government which include public sector undertaking bonds capital gains bonds

Government which include public sector undertaking

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government which include public sector undertaking bonds, capital gains bonds, zero coupon bonds, emerging markets bonds, tax-savings bonds, etc. Companies also issue bonds known as corporate O n May 1 st 2015, Preeti Jaiswal (Preeti) was promoted as Junior Software Engineer at Brilliant Software Solutions Pvt. Ltd., located in Bangalore, India. Preeti had always been very enthusiastic, jubilant and inquisitive by nature. However, she had a mediocre academic track record. Interestingly, she fared very well in extracurricular activities, especially in sports. Realising her potential in sports, her badminton coach at school encouraged her to pursue sports. Due to her dedication and perseverance, she was successful in streamlining her high energy levels productively and made a mark in various national and international badminton competitions. Though her parents were quite happy with her sports track record, they were still very anxious about her low grades in academics. As she was gearing up to give engineering entrance exams, her parents were apprehensive about her ranks too. However, when the entrance results were announced, their happiness was boundless as she could gain admission into one of the premier engineering institutions in India through sports quota. After joining the institution, Preeti successfully completed her four years of under graduation course and gained placement with Brilliant Software FIN-2-0009 | June 3 rd 2015 © '2127&23<
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2 | Caselet © Bond Valuation: Preeti Jaiswal’s Dilemmas FIN-2-0009 bonds to finance operations, to fund a new project, etc. In 2014, for the first time in more than a decade, Foreign Institutional Investors (FIIs) evinced higher interest in Indian bond markets rather than equity markets at a time when stock markets were on a rise (Exhibit I). FIIs invested around $26 billion in Indian bonds vis-à-vis $16 billion in equities. 1 This was the first ever instance during the bull phase that the bond market investments surpassed the equity markets. Indian bond markets are one of the highest yielding markets in the world. According to Bloomberg, Indian rupee bonds had highest carry-trade returns among emerging markets at around 8.09% 2 , next only to Argentina. The Indian bond market had the second highest representation by outstanding par amount in the S&P Pan Asia Bond Index, with nearly 12.8% as of January 30 th 2015 (Exhibit II).
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