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Topics S.No Description 1Introduction 2Decrease in Interest Rate 3Increase in Interest Rate 4Major Investments 5Factors attracting Investors towards Bank.

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Presentation on theme: "Topics S.No Description 1Introduction 2Decrease in Interest Rate 3Increase in Interest Rate 4Major Investments 5Factors attracting Investors towards Bank."— Presentation transcript:

1 Topics S.No Description 1Introduction 2Decrease in Interest Rate 3Increase in Interest Rate 4Major Investments 5Factors attracting Investors towards Bank 6Factors attracting Investors towards Debt market 7Preferred Investments 8Base Rate Behavior Correlation between Interest Rates and Bonds 10Investments Patterns in Past 11Investors Options in Recent times 12Role of Media 13Summary 14References

2 Introduction Investment Need For Investment Major Factor Income Expenses Savings OR Invest

3 Need For Investment Future Expenses Un- expected events Expected events Inflation Consider me :- INTEREST RATE INTEREST RATE Major Factor

4 Attract Loan Takers Promote Economy Control Inflation Govt. Debts Attract Depositors Decrease in the Interest RateIncrease in the Interest Rate When

5 Major Investments Bank Market Term Deposits Term Deposits Loans Loans Debt Funds Debt Funds Gold ETF Gold ETF

6 Factors attracting Investors Towards Bank Products Reputation of Bank Trustable -Track Record Reputation of Bank Trustable -Track Record Low Loan Interest Rate High Interest Rate - TD Cross Selling

7 Base Rate Behavior source : Interest Rate Year and Month

8 Factors attracting Investors Towards Debt Market Gilt Edged Liquidity Low Volatility Index Linked Bonds Diversifi -cation

9 Preferred Investment based on Tenure

10 Correlation between Interest Rate and Bond Prices RBI Increase in Rate Attracts FD Bond Prices Fall Sell Bond Invest in FD Invest in FD RBI Decrease in Rate Fall in FD Interest Rate Demand for Bond Increases Withdraw Deposits Buy Bonds Buy Bonds source : businesstoday.intoday.in Interest rates and Bond prices share an Inverse relationship

11 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 %. 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 %.

12 Sep 25th, 2013 Interest Rate Year and Month

13 Investments in 2011 Investments in 2012 Investments in 2013 Investments in hdcci.in/ source business- standard.com source RBI Annual Report RBI Annual Report Based on interest rates: Interest Rate Percentage of Investment Investments in Year and Month

14 Investments in 2011 Investments in 2012 Investments in 2013 Percentage of Investment Investments in

15 source : indiabudget.nic.in

16 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

17 O c t 2 8, E T W e a l t h

18 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

19 enough _1.html volatility/1/20330.html enough _1.html volatility/1/20330.html References

20 Queries Answered Answered

21 Thanks a lot !!


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