KshitijKumar

Derivative Market

Derivatives are financial contracts whose value can derive from the value of underlying assets. the underlying assets could be Stock price, Index, currencies, commodities, Interest rates, etc. A derivative can trade on an exchange or over-the-counter. Future and options are Exchange-traded or Forward and swaps are OTC traded contracts. The Chicago Mercantile Exchange(CME) is the world’s largest Derivative exchange. The derivative market is said to be over $1 quadrillion on the notional value on the high end but there is a large difference in the notional value and the actual netted value of derivatives. The OTC derivative trades are risky due to the possibility of counterparty risk. After the 2007-08 crisis, many regulators, and semi-government bodies came into the picture to secure Participants, like ISDA, FINRA, CCP, EMIR, etc. