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This is a presentation prepared by, Anshuman Dutta, Aditya Borborah, Ajeet Singh and Peeyoosh Srivastava, students of Department of Management Studies NIT Trichy.
Batch 2011-13
The presentation contains details analysis of the various financial instruments in Germant as in June @012

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  2. 2. German Equity Markets
  3. 3. List of ExchangesBerliner BörseBörse HamburgBörse HannoverBörse MünchenBörse StuttgartBörse DüsseldorfEurex, Frankfurt-based; (owned by DeutscheBörse and SWX)Frankfurt Stock Exchange (owned by DeutscheBörse; Index: DAX)
  4. 4. Berliner Börse in 1830
  5. 5. Berliner BörseFounded in 1685 through an edict of Great ElectorFriedrich Wilhelm and is one of the oldestexchanges in Germany. A particular focus on trading the widest possiblerange of foreign stocks.Has opened additional offices in London and Parisin order to underline its pan-European ambitions.In total Börse Berlin enables trading in over 15,000shares from 82 countries
  6. 6. Börse Berlin SegmentsBörse Berlin has two market segments, the Regulated Marketand the Open Market.The Regulated Market is a market segment that is governedby public law.Companies that want to launch their IPO on the RegulatedMarket, need to fulfill the following criteria:They need to have existed at least three yearsThey need to have equity capital of at least 1.25 million €At least 10,000 shares need to be issued with a free float of atleast 25 %Submission of an offering prospectus approved by BaFin withinformation about financial statements, capital flow, profitand loss and business prospects.
  7. 7. Börse Berlin SegmentsThe admission requirements are easier bycomparison to those of the Regulated Market:There are no specifications regarding the age of thecompany.The minimum nominal volume of the share issueshall at least be 250,000 Euro. The prospectivemarket value of the capital available to the marketshall not be below 1.5 million Euro.The shares to be included shall be spreadsufficiently (free flow of 20 %).
  8. 8. Indian connection in Borse BerlinSharesBonds
  9. 9. Börse HamburgFounded in 1558.Regular trading in securities began in 1815;therefore the Hamburg Stock Exchange is the oldestof the German Stock Exchanges.5 exchangesStockInsuranceGrainCoffeeInformation
  10. 10. Unique??How?Over 7 500 securities (shares, bonds, warrants andparticipation certificates, as well as open-end funds) Worldwide, the only other Insurance Exchanges arelocated in Rotterdam and London, and they aredifferently structured.Nothing is actually traded on the Hamburg InsuranceExchange. Instead, it serves the insurance industry as aforum for the exchange of information, as well as forbusiness processing, mainly in the so-called commercialinsurance branches (transport insurance, fire and liabilityinsurance for industry)
  11. 11. Börse HamburgTransactions in grain, oilseed, animal feed,pulses, seed and related products.Important task of the Hamburg Grain Exchangeconsists of the publication of form contracts forthe trade in grain, animal feed and pulses. Thesecontracts are valid worldwide.Coffee exchange is history now.
  12. 12. Börse Stuttgart (Investment product)Discount Certificates 196,051 (last week 3,453)Bonus certificates 156,516 (last week 6,489)Indexcertificates 4,750other CertificatesReverse Convertibles
  13. 13. Börse Stuttgart (leverage product)WarrantsKnock-out ProductsExotic Products
  14. 14. Börse Stuttgart (Equities)NationalForeignREITs
  15. 15. Börse Stuttgart(Bonds)Corporate BondsFederal BondsJumbo Bondother BondsProfit Certificates
  16. 16. Börse Stuttgart (Funds)ActiveETFETC
  17. 17. EurexInterest Rate Derivatives (f.e. Euro-Bund Futures, Euro-Bobl Futures)Equity Derivatives (Equity Options and Single Stock Futures based onEuropean, Brazilian and US underlyings)Equity Index Derivatives (f.e. EURO STOXX 50® Index Futures,DAX® Futures, SMI® Futures)Equity Index Dividend DerivativesVolatility Index DerivativesExchange Traded Funds DerivativesCredit Derivatives (iTraxx® Europe 5-year Index Series, iTraxx® Europe HiVol 5-year Index Series, iTraxx® Europe Crossover 5-year Index Series)Inflation DerivativesCommodity Derivatives (Agriculture Derivatives, Gold and Silver Derivatives,Power and CO2Derivatives in cooperation with EEX)Weather DerivativesProperty Derivatives
  18. 18. Frankfurt Stock ExchangeThe Frankfurt Stock Exchange accounts for over90 percent of the turnover in the Germanmarket and a very large share of the Europeanmarket.The Frankfurt Stock Exchange has more than250 international trading institutions.The trading indices in Frankfurtare DAX, DAXplus, CDAX, DivDAX, LDAX, MDAX,SDAX, TecDAX, VDAX and EuroStoxx 50.
