By V.А. Galanova, A.I. Basov. - M .: Finance and Statistics, 2010. - Chapter 10 "Issuers and Investors". - with. 205
2. Basic course on the securities market: textbook / O.V. Lomtatidze, M.I. Lvov, A.V. Bolotin et al. - M .: KNORUS, 2010. - Chapter 2. “Professional participants of the securities market”. - p. 42
3. Mirkin Y. The Russian securities market: the impact of fundamental factors, forecast and development policy. - M .: Alpina Publisher, 2002. - pp. 2.1. Political and socio-economic choice of society: scenarios for the development of the stock market ”. - with. 176.
additional literature
1. Commentary on part one of the Civil Code of the Russian Federation.
3. Dolan, E. Money, banking and monetary policy. Per. from English V. Lukashevich and others / E. Dolan - SPb., 1994 .-- 496 p.
4. Journal "Finance and Credit"
5. Journal "Voprosy ekonomiki"
6.http: //www.fcsm.ru - Federal Service for Financial Markets
7.http: //fcsm.ru/blog/ - Official blog of the head
Federal Service for Financial Markets
8.http: //www.openinfo.ffms.ru/ - FFMS website for information disclosure
9.http: //fingramota.org - Expert Group on Financial Education under the Federal Service for Financial Markets
10.http: //mfc-moscow.com/ - site dedicated to the creation of an international financial center in Moscow
http://www.naufor.ru - National Association of Stock Market Participants (NAUFOR)
http://www.auver.ru/ - Association of Bill Market Participants (AUVER)
Investor's ABC - RBC TV Channel program
Mandatory task
Solve 3 problems and formulate condition 1 of the problem using real data.
A joint-stock company with an authorized capital of 2 million rubles, consisting of 100,000 ordinary shares, carries out an additional issue of shares. The market value of the shares is 10 rubles. The nominal value of additional shares is 2 million rubles. To organize the issue, an underwriter was engaged, who undertakes to buy out the entire issue of shares. The underwriting fee is set as high as possible (within the law). Calculate the amount of remuneration for the underwriter
The joint-stock company has placed 50,000 shares with a par value of 100 rubles upon establishment. The charter contains 10,000 authorized shares with a par value of 1,000 rubles. On the secondary market, shares are sold at a price of 1200 rubles. Calculate the amount of the authorized capital of the company and its market value
The investor bought the bond at a price of 1010 rubles and sold it two years later for 995 rubles. Over a two-year period, he received coupon payments in the amount of 300 rubles. What profitability for the period and per year he received. Determine the annual rate of return on the basis of compound interest.
Determine the market price (in dollars) of a coupon bond issued in 1980, if at the time of issue a fixed coupon rate was set at 10%, interest on the bond is paid once a year, and at the time of sale, the yield to maturity of bonds with a similar rating was eight%. The face value of the bond is $ 1,000. The bond is sold the next day after the next coupon yield is paid, and two years remain until the bond matures. Under the terms of the issue, the bond is redeemed with a 10% premium.
The net profit of Pioneer JSC amounted to 1,000,000 rubles. Shares of this company (4,000 of them were issued) are sold on the market at a price of 2,000 rubles per share. Calculate your earnings per share (EPS) ratio and p / e ratio.
Calculate what is more profitable, buy 1000 bonds with a face value of 1000 rubles with a maturity of 1 year and a coupon rate of 20% (paid 2 times a year) at a price of 112%, or put 1 mln. rub. to the bank for the same period with an interest rate on the deposit of 19% and interest accrued once a year? The possibility of reinvesting the interest on the bond at the bank interest rate is envisaged. Taxation is not taken into account. Indicate the amount of profitability of a more profitable instrument with an accuracy of hundredths.
The investor purchased a bond with a par value of 5,000 rubles at a price of 90% with a maturity of 3 years and a coupon rate of 30% (payable once a year) and intends to keep it in the portfolio until maturity. How much income will this investor receive from owning the bond? Excluding reinvestment of interest and taking into account reinvestment at the same interest rate.
The current share price is 150 rubles. The strike price of the put option is RUB 160. The option premium is RUB 11 per share. Calculate the intrinsic and time value of an option
The capital of the joint-stock company consists of 8,000 ordinary and the maximum possible number of preferred shares with a par value of 100 rubles. The dividend on preferred shares is set at 7 rubles per share. At the end of the financial year, the company's net profit amounted to 500,000 rubles. Calculate Earnings Per Share (EPS)
On April 1, 6,000 investment shares of the Raduga mutual investment fund were in circulation, the net asset value of which was 900,000 rubles. The net asset value of the Groza mutual investment fund as of that date was 850,000 rubles, and there were 4,020 shares in circulation. The amount of the premium (discount) in the first fund is 2%, and in the second - 1.8%. A month later, the value of the net assets of these funds turned out to be the same and amounted to 1,000,000 rubles each. Calculate, investments in which fund provided the highest return for the specified period?
