Presented by: Mansha Anand 13BSP0395 ABOUT THE COMPANY Indxx seeks to redefine the global indexing space. Founded in 2005 and with offices in New York, London and New Delhi, the firm focuses on:
Index Licensing Index Calculation Analytics WHOM DO THEY SERVE? Exchange Traded Funds (ETFs) Mutual Funds Asset Managers Pension Funds
SWOT ANALYSIS
STRENGTH Develops and maintains unique indices Coverage of broad spectrum of asset classes such as equities,fixed income,commodities.
WEAKNESS Can be impacted by legal and regulatory changes in US and international level. High Attrition rate in the industry.
OPPURTUNITY Emerging scope for launching ETFs in India and therefore indices has recently been developed focussing Indian market. THREAT Volatility of financial markets. Already established players in the market like S&P,MSCI MICHAEL PORTER ANALYSIS Competitive Rivalry Threat of New Entry Buyer Power Threat of Substitution Supplier Power FINANCIAL ANALYSIS OF STANDARD & POOR
CURRENT RATIO QUICK RATIO RETURN ON CAPITAL EMPLOYED DEBT EQUITY RATIO NET PROFIT RATIO WORK PERFORMED Factsheet Development Creation of portfolios Work on US Fixed Income Database Maintenance of Websites Updation of Indices
FACTSHEET ABOUT THE PROJECT
ANALYSIS OF FRONTIER MARKET IN FIXED INCOME SPACE OBJECTIVE
Analysing the fixed income space (Debt Market) in the frontier market.
This study will help the company in launching its indices in these countries.
WHAT ARE FRONTIER MARKETS? A frontier market is a type of country that is not a developed market. These markets have lower market capitalizations and less liquidity. Investors who have benefited from the boom in emerging markets are now on the look-out for the next source of growth, which is putting the spotlight on frontier markets.
FRONTIER COUNTRIES BLOOMBERG: TOP 8 FRONTIER COUNTRIES 2014 1. QATAR 2. UAE 3. SAUDI ARABIA 4. ESTONIA 5. BAHRAIN 6. SLOVAKIA 7. LITHUANIA 8. BULGARIA
QATAR 16.90% 83.10% Qatar Bond Market Structure corporate bonds government bonds 45.07% 54.93% Debt Instrument Type Domestic Bonds International Bonds 2.35 1.18 2.87 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 Total Corporate Bonds Government bonds Average Yield to Maturity Average Yield to Maturity UAE 83.54% 16.46% UAE Bond Market Structure corporate bonds government bonds 23% 77% Debt Instrument type Domestic Bonds International Bonds 2.03 2.06 1.80 1.65 1.7 1.75 1.8 1.85 1.9 1.95 2 2.05 2.1 Total Corporate Bonds Government bonds Average Yield to Maturity Average Yield to Maturity SAUDI ARABIA 17.39% 82.61% Saudia Arabia Bond Market Structure Corporate Bonds Government bonds 95.65% 4.35% Debt Instrument Type Domestic Bonds International Bonds 0.83 0.70 0.86 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 total corporate government Average Yield to Maturity Average Yield to Maturity BAHRAIN
9.43% 90.57% Bahrain Bond Market Structure corporate bonds government bonds 75% 25% Debt Instrument Type Domestic Bonds International Bonds 3.24 2.77 3.41 0 0.5 1 1.5 2 2.5 3 3.5 4 Total Corporate Bonds Government bonds Average Yield to Maturity Average Yield to Maturity SLOVAKIA
15.79% 84.21% Slovakia Bond Market Structure corporate bonds government bonds 58% 42% Debt Instrument Type Domestic Bonds International Bonds 1.60 1.91 1.54 0.00 0.50 1.00 1.50 2.00 2.50 Total Corporate Bonds Government bonds Average Yield to Maturity Average Yield to Maturity LITHUANIA
3.33% 96.67% Lithuania Bond Market Structure Corporate Bonds Governmen t bonds 73% 27% Debt Instrument Type Domestic Bonds International Bonds 1.66 1.06 1.70 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 total corporate government Average Yield to Maturity Average Yield to Maturity BULGARIA 12.50% 87.50% Bulgaria Bond Market Structure Corporate Bonds Government bonds 78% 22% Debt Instrument Type Domestic Bonds International Bonds 1.97 8.73 1.49 0 1 2 3 4 5 6 7 8 9 10 total corporate government Average Yield to Maturity Average Yield to Maturity While launching an Exchange Traded Fund the ETF provider takes into consideration international bonds that have been issued by the country as foreign investors would prefer investing in Dollar denominated bonds, Euro Bonds rather than Local Currency Bonds.
Out of all the frontier countries that have been taken for analysis Qatar, UAE and Slovakia have issued a large number of International Bonds. UAE has issued highest number of dollar denominated bonds (77%). Therefore these countries can be tapped by the ETF providers for launching a fund.
S&P has affirmed AA Credit Rating to Qatar and UAE which is the second highest credit rating after AAA declaring them to be the most stabilized.
SOME RECENT UPDATES
Qatar, UAE about to get major upgrade.
As per CNN Money Qatar and UAE because of their outstanding performance will be upgraded soon in the list of Emerging Markets.