  19. 19. Contd…over 100 billion Euros in the month ofNovember 2010 with more than 113 billionEuros traded on both Xetra and on the floor atthe Frankfurt Stock Exchange.In the year 2010, 1.32 trillion Euros traded onthe Frankfurt Stock Exchange
  20. 20. Frankfurt Stock Exchange statistics as of Jan, 2011Total companies listed on the Frankfurt Stock Exchange: 11,877German companies listed on the Frankfurt Stock Exchange: 1,082US companies listed on the Frankfurt Stock Exchange: 3,451Total companies listed on the OTCBB: 2,896Canadian companies listed on the Frankfurt Stock Exchange: 1,622Chinese and Hong Kong companies listed on the Frankfurt Stock Exchange: 534UK companies listed on the Frankfurt Stock Exchange: 563Australia companies listed on the Frankfurt Stock Exchange: 588Indian companies listed on the Frankfurt Stock Exchange: 30Japanese companies listed on the Frankfurt Stock Exchange: 535French companies listed on the Frankfurt Stock Exchange: 241
  21. 21. You think UK is supreme??The London Stock Exchange rejected a £1.35bntakeover bid from the Frankfurt Stock Exchangeoperator Deutsche Börse in December 2004
  22. 22. DAX Companies 30 blue chipAdidasAllianzBASFBayerBeiersdorfBMWCommerzbankDaimlerDeutsche BankDeutsche BörseDeutsche LufthansaDeutsche PostDeutsche TelekomE.ONFreseniusFresenius Medical CareHeidelbergCementHenkelInfineon TechnologiesK+SLindeMANMerckMetroMunich ReRWESAPSiemensThyssenKruppVolkswagen Group
  23. 23. MDAX 50 Prime Standard shares from sectorsexcluding technology that rank immediatelybelow the companies included in the DAX indexList with the assignmentPuma, Hugo Boss included
  24. 24. The SDAX is a stock market index composed of50 small and medium-sized companiesin Germany.The TecDAX stock index tracks the performanceof the 30 largest German companies from thetechnology sector.The VDAX-NEW Index expresses the variationmargin – the implied volatility ofthe DAX anticipated on the derivatives market
  25. 25. A brief Comparison with IndiaLack of instruments.Few investor informationStock Exchange promoting only equity.Market cap comparable in both the countriesWith 5112 BSE has the highest listings no foreigncompany listing in BSE.Number of IPOs in Germany is much higher thanIndia’s.
  26. 26. Derivative Market
  27. 27. The major exchange market for Europeanbenchmark derivatives is the German-Swissfutures and options exchange, Eurex.