Additional task
Write an essay on the topic: "Scenarios for the development of the Russian securities market"
According to the well-established terminology international securities- these are securities placed on international financial markets external to the country of the issuer of these securities.
The process of integration of countries with market economies taking place in the world requires the creation of a common financial market for an effective investment policy. A great deal of experience has already been accumulated in the implementation of international investment projects. Securities issued by banks and corporations of some countries for distribution η to other countries are traded in large volumes on the international securities market. Complete abolition in the 1970s. restrictions on the movement of capital to developed countries created conditions for the formation of an international securities market. In just 10 years (1980–1990), the share of international securities transactions in the US GDP increased from 9 to 93%, in Germany - from 8 to 58, and in Japan - from 7 to 119%. In the total volume of funds borrowed on the international capital market, the largest part falls on bonds (in 1994 - more than 60%). Almost 40% of the world securities market is in the USA, in Japan - over 20%.
The world financial market is increasingly acquiring the form of a two-tier system, in which the upper level - the supranational one - is represented by the circulation of securities of leading transnational corporations, and the lower - national - by the circulation of securities of national companies. Each of these levels is characterized by the corresponding institutions of the financial market - international or national.
The international securities market, like the national markets, consists of primary and secondary markets. On primary market the issuer of one country places its securities in another country or other countries, and on the secondary market the securities are resold through special financial institutions. The main buyers and sellers in secondary market securities are central and commercial banks, insurance companies and other non-banking institutions.
In the last decade, the attractiveness of the Eurobond market has increased. European instruments are stocks, notes, bonds, derivative securities (derivatives) placed on international financial markets external to the issuer's country.
Eurobonds are issued by governments of countries, municipalities, banks, international credit organizations, transnational corporations. Foreign loans in the form of Eurobonds are actively used by them as an additional source of financing, especially in the face of limited monetary resources in developing countries with a credit rating of "BB" (Mexico, Brazil, Argentina, Venezuela, a number of Eastern European countries, Russia). There was even a special type of bond - PAR-
Bonds , which are exchanged for the corresponding debts of the countries at par. These bonds correspond to a set of fixed coupon payments, the rates for which are often below market rates. These bonds are also called brady bonds but named after the US Treasury Secretary, who proposed such a method of debt restructuring, when in the late 1980s - early 1990s. international financial institutions are faced with the problem of non-repayment of large credit funds by developing countries. PAR -bonds are issued for a period of 25 to 30 years, which provides issuers with a preferential procedure for repayment of debt obligations.
Eurobonds are predominantly bearer securities, i.e. their owners are not registered. These bonds are issued and sold primarily outside the domestic market of the currency in which their denomination is indicated. At the same time, Eurobonds are denominated in currencies that occupy a leading position in international trade.
Wanting to receive significant additional funds through the issue of bonds, a large borrower has the opportunity to enter the international market. In the external market, the issue of bonds can be divided into a foreign issue and an issue of Eurobonds. Foreign bonds are issued by a non-resident in any country in the currency of that country, in other words, a foreign issue is placed in London in pounds sterling, in Tokyo in yen, etc. Eurobonds are placed on several national markets, but in a currency that is foreign in relation to the country of their placement.
The following main types of securities are traded on the European market:
- - bonds with a fixed rate of return (coupon payments);
- - bonds with a floating rate of return. The amount of coupon payments consists of two parts - the value of the most commonly used rate (for example, LIBOR ), plus a fixed positive margin that remains unchanged. The terms of circulation of such bonds are from 5 to 15 years;
- - two types of bonds associated with the issuer's shares - convertible into ordinary shares of the issuer on pre-agreed terms and bonds with warrants. A warrant is similar to a call option, but can be exercised over a longer period, which makes bonds more attractive.
The first Eurobonds appeared in the early 1960s. in connection with the internationalization of economic life and the liberalization of the financial markets of the USA, Germany and Japan.
