T here are a lot of companies constantly analyses the level of interest rates and calculate vector interest rates for corporate and municipal bonds. T his indicator characterizes our expectations of a change in interest rates in the coming year. P ositive interest rates mean anticipation of the growth of the General level of interest rates and the fall in the price of a bond. I n case of a positive vector of interest rates in our opinion it is expedient to buy short-term bonds.
I n case of a negative the opposite. T he value of the vector in the module characterizes the strength of changes in the level of interest rates on bonds for the next year.
For example, the vector interest rate +20% means that expect the growth of interest rates on the bonds on 20%. At the current level of interest rates, say, 10%, this would mean that expect their growth to 12%.
N ow, when explained the mechanism of price formation and management of yield, a few words about the formation of the portfolio and on the comparison of the bonds between themselves. A ll bonds, which are traded on the market, are different. D ivide all the multitude of the bonds on the homogeneous to the extent of the group’s risk, by using a ranking system Arsagera Asset Certification. T he ranking takes into account such indicators as liquidity and credit quality.
T he first and the second group — this is the most reliable and liquid bonds of the third and the fourth — the second echelon, the fifth and the sixth is riskier bonds. Each investor forms a portfolio taking into account its appetite and attitudes towards risk.
Thus, establishes requirements to the diversification. The company’s objective is to establish and maintain in the portfolio of a set of bonds of the maximum potential profitableness, and change the structure of the portfolio at change of the level of interest rates.
Conclusion
Bond — issued security that fixes the right of its holder to receive from the Issuer of the bonds within the period specified by it of its nominal value and fixed interest on the value of assets or other property equivalent.
1. With the expected decrease in the level of interest rates more profitable to buy long-term bonds, and in anticipation of the growth of short-term bonds.
2. You need to select the measure of risk for the portfolio of bonds, which corresponds to the «appetite for risk». In this task, you can use a ranking system Arsagera Asset Certification.
These two simple Board will independently develop a portfolio of bonds and effectively manage it.
3. To increase the efficiency of portfolio management it is necessary to compare bonds between themselves within each group, as well as calculate and keep a track of their potential profitability. This is a time-consuming process.
List of the used literature
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2. Gerasimov A. The bond market as an indicator of the improvement of the regional Finance // RZB. 2007. № 9. — P. 1.
3. Ivasenko A., Nikonov A., Pavlenko V. Securities market: Tools and mechanisms of functioning: Textbook. manual.- M.: KNORUS, 2008. — 272 p.
4. Ilyin S., Marenkov N. The basis of the economy: Textbook. manual.- M.: Phoenix, 2009. 672 p.
5. Kilyachkov A.A. Workshop on the Russian securities market: Textbook. manual.- M.: BECK, 2009. — 184 p.
6. Kononova O.F. The Russian financial markets in the year 2009: (analytical review) // Banking services. — 2009. № 1. — P. 9−17.
7. Kovalev A. Prospects of development of corporate bonds market of the regional banks of // RZB. 2007. № 4. — P.
3.
8. Petrov V. Russian financial market: Evaluation and projections // Society and economy. — 2008. — № 10.-P. 71−90.
9. Sabitov N.KH., Tikhonova R.W. The operations of the Bank of Russia on the open market: Stages of development // Money and credit.- 2009. № 12.-P. 44−48.
10. Scherbakov A. Market of state securities of the Russian Federation and prospects of its development for the period 2006;2008. // Finance.- 2009. № 8. P. 3−7.
Glossary
An acquisition — ΠΏΡΠΈΠΎΠ±ΡΠ΅ΡΠ΅Π½ΠΈΠ΅
To authorized — ΡΠ°Π·ΡΠ΅ΡΠ°ΡΡ
A bond — ΠΎΠ±Π»ΠΈΠ³Π°ΡΠΈΡ
Convertible — ΠΊΠΎΠ½Π²Π΅ΡΡΠΈΡΡΠ΅ΠΌΠ°Ρ ΡΠ΅Π½Π½Π°Ρ Π±ΡΠΌΠ°Π³Π°
Compulsory — ΠΎΠ±ΡΠ·Π°ΡΠ΅Π»ΡΠ½ΡΠΉ
Current value — ΡΠ΅ΠΊΡΡΠ°Ρ ΡΡΠΎΠΈΠΌΠΎΡΡΡ
To Evaluate — ΠΎΡΠ΅Π½ΠΈΠ²Π°ΡΡ
To floating — Π²Π°ΡΠΈΡΠΎΠ²Π°ΡΡ
An Indebtedness — Π·Π°Π΄ΠΎΠ»ΠΆΠ΅Π½Π½ΠΎΡΡΡ
An Intermediary — ΠΏΠΎΡΡΠ΅Π΄Π½ΠΈΠΊ
To issue — Π²ΡΠΏΡΡΠΊΠ°ΡΡ
joint-stock — Π°ΠΊΡΠΈΠΎΠ½Π΅ΡΠ½ΡΠΉ
A legislation — Π·Π°ΠΊΠΎΠ½ΠΎΠ΄Π°ΡΠ΅Π»ΡΡΡΠ²ΠΎ
A maturity — ΡΡΠΎΠΊ Π²ΡΠΏΠ»Π°ΡΡ ΠΏΠΎ ΠΏΠ»Π°ΡΠ΅ΠΆΠ°ΠΌ
A profitableness — Π΄ΠΎΡ
ΠΎΠ΄Π½ΠΎΡΡΡ
Redeemable — ΠΏΠΎΠ³Π°ΡΠ°Π΅ΠΌΡΠΉ
A solvency — ΠΏΠ»Π°ΡΠ΅ΠΆΠ΅ΡΠΏΠΎΡΠΎΠ±Π½ΠΎΡΡΡ
A Submitting — ΠΏΠ΅ΡΠ΅Π΄Π°ΡΠ°
Securities — ΡΠ΅Π½Π½ΡΠ΅ Π±ΡΠΌΠ°Π³ΠΈ
Temporarily — Π²ΡΠ΅ΠΌΠ΅Π½Π½ΠΎ
Ilyin S., Marenkov N. The basis of the economy: Textbook. manual.- M.: Phoenix, 2009. P.
72.
Kovalev A. Prospects of development of corporate bonds market of the regional banks of // RZB. 2007. № 4. — P.
3.
Kononova O.F. The Russian financial markets in the year 2009: (analytical review) // Banking services. — 2009. № 1. — P. 9−17.
Sabitov N.KH., Tikhonova R.W. The operations of the Bank of Russia on the open market: Stages of development // Money and credit.- 2009. № 12.-P. 44−48.