  28. 28. Derivatives InstrumentsInterest Rate Derivatives (f.e. Euro-Bund Futures, Euro-Bobl Futures)Equity Derivatives (Equity Options and Single Stock Futures based onEuropean, Brazilian and US underlyings)Equity Index Derivatives (f.e. EURO STOXX 50® Index Futures,DAX® Futures, SMI® Futures)Equity Index Dividend DerivativesVolatility Index DerivativesExchange Traded Funds DerivativesCredit Derivatives (iTraxx® Europe 5-year Index Series, iTraxx® Europe HiVol 5-year Index Series, iTraxx® Europe Crossover 5-year Index Series)Inflation DerivativesCommodity Derivatives (Agriculture Derivatives, Gold and Silver Derivatives,Power and CO2Derivatives in cooperation with EEX)Weather DerivativesProperty Derivatives
  29. 29. Interest rate derivativeFixed Income DerivativesMoney Market DerivativesEurex BondsEurex Repo
  30. 30. Equity DerivativeEquity OptionsSelection by IndexSelection by CountrySelection by SectorSingle Stock FuturesSelection by IndexSelection by CountrySelection by SectorAdjustments due to Corporate Actions
  31. 31. Equity Index derivativeDAX®SMI®SLI Swiss Leader Index®OMXH25Dow JonesSTOXX® IndexesMSCI IndexRDX® USD IndexSENSEXKOSPI
  32. 32. Dividend DerivativesSingle Stock Dividend FuturesEquity Index Dividend Derivatives
  33. 33. Volatility Index DerivativesSTOXX® Mini FuturesVSTOXX® Options
  34. 34. Credit DerivativeiTraxx® Europe 5-year Index FuturesiTraxx® Europe HiVol 5-year Index FuturesiTraxx® Europe Crossover 5-year Index Futures
  35. 35. Inflation DerivativeEuro-Inflation Futures
  36. 36. Weather DerivativesUSAFloridaGulf
  37. 37. A look at all the productsAll productsA brochure for commodity derivative
  39. 39. € In Germany, everyone must have insurance coverage. The requirements state that anyone entering Germany and stays for six months or longer or anyone that moved to Germany for work would need insurance.Ω Only 0.3% or about 250,000 people in Germany are not insured.Ω Insurance is tax-financed for children.Ω Unemployed people pay premiums in proportion to their unemployment compensation, and for the long-term unemployed the government pays the sickness fund a fixed per-capita payment.
  40. 40. The following 36 private insurances make up over 99% of market share (as of February 2007):1. Allianz Krankenversicherung 19. Hanse-Merkur Krankenversicherung2. Alte Oldenburger Krankenversicherung 20. HUK-Coburg Krankenversicherung3. ARAG Krankenversicherung 21. Inter Krankenversicherung4. AXA Krankenversicherung 22. Karstadt-Quelle Krankenversicherung5. Barmenia Krankenversicherung 23. LKH Landeskrankenhilfe6. Bayerische Beamtenkrankenkasse 24. LVM Krankenversicherung7. BBV Krankenversicherung 25. Mannheimer Krankenversicherung8. Central Krankenversicherung 26. Mecklenburgische Krankenversicherung9. Concordia Krankenversicherung 27. Münchener Verein Krankenversicherung10. Continentale Krankenversicherung 28. Nürnberger Krankenversicherung11. DBV-Winterthur Krankenversicherung 29. R+V Krankenversicherung12. Debeka Krankenversicherung 30. SDK Süddeutsche Krankenversicherung13. Deutscher Ring Krankenversicherung 31. Signal Krankenversicherung14. DEVK Krankenversicherung 32. UKV Union Krankenversicherung15. DKV Deutsche Krankenversicherungglobal 33. Universa Krankenversicherungbusiness matchmaker 34. Victoria Krankenversicherung16. Globale Krankenversicherung 35. Württembergische Krankenversicherung(merged with DKV) 36. Zürich Krankenversicherung (17. Gothaer Krankenversicherung merged with DKV)18. Hallesche Krankenversicherung
  42. 42. ₰ For starters, a German insurance company would offer third-party private liability insurance.₰ It is the least expensive. However, this type of insurance coverage is also considered the most vital. The great thing about this is that for damages, there is no cap regarding the amount of damaged awarded to the other party.₰ In fact, this policy sold by a German insurance company would include any negligence or misdeed done to a horse or dog.₰ Another type of insurance provided by a German insurance company is for the homeowner, covering the home but also the contents of the home. With this, the coverage would protect you from loss or damage of your personal possessions, which would be anything inside the property, even built-in kitchen units.₰ A German insurance company would sell a policy that includes coverage for fire, storm damage, burglary, water damage, and vandalism.