In 1987-1991 the largest share of borrowings on the European market was observed from Japanese issuers (banks and industrial corporations). In 1995-1996 Governments of Eastern European countries and administrations of the largest cities of these countries entered the Eurobond market. Russia first placed its own Eurobonds in November 1996. Then in 1997-1998. The Russian government has placed several more loans. In the same years, a number of subjects of the Russian Federation entered the Eurobond market of the government: Moscow, St. Petersburg, Nizhny Novgorod, Sverdlovsk regions, Tatarstan, as well as private issuers. At present, professional participants in the Eurobond market are represented mainly by large banks and securities companies.
Among debt securities on the European market are widespread euro debt obligations (euronotes ). These medium-term securities account for 50-60% of new issues. Liabilities denominated in US currency account for about half of the market, in German marks - 15% and Japanese yen - 10%. In addition, currencies such as Argentine pesos, Polish zlotys, Croatian kunas and Russian rubles have appeared, and since 1999 Eurobonds with a denomination in euros have been issued.
On the euro market there are short-term debt obligations with maturities from one to six months. Each issue is underwritten, syndicated and hosted. If the borrower fails to place the next issue of debt obligations, the members of the syndicate undertake to redeem the remaining unplaced securities at a price not lower than the announced (rate LIBOR plus margin).
A relatively new instrument on the European market - commercial obligations, the peculiarity of which is that they do not go through underwriting. Banks - members of the syndicate undertake obligations to place the borrower's securities on agreed terms, but do not undertake to buy back the under-placed obligations.
The term of circulation of commercial obligations on the European market is from several months to several years. Unlike similar securities in the United States, Eurocommercial obligations are issued for a longer period (in the US domestic market, their circulation period is 60-180 days). In addition, the issuers of these securities must go through the rating procedure, which explains the relative decline in the share of these securities on the European market in the 1990s. and increased investor interest in medium-term debt.
A significant role in the Eurobond market is played by euro deposit certificates (DS), intended mainly for large institutional investors. The main issuers of DS are branches of leading American, British, Canadian, Japanese and European banks. DS are issued for a period of three to six months and have a fixed interest rate. There are DCs with longer maturities and floating interest rates.
On January 1, 1999, the third stage of the formation of the European Economic and Monetary Union began ( ESVS ). With the introduction of the single euro currency in 11 countries of Europe, a new monetary and financial union - the eurozone - emerged, where 11 capital markets of these countries were transformed into a united internal capital market of the European Union.
As a result, there have been important changes in the structure and trends of the market development, the behavior of investors and borrowers in the Eurozone. Insurance and investment companies, private pension funds and banks, which traditionally prefer reliable government securities, turned their attention to more profitable private corporate securities and new instruments of the secondary debt market. In turn, borrowers, seeking to expand the liquid base, are increasingly resorting to issuing bonds and various derivative securities. First of all, this applies to companies and mortgage banks that have reliable collateral.
The introduction of a single currency unit, the euro, and the creation of a stable situation led to the existence of prerequisites for accelerating the development of the corporate bond market. The volume of issues not only of high-rated corporate bonds increased, but also of high-yield securities with a lower rating. The market has a fairly high demand for this kind of bonds.
The transition of the EU countries to a single currency - the euro, which since January 1, 1999, acquired the status of the official monetary unit of 11 countries, and their own currencies became its fractional expressions - had a serious impact on the development of the Eurobond market.
Modern Russia is a fairly active participant in the international securities market.
In particular, after a two-year hiatus in 2012, a large volume of Russian currency Eurobonds was placed, differentiated in terms of maturity and beneficial for issuers, which created the preconditions for active entry into the global market of Russian corporate borrowers.
The former unit of account of the EU - ECU was replaced by the euro in a 1: 1 ratio, then after the necessary preparatory period from January 1, 2002, the euro became a cash currency, and from July 1, 2002, after the exchange of old banknotes for new ones, it became the only one. currency of your zone.
Currently, the following types of securities are traded on the corporate securities market:
1. Shares of companies and enterprises, credit and financial institutions.
2. Bonds of companies and enterprises, banks, which are designed to borrow additional funds to finance targeted projects.
3. Bills of organizations and credit and financial institutions.
4. Savings certificates; certificates of deposit.
Shares and bonds can be issued in documentary and non-documentary form. Types of shares: registered, bearer, ordinary, preferred.
In accordance with the Law “On the Securities Market” No. 39-FZ dated 22.04.96.
A share is an equity security securing the rights of its owner to receive part of the profit of a joint-stock company in the form of dividends, to participate in the management of the joint-stock company and to a part of the property remaining after its liquidation.
A bond is an issue-grade security securing the right of its holder to receive a bond from the issuer within the period stipulated by it of its par value and the percentage of this value or other property equivalent fixed in it. Shares and bonds can be issued in documentary and non-documentary form. Types of shares: registered, bearer, ordinary, preferred.
