Indian Financial Market - Debt

Indian stock market:

Debt:

“Debt” means debentures, the volume of the trade in debt market is very high value when compare to equity market in term of amount.

Debt are low risk with low volatilizes.

Debt instruments are contract between two people (I.e. lender and borrower)

One party lends money to another one pre-determined in terms of rate of interest to be paid by borrowers to lender, tenure of the people repayment and interest payment periodically.

In the Indian security markets, generally all use the terms as “bond” for debt instrument issued by central or state government and public sector organization and the term “debentures “for instrument issued by private corporate sector.

Features of bond:

Maturity, coupon and principal

In the market, maturity and term-to-maturity are used quite frequency.

Maturity:
Maturity of a bond refers to the date on which the bond matures, or the date on which the borrowers has agreed to repay the principal amount to the lender.

Term to maturity:
Term to maturity refers to the number of the years remains for the bond to mature.

Coupon:
Coupon rate refers to the periodic issue of payment that are made by the borrower to the lender a coupons are stated upfront either directly specifying the number (I.e. 18%) or indirectly tying with the benchmark rate.

Indian Financial Market - Equity

Indian stock market:

Equity:

Most of the people aware about the equity market in India (I.e. equity index like BSE, NSE) that the transaction happens on a daily basis with high volume and having high fluctuation in mean time return from equity market seem high returns over a period of long term.

Nowadays reach of equity market among population is very fast via media and the awareness of stock market reached across small towns in India.

India expecting very good growth rate in internet service providers for next five years, if it is so, all the villages will be connected via internet, then the transaction in equity will be reach with high volume.

The world before money

Why did the barter system develop?

James and Jones were brothers who were very excited because their uncle was coming for dinner. He always brought gifts for them and this time he gave James two bars of milk chocolate, while Jones got two packets of chips. After he had left, James said, “Jones I will give you one bar of chocolate if you will give me a packet of chips in return, “James agreed, and soon both the boys were having a feast of a bar of chocolate each, followed by packets of chips each, without having to pay anything. James did not have to buy any chips, and Jones did not have to buy any chocolate. Now, wasn’t that smart of them???

This system of exchanging goods is known as the barter system. Long before our ancestors invested money, they used the barter system o get what they needed. A farmer would exchange bundles of rice for a cow that another farmer had. In this way, both the farmers would have all the rice and milk they needed, without any money having changed hands. A hunter might exchange animal skins for the fish that a fisherman had, or a weaver might exchange cloth for bread from a baker. It was all a matter of giving away whatever extra you had, in return for something you needed.