  43. 43. ₰ Next is legal assistance insurance, which could be purchased from any list of insurance companies in Germany. For this, if you were to have an argument or misunderstanding with an employer, neighbor, local merchant, tax authority, landlord, or someone associated with a car accident you were in, then this coverage would help. Typically, you would have protection needed and ultimately, save a tremendous amount of money on legal bills.₰ Accidental Death and Disablement Insurance, which covers 100% of expenses in the case of accidental death, and five to six times the annual income of the individual who becomes disabled.₰ Term Life Insurance is also available, which provides a financial pay out to the beneficiary of the person with the policy when he or she passes away.₰ Annual travel insurance, which is great when taking a holiday or traveling on business to another country.
  44. 44. Type of Insurance Policies IN INDIAInsurance can be broadly classified into two categories life and generalinsurance.General InsuranceGeneral insurance can be classified as:-₰ Vehicle insurance,₰ fire insurance,₰ marine insurance etc.In India, ICICI Lombard, National Insurance, Oriental Insurance, Reliance,Cholamandalam MS, Tata AIG, HDFC Ergo etc provide general insurance.Life InsuranceLife insurance can be classified as:-₰ Whole-Life Plan.₰ Endowment.₰ Money back.₰ Term plan.₰ Unit Linked Insurance Plan (ULIP) – it is a new flavor of insurance which is a mix of investment as well as insurance. Insurance companies collects premium form client and invest the same into equity and debt markets.
  46. 46. ₰ In Germany there is a long tradition of company pension schemes being providedby the employer. These schemes constitute the “second pillar” of retirementprovision, between state and private pension provision.₰ The Act to Improve Company Pension Schemes, otherwise known as the Occupational Pensions Act (Betriebsrentengesetz), was passed in 1974 with the aim of regulating company pension provision.₰ Until 1998 the employer had sole responsibility for financing company-based pension schemes, social benefits which may be voluntary or contractual. The 1999 Pension Reform Act (Rentenreformgesetz) made legal provision for employees to have contributions deducted from their gross pay and paid into a pension scheme.₰ Total private pension assets in Germany are expected to grow to about 1.25 trillion euros by 2010.
  47. 47. Types of company pension scheme in GermanyѬ Company-based pension schemes with provisions for pensions (Direktzusage) - In the case of company-based schemes, the employer enters into a contractual commitment to pay the employee a pension. The scheme is financed by the employer or through deductions from the employee’s gross payѬ Benefit funds (Untersttzungskassen)- Benefit funds are legally autonomous pension funds. They can be operated by one or more enterprises, which must allocate resources to them to ensure that they are able to pay.Ѭ Direct insurance (Direktversicherung) In this type of pension scheme the company, as the insurance policy holder, takes out an individual or group life insurance policy in favour of its employees.
  48. 48. Staff pension insurance (Pensionskassen) – Staff pension insurance(Pensionskassen) comprises legally autonomous pension funds, which may beoperated by one or more enterprises. These pay contributions to the staffpension insurance, which funds the pension benefits later paid to the employees.Staff pension insurance schemes guarantee legal entitlement to their benefitsand are monitored by the Insurance Supervisory Office.Promotion of supplementary pension provision pursuantto section 10a of the Income Tax Act - The Bill promoting private pensionplans (Altersverm- gensgesetz) provides for pension funds as an additional typeof pension provision in section 112 of the Act on theSupervision of Insurance Enterprises. Pursuant to this Act, pension funds arelegally autonomous institutions which operate a funded company pensionscheme on behalf of the employer in return for the payment of contributions.Pension funds (Pensionsfonds) - If contributions to direct insurance, a staffpension insurance scheme or a pension fund are made from employees’private taxable and “contributed” compensation, they canalso claim the special tax allowance or the premium bonuspursuant to section 10a of the Income Tax Act.
