Discover and read the best of Twitter Threads about #GSec
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Thread on Government Securities (G-Sec)🧵
Topics:
- What are Bonds?
- Government Bond types
- Why I preferred G-sec☺️
- How to invest in G-sec?
- How interest payout works in G-sec?
- Things to consider while buying G-Sec in Secondary Market
- Taxation on Bonds
- Key Takeaways
Topics:
- What are Bonds?
- Government Bond types
- Why I preferred G-sec☺️
- How to invest in G-sec?
- How interest payout works in G-sec?
- Things to consider while buying G-Sec in Secondary Market
- Taxation on Bonds
- Key Takeaways
1. What are Bonds?
- These are fixed income debt instruments issued by the central/state governments.
- Like how we take Loans from Banks, Government raises money by taking loan from us via Bonds.
- Every bond has a two components associated: Interest component & Maturity Date.
- These are fixed income debt instruments issued by the central/state governments.
- Like how we take Loans from Banks, Government raises money by taking loan from us via Bonds.
- Every bond has a two components associated: Interest component & Maturity Date.
- Government would pay this much interest every year until the maturity date.
- They are risk free investments, as they are borne by Government❤️
2. Government Bond Types:
They are 3 types:
Treasury Bills (T-Bills), Government Securities (G-Sec) & State Development Loans (SDLs)
- They are risk free investments, as they are borne by Government❤️
2. Government Bond Types:
They are 3 types:
Treasury Bills (T-Bills), Government Securities (G-Sec) & State Development Loans (SDLs)
(1) Hey #StarshipAddicts...I have a feeling that a lot of you have heard various things here and there about possible issues with the #OrbitalTankFarm at the #Starbase launch complex. Check out this thread if you want the FULL story starting from the very first signs of trouble
(2) This is a break from my normal style, I'm going to tell you all a story.
At the end of May 2021, I took my first ever trip to Starbase as a treat to myself after quitting my job as an Engineer in the Oil & Gas industry.
At the end of May 2021, I took my first ever trip to Starbase as a treat to myself after quitting my job as an Engineer in the Oil & Gas industry.
Gilt MFs - Busting the Trader’s myth
These days many debt MF investors are looking at GILT funds for investment purpose - lets decode the GILT Funds (1/n)
#mutualfunds #gilt #debt
These days many debt MF investors are looking at GILT funds for investment purpose - lets decode the GILT Funds (1/n)
#mutualfunds #gilt #debt
These funds invest in government securities of various maturity periods - thus too less credit risk but factors such as change in interest rate and gsec valuation etc. drive the volatility in NAV of these funds. (2/n)
When Govt of India needs money, the RBI issues fixed-term government securities. These are picked up by the gilt fund manager - he plays on coupon, duration and interest rate outlook. (3/n)
Germany, yesterday, issued a 30-year bond that offers negative yield (average yield of -0.11%).
This typically means that investors are paying German government to hold their debt. Why would investors invest in such a bond? Thread 1/8
This typically means that investors are paying German government to hold their debt. Why would investors invest in such a bond? Thread 1/8
The coupon set on these bonds (or Bunds, as they are called in Germany) is 0% i.e. the government will not pay any interest at all on these bonds.
In comparison, if GoI issues a 30 year bond today, the interest rate offered would be ~7%. 2/8
In comparison, if GoI issues a 30 year bond today, the interest rate offered would be ~7%. 2/8
A negative yield of -0.11% means that an investor in this bond will pay 11 basis points per year to German Govt to borrow the sum i.e. an investment of Rs. 100 in these bonds would yield ~Rs. 97 in 30 years, a loss of ~Rs. 3. 3/8
Today I cover the Government Securities (G-Secs) market. G-Secs, in short, are debt instruments through which Government borrows from the public (banks, financial institutions etc.). This post covers the size, type of lenders, and other broad contours of G-Sec market. Thread 1/8
The total size of the G-Sec market is approx. 92.86 lakh crore. In comparison, the size of the listed equity market (total market capitalisation of all listed stocks) was 141.47 lakh crore in July, 2019. (2/8)
Out of the total borrowing of Rs. 92.86 lakh crore, ~ Rs. 64.49 lakh crore borrowing is from Central Govt and the remaining Rs. 28.37 lakh crore borrowing is from State Govts i.e. of the the total borrowings 69.45 % is from Central Govt and 30.55 % is from State Govts. (3/8)
