Topics

S.No Description

1 Introduction

2 Decrease in Interest Rate

3 Increase in Interest Rate

4 Major Investments

5 Factors attracting Investors towards Bank

6 Factors attracting Investors towards Debt market

7 Preferred Investments

8 Base Rate Behavior 2010 - 2013

9 Correlation between Interest Rates and Bonds

10 Investments Patterns in Past

11 Investors Options in Recent times

12 Role of Media

13 Summary

14 References

Introduction

Investment

Need For Investment

Major Factor

IncomeExpenses Savings

OR

Invest

Need For Investment

Future

Expenses

Un-expected events

Expected events

Inflation

Consider me :- INTEREST RATE

Major Factor

Attract Loan Takers

Promote Economy Control Inflation

Govt. Debts

Attract Depositors

Decrease in the Interest Rate Increase in the Interest Rate

When

Major Investments

Bank Market

TermDeposits Loans Debt

Funds Gold ETF

Factors attracting Investors Towards Bank Products

Reputation of Bank

Trustable -Track Record

Low Loan Interest

Rate

High Interest

Rate - TD

Cross Selling

Base Rate Behavior 2010 - 2013

source : www.rbi.org.in

Inte

rest

Rat

e

Year and Month

Factors attracting Investors Towards Debt Market

Gilt

Edged

Liquidity

Low

VolatilityIndex Linked Bonds

Diversifi-cation

Preferred Investment based on Tenure

Correlation between Interest Rate and Bond Prices

RBI Increase in Rate Attracts FD Bond Prices Fall

Sell BondInvest in FD

RBI Decrease in Rate

Fall in FD Interest Rate

Demand for Bond Increases

Withdraw DepositsBuy Bonds

source : businesstoday.intoday.in

Interest rates and Bond prices share an Inverse relationship

Example

XYZ Corporation issues- Bond ,face value of Rs 100 ,Coupon Rate 6%.

Increase in Interest Rate : Secondary market Face Value Rs 99. Yield will be (Rs 6/Rs 99)X100 =6.06 %.

Decrease in Interest Rate : Secondary market Face Value Rs 101. Yield will be (Rs 6/Rs 101)X100 =5.94 %.

Sep 25th, 2013

Inte

rest

Rat

e

Year and Month

Investments in 2011Investments in 2012Investments in 2013

http://www.phdcci.i

n/

source

business-standard.com

source

RBI

Annual

Report

Based on interest rates:

Inte

rest

Rat

ePe

rcen

tage

of

Inve

stm

ent

Investments in

Year and Month

Investments in 2011

Investments in 2012

Investments in 2013

Perc

enta

ge o

f Inv

estm

ent

Perc

enta

ge o

f Inv

estm

ent

Perc

enta

ge o

f Inv

estm

ent

Investments in

Investments in

Investments in

source : indiabudget.nic.in

Smart Investors always keeps an eye on Daily News Update

Banks cut rates on consumer loans to get funds from government

Banks should show real yield on fixed deposits

Oct 21, 2013 Oct 22, 2013

Oct 28 , 2013- ET Wealth

Summary

Why we need to Invest ?

Which was the most Preferred Investment Tenure ?

What were the Regular Investment Patterns?

Where did they Invest when there is Increase in Interest Rate ?

When did they Invest in Bonds ?

How changes in interest rate impacts Bond Prices ?

Who are the better Investor?

6 W & 1 H

http://rbi.org.in/rbi-sourcefiles/lendingrate/LendingRates.aspx#

http://www.phdcci.in/media_center_details.php?id=329

http://www.hdfcbank.com

http://indiabudget.nic.in

http://www.business-standard.com/article/pf/risk-free-returns-aren-t-enough-113091500695_1.html

http://businesstoday.intoday.in/story/invest-debt-funds-stock-market-volatility/1/20330.html

http://capitalmind.in

http://www.moneycontrol.com

References

QueriesAnswered

Thanks a lot !!