  49. 49. ₰ Up to the end of 1999, an overall capitalstock of more than DM 600 billion is likely tohave been built up inthe context of companypension provision.This corresponded toaround 51L2% of the financial assets of thedomestic non-financial sectors,14 or 9% ofthe financial assets of private households (includingnon-profit institutions serving households)
  50. 50. PENSION FUNDS7820 Zurich UBS UK Value Pn Zurich Assurance Ltd Equity7821 Zurich UBS US Equity ZP Zurich Assurance Ltd Equity7822 Zurich UK Corporate Bond Zurich Assurance Ltd Fixed Interest7823 Zurich UK EP Zurich Assurance Ltd Equity7824 Zurich UK Equity Zurich Assurance Ltd Equity7825 Zurich UK Equity 2000 AP Zurich Assurance Ltd Equity7827 Zurich UK Equity Income Zurich Assurance Ltd Equity7828 Zurich UK Growth & Income Zurich Assurance Ltd Equity7829 Zurich UK Index Tracker Zurich Assurance Ltd Equity7830 Zurich UK Monthly Income EPZurich Assurance Ltd Equity7831 Zurich UK Opportunities Zurich Assurance Ltd Equity7832 Zurich UK Pref & Fxd Interest Zurich Assurance Ltd Fixed Interest7833 Zurich UK Select Zurich Assurance Ltd Equity7834 Zurich UK Smaller CompaniesZurich Assurance Ltd Equity7835 Zurich UK ZP Zurich Assurance Ltd Equity7836 Zurich With Profits Zurich Assurance Ltd With Profits
  51. 51. OUTLOOK OF PENSION FUND INDUSTRY IN INDIAѬ Pension fund industry has a very bright future in India. Favorable savings pattern, growing life expectancy and government initiatives like pension reforms are making India as one of the potential prospects for investors looking for pension businesses, according to “Indian Pension Fund Market Forecast to 2013”Ѭ Majority of working population in India expects to have better quality of life or at least maintain the current living standards after retirement.Ѭ This is the prime reason – why pension plans today account for around 39% of insurance industry’s total business.Ѭ Life insurers’ pension and annuity fund is forecasted to grow at a CAGR of around 39% between 2008-09 and 2012-13. HѬ owever, more potential lies under New Pension System (NPS) proposed by the central government.
  53. 53. Ѭ Germans’ realization that they may not be able to rely on a state pension to maintain their living standards in retirement is fueling expansion of the country’s mutual fund market. From 1985 to 1995, volume grew at a compound annual rate of 21 percent.Ѭ Mutual fund market will continue to grow by about 14 percent a year, reaching DM1.5 trillion by the end of 2005 (Exhibit 1). That could translate into revenue of DM26 billion for the industry, compared with about DM8 billion today.
  54. 54. Ѭ If current demographic trends continue, the proportion of the population over 60 will rise from 21 percent today to 34 percent by 2030. To pay all these extra people a state pension that matches current levels, contribution rates would have to rise some 20 percent to about 34 percent by 2035.
  55. 55. Subadvisory -Under a subadvisory contract, funds are kept and branded by the client, buta subadvisor manages a specific portion—those assets destined for non-European equitymarkets.Private labeling - Private-label contracts specify that entire funds are kept and managedby an investment company, although they are still distributed under the client’s brandname. This increases revenue by adding transaction fees, which account for 15 percent ofthe total revenue.Third-party distribution - Under a third-party agreement, an investment companydistributes proprietary funds under its own brand name through financial intermediariessuch as retail or direct banks, insurance agents, or independent investment consultants.Fully integrated - A fully integrated investment company covers the entire businesssystem, from fund management to proprietary distribution through a branch network, asales force, or direct sales. It is able to exploit the full revenue potential of mutual funds,including the sales charges that account for about 45 per cent of total revenues.
  56. 56. TOP GERMAN MUTUAL FUNDSDIRECTORY OF MUTUAL FUND COMPANIESThe BVI, or Bundesverband Investment und Asset Management, has fundedAnd launched a central Ombudsmans office for the mutual-funds industry,based in Berlin and led by two judges – Gerd Nobbe, a retired chief justiceat Germanys federal court, and Wolfgang Arenhövel, president of theHanseatic Higher Regional Court in Bremen.Previously, German retail investors could only complain directly to thecountrys financial-services regulator, BaFin. It is still done in the same wayIn India.