A bill of exchange is a security that certifies the unconditional obligation of the drawer (promissory note) or another payer (bill of exchange) specified in the bill of exchange to pay a certain amount to the bill holder at the onset of the deadline provided for by the bill. A bill of exchange can only be issued in documentary form.
Certificates of deposit and savings certificates are securities that are written certificates of the bank about the deposit of funds, certifying the owner's right to receive the deposit amount and interest on it in any institution of the bank in due time.
Savings certificates are issued to depositors - citizens, and deposit certificates - to legal entities.
Currently, of all the instruments of the corporate securities market, the share market is the most developed. Shares, depending on their issuer, are subdivided into “first tier” shares and “second tier” shares.
24. International securities: types and characteristics of circulation
The globalization of the world economy has led to the emergence of ICBs. The most common ICBs are Eurobonds and ADRs, which include Eurobonds, Euro-notes, Euro-bills and Euro-shares.
Eurobonds- international long-term securities issued by borrowers (international organizations, governments, trans-national companies (TNCs)) to obtain a long-term loan in the global financial market. They have coupons that give the right to receive interest in due time. They are issued, as a rule, for a period of 2-15 years. But they can also be issued for a period of up to 40 years.
Eurobonds are:
1. Regular (or direct) with a fixed or floating rate.
2. With an indexed interest. The interest rate is pegged to the price index for gold, platinum, oil and gas.
3. Convertible. Can be exchanged for other bonds, usually with a lower yield.
4. Bonds with an option. Can be exchanged in the future for shares or other securities. e. Bonds with zero coupon (discount). The initial price is 30-40% of the face value.
5. Hybrid. A mixture of the first four types.
Eurobonds:
· Are bearer, can be placed on the markets of several countries;
· The loan currency is foreign for the issuer and the investor;
· Placement and collateral is usually carried out by an emission syndicate, which includes banks, investment companies, brokerage companies of several countries;
· The par value has a dollar equivalent;
· Interest on coupons is paid to the holder without tax deduction (unlike ordinary bonds).
Euronotes- short-term and medium-term registered bonds of the Eurobond market. Notes- these are debt obligations that, as a rule, have a floating coupon rate. Issued for 1-3 years with a bank guarantee. The differences between Eurobonds and Euronotes are gradually disappearing.
Commercial euro bills- short-term transferable debt obligations. To issue them, the issuer needs to agree on a program of action with one or more dealers. For a major program, the firm must have three reputable dealers.
The advantages of commercial Euro bills are great flexibility. Interest rates are largely determined by the market. A firm issuing Euro bills is not required to receive a formal rating. The cost of programs for Eurobills is lower than for other Eurobonds.
Euroshares- shares of TNK, large banks, investment companies.
Eurobonds- bearer Eurobonds.
American IOUs (ADRs)- freely tradable receipts for foreign shares deposited with US banks.
Eurobonds and Euro bills are attractive borrowing instruments for Russian companies and the Government of the Russian Federation. The largest Russian companies prefer to issue Eurobonds rather than Russian bonds due to the much lower interest rates on them and the stability of the RZB's development.
Reasons for the growth of international central banks:
· Diversification of funding sources (alternative to banks' credit lines).
· Less regulation of this market, as a result - lower costs, gain in time, no restrictions on the direction of use.
· Flexibility and variety of tools used.
Price advantage over the national currency of borrowing.
Complete abolition in the 70s. 20c. restrictions on the movement of capital in developed countries created conditions for the formation of an international securities market. In just 10 years (1980-1990), the share of international securities transactions in the US GDP increased from 9 to 93%, in Germany from 8 to 58, in Japan - from 7 to 119%. In the total volume, the largest part falls on bonds (in 1994 - more than 60%). Almost 40% of the world securities market is in the USA, in Japan - over 20%.
A distinctive feature of the international market is the trade in securities between residents of different countries, as well as stock values with denominations denominated in currencies other than the national one. Export of capital is a characteristic feature and objective necessity of a developed market economy. The formation of the international securities market was accelerated by: the modern scientific and technological revolution; development of integration processes; a certain stability of exchange rates; the introduction of common multinational currencies; success in the development of banking and stock exchange; strengthening the activity of transnational corporations and financial institutions.
International securities as a term appeared to denote international securities that circulate in many countries at the same time. International securities include the so-called Eurobonds and international depositary receipts (previous chapter).
The Eurobond market is one of the most voluminous markets for international securities. It accounts for more than 75% of the total volume of the entire securities market.
