REPORT ON RESULTS OBTAINED FROM EVALUATION OF TWO INVESTMENT OPPORTUNITIES:
1.) Bond (A) (Qatar modern electronics company for $42,250,000)
2) Bond (b) (Qatar international trade company for $53,750,000)
BOND (A) Qatar modern electronics company:
This report forms part of an OECD under the capital markets series which has greatly formed policy discussions on methods that can be put in place in capital markets and how can be used to serve an important role in channelling financial resources from their households to make a productive investment in the Qatar modern electronics company.
Key Findings:
1.) (Investment of $ 42,250,000 6years Bond)
- Extended growth in corporate bond investment:
Since the year 2007, the yearly global issuance of a corporate bond (Bond A) has averaged $9,840,000.This proves to a double the annual average between 2007 and 2009. Considering the successive interest rate increase, the announcement of a less monetary policy that will be accommodative and curb the fear imposed the investors that will slow the growth of the bond. However, the major Central bank of Qatar announced in mid-2018 that the government’s monetary policies were to be reviewed to adjust the investment of bonds. This has caused the issuance of corporate bonds to be rebounded and pushed the total amount that was issued in 2018 to an equivalent amount the company had invested in the previous year.
2.) (Investment of $ 53,750,000 2years Bond)
- B) Sell off and financial instability of Qatar international company
The growth of stock in the year 2007 showed that the bonds invested by this company, allowed the investors to seek and make high yields, thus influencing the regulations under the management of the portfolio. The decline in the year 2009 in the issuance of the corporate bonds during the last quarter of the year was linked to the success in the rise in interest rates. This was also coupled with investor worries and fears over a slow growth unfriendly monetary policies that are not accommodative (BoE, 2002; ECB, 2018).
Conclusion
Despite the increasing functions of the quantitative models that are used in standardization in analyzing the growth of the corporate bonds, the CRA has put more emphasis on the rates. It’s the function of the Qatar government to make sure that the monetary policies are regulated and be favourable to the two companies.
Reference
Federal Reserve (2019a), “Statement Regarding Monetary Policy implementation and balance sheet normalization’’, 30 January. https://www.federalreserve.gov/newsevents/pressreleases/monetary201918a.htm
Longmei, Z and W. Yuchen (2019), “Credit bonds” in The Future of China’s Bond market, International Monetary Fund, Washington, D.C.
MIS (2020), Annual Default Study: Defaults will edge Higher in 2020,30 January, Moody Investors Service, New York