  57. 57. Top German Mutual FundsiShares MSCI-Germany (EWG) Germany Fund Inc. (GER) New Germany Fund Inc. (GF) Germany Fund Inc. (XGERX) New Germany Fund Inc. (XGFNX)Top Indian Mutual fund companiesHDFC Mutual FundTata Mutual FundSBI Mutual FundReliance Mutual FundDSP BlackRock Mutual FundKotak Mutual FundPrincipal Mutual FundSundaram BNP Paribas Mutual FundFranklin Templeton Mutual FundBirla Sun Life Mutual Fund
  58. 58. MUTUAL FUNDS IN INDIABharti AXA Mutual Fund AIG Global Investment Group Mutual FundBirla Sun Life Mutual Fund Axis Mutual FundBNP Paribas Mutual Fund Baroda Pioneer Mutual FundCanara Robeco Mutual Fund Benchmark Mutual FundDaiwa Mutual Fund JM Financial Mutual FundDBS Chola Mutual Fund JP Morgan Mutual FundDeutsche Mutual Fund Kotak Mahindra Mutual FundDSP BlackRock Mutual Fund L&T Mutual FundEdelweiss Mutual Fund LIC Nomura Mutual FundEscorts Mutual Fund Lotus India Mutual FundFidelity Mutual Fund Mirae Asset Mutual FundFortis Mutual Fund Morgan Stanley Mutual FundFranklin Templeton Mutual Fund Motilal Oswal Mutual FundHDFC Mutual Fund Pramerica Mutual FundHSBC Mutual Fund Principal Mutual FundICICI Prudential Mutual Fund Quantum Mutual FundIDFC Mutual Fund Reliance Mutual FundING Mutual Fund Religare Mutual FundTata Mutual Fund Sahara Mutual FundTaurus Mutual Fund SBI Mutual FundUTI Mutual Fund Sundaram Mutual Fund
  59. 59. German Bond Market
  60. 60. Government Securitiesone of the largest and most liquid sovereign debt markets inthe worldhighest standards of transparency and reliability in itsissuance policymost liquid government securities in EuropeDivided into money market and capital market instruments,German Government securities offer original maturitiesranging from three months to 30 years. In the money marketsegment, the Federal Government issues Treasury discountpaper (“Bubills”) with maturities of six and twelve months.The offering of capital market products begins with FederalTreasury notes (“Schaetze”) with a maturity of two years,followed by five-year Federal notes (“Bobls”) and Federalbonds (“Bunds”) with maturities of ten and 30 years.
  61. 61. Eurozone Markets for Sovereign Debt
  62. 62. Global Markets for Sovereign Debt
  63. 63. Government Securities Market
  64. 64. Government BondsFive Year Federal Notes (Bobls)Federal Treasury Notes (Schaetze)Treasury Discount paper (Bubils)Inflation-Linked Securities • Inflation-linked five-year Federal Note (Bobl/ei) • Inflation-linked Federal Bond (Bund/ei)
  65. 65. Five Year Federal Notes (Bobls)With original maturities of five years, Bobls cover the middle maturity segment of theGerman Government yield curve. They account for about 20% of the FederalGovernment’s debt portfolio in 2010.Characteristics • Interest paid annually • redemption at par • interest calculated on an actual/365 or actual/366 basis • not redeemable prematurely and not callable by the issuer
  66. 66. Federal Treasury Notes (Schaetze)With a maturity of two years, Federal Treasury notes (Schaetze) are the shortest-datedcapital market instruments issued by the Federal Government. They account for about12% of the Government’s outstanding debt portfolio in 2011.Characteristics • Interest paid annually • redemption at par • interest calculated on an actual/365 or actual/366 basis • not redeemable prematurely and not callable by the issuer
  67. 67. Treasury Discount paper (Bubils)Bubills are the Bund’s money market securities. New issues come in maturities of sixand nine months. Up to twelve months a complete curve of Bubills is outstanding.Bubills account for about ten percent of its total debt portfolio in 2010.Characteristics • Interest paid in the form of a discount • redemption at par • interest calculated on an actual/360 basis • not redeemable prematurely and not callable by the issuer • not listed
  68. 68. Inflation-Linked SecuritiesThere are currently five inflation-linked German Government securities in circulation:Three ten-year Federal bonds and two five-year Federal note. These new financinginstruments account for over 4% of the Federal Government’s debt portfolio.Interest is paid annually in arrears on the basis of an indexed interest rate,adjusted for inflation according to the European reference index (HVPI – excludingtobacco). Original maturity is five years, with redemption at least at par according tothe development of inflation, and interest calculated on an actual/actual basis.