Europaper: euronotes, eurobonds and euro shares ... They are issued in any country, denominated in foreign currency and intended for placement outside this country.
There is an official definition of Eurobonds, which is given in the Directive of the Commission of the European Communities of March 17, 1989, regulating the procedure for offering new emissions on the European market.
In accordance with this Directive Eurobonds are tradable securities with the following characteristic features, namely:
Underwritten and placed through a syndicate, at least two members of which are registered in different states;
Offered in significant volumes in one or more countries, except for the country of registration of the issuer;
Can be initially purchased only through the intermediary of a credit institution or other financial institution.
Euronotes- medium-term registered bonds, which are usually issued for a specific investor. The main advantage of euronotes is the ability to organize their issue in a few days or even hours. Issued by international corporations for a period of 3 to 6 months. They generate variable interest income based on the LIBOR rate, the offer rate on the London International Money Market. These securities act simultaneously as a form of bank credit and a type of bonded loan. The euronotes market began to develop in the late 70s of the XX century.
Eurobills- unsecured liabilities that are not intended for public offering and are not traded on the secondary market. As a rule, Eurobills are issued for a period of one to five years by companies whose solvency is beyond doubt.
Eurobonds have existed since the second half of the 60s. With their appearance, two markets began to function in parallel: the market for traditional foreign loans placed by non-residents in one of the national markets, and the market for Eurobonds placed simultaneously in several international markets. The par and market price of Eurobonds is denominated in foreign currency. They are long-term securities, because the circulation period of their various issues ranges from 7 to 40 years. The main issuers are international corporations, in particular financial institutions, national governments, as well as local authorities.
Investment and commercial banks, as well as banking houses, provide intermediary services for the placement of new issues of Eurobonds. For this purpose, as a rule, a banking consortium is created, which signs an agreement with the issuer, called "underwriting".
In developed countries, there are several types of Eurobonds, namely: ordinary or straight, , with zero coupon, with indexed interest, convertible, with option.
Most common ordinary or straight bonds. A fixed percentage is paid on them. Their rate may change due to changes in bank interest rates.
Bond rate floating rate highly dependent on fluctuations in market interest. With its growth, as a rule, the volume of bond issue also increases, with a decrease - vice versa. The floating interest rate on the bonds is linked to the London Loan Market rate with a premium called "SPREADO".
Bonds with zero coupon allow you to receive income only when they are redeemed due to the difference in issue and nominal prices. This income is generally not taxed.
Bond rate with indexed interest is tied to the price index for certain groups of strategic goods, in particular oil, gold, etc.
Convertible bonds generate less income than others, but give the holder the right to exchange them for shares. This happens when the dividend on the shares is significantly higher than the coupon interest.
Bonds with option allow the owner to choose different options for an investment transaction. They can be exchanged for stocks, bonds with floating and fixed interest, etc.
It is necessary to distinguish between Eurobonds and bonds that are issued on national capital markets (domestic issues). These are two different things. Domestic bond issue is carried out by an investor who is a resident of the country of issue. Such a bond issue is carried out in the currency of that country and is placed in the country of issue. It can be placed in a foreign country, but in the currency of the issuer's country, in addition, most of it will still be placed in the issuer's country.
Russian Eurobonds(Eurobonds) began to be issued in 1996. They were denominated in US dollars, German marks and brought relatively high income (9-10% per annum), since they were not reliable enough according to the estimates of "Western" investors. The terms of circulation of the first issues were 5-10 years. They were placed with little success in the markets of Asia, Europe and America. The issue of Eurobonds in the country was also carried out by individual constituent entities of the Federation and municipalities, in particular large cities.
Euroshares in terms of issue volume, they are significantly inferior to Eurobonds. This is explained by a number of factors, the main of which are: the limited institution of the international stock exchange and the greater preference of investors for the well-known shares of national companies. Mostly international corporations are the issuers of Euroshares. The resale of these securities also occurs on national stock exchanges, but not all countries allow foreign securities there.
The structure and dynamics of the development of the world securities market can be viewed using the table.
Almost half - 46% of debt securities and stocks are in the USA, 15% is concentrated in Japan, 6% - in Germany and Great Britain, 4% - in France, and, finally, 4% falls on all other countries. Thus, the undisputed leader - the United States of America - immediately becomes visible. The dynamics of the market development is positive: in January 1999 there were $ 52.3 trillion in debt securities and shares worldwide, and already in January 2001 - $ 72 trillion.
Table. The structure of the world market for debt securities and shares