  69. 69. Issuance Structure
  70. 70. India vs. Germany 10 year bond yield
  71. 71. German Government Bonds Yield COUPON MATURITY PRICE/YIELD PRICE/YIELD CHANGE TIME3-Month 0.000 07/11/2012 99.99 / 0.12 -0.001 / 0.006 04/066-Month 0.000 10/10/2012 99.96 / 0.13 -0.005 / 0.009 04/061-Year 1.500 03/15/2013 101.29 / 0.13 -0.009 / 0.009 04/062-Year 0.250 03/14/2014 100.23 / 0.14 -0.018 / 0.009 04/063-Year 2.500 02/27/2015 106.45 / 0.26 -0.048 / 0.016 04/064-Year 2.000 02/26/2016 105.99 / 0.45 -0.039 / 0.010 04/065-Year 0.750 02/24/2017 100.23 / 0.71 -0.049 / 0.010 04/066-Year 4.000 01/04/2018 117.17 / 0.92 -0.053 / 0.009 04/067-Year 3.750 01/04/2019 116.87 / 1.14 -0.084 / 0.012 04/068-Year 3.250 01/04/2020 113.93 / 1.35 -0.102 / 0.013 04/069-Year 2.500 01/04/2021 107.77 / 1.55 -0.089 / 0.010 04/0610-Year 2.000 01/04/2022 102.49 / 1.73 -0.087 / 0.010 04/0615-Year 6.500 07/04/2027 153.00 / 2.34 -0.148 / 0.009 04/0620-Year 5.500 01/04/2031 144.73 / 2.50 -0.136 / 0.007 04/0630-Year 3.250 07/04/2042 117.54 / 2.44 -0.129 / 0.005 04/06
  72. 72. German Bonds in Trouble there are other reasons why investors might have lost their previously appetite for “safe-haven” bunds. Among them:Germany might get sucked into the whirlpool of Eurozone sovereign bonds byguaranteeing more and more of them via European bailout funds and Eurobonds. Allwould transfer risk to Germanys own finances.Or the opposite: Germany might not do enough, fast enough, to save the euro, and asa consequence, might get sucked down as well.Germany might allow the ECB to print unlimited amounts of money and solve the debtcrisis once and for all through inflation and devaluation.Or worse for bondholders: Germany might break away from the euro-zone and issueits own currency either within a mini-euro-zone or alone. The ECB would then be freeto solve the debt crisis of the Eurozone’s remaining members by monetizing theirsovereign debt. The euro might well lose 30-50% of its value over the next decade, asthe dollar has done. And investors who’d bought euro-denominated 10-year bunds ata yield of 1.98% would get screwed royally.In this scenario, Italian 10-year bonds with a yield of over 7% would compensateinvestors adequately for the expected inflation.
  73. 73. Purchasing German BondsBy opening a debt register account with the German Finance Agency (GFA) they canbe purchased and held in custody simply, conveniently and without charge.German Government Securities How they can be purchasedGovernment Day-Bond Online bankingFederal Treasury financing papers Telephone bankingFive-year Federal notes MailFederal savings notes Branch
  74. 74. List of Corporate Bonds
  75. 75. German Banking System
  76. 76. Indian Banking System
  77. 77. Money marketThe money market is an instrument that deals with the lendingand borrowing of short term finances.Instruments of MM are such as treasury bills(Bubills), bankers’acceptance, certificate of deposits, repurchase agreements,commercial paper, Eurodollar deposits, money market mutualfunds and Certificates of deposit (CD) use in Germany.Bubills: treasury discount paper with maturities of 6, 9 and 12monthsHigh participation by Government bodies, Individuals and privateinstitutionsRegulatory: Deutsche Bundesbank
  78. 78. Money Market- features
  79. 79. Money market in India
  80. 80. Comparison b/w German Retail MMF andGerman govt. bill(Bubill)
  81. 81. Flows of Money Market Funds
  82. 82. Asset Composition of German MMF
  83. 83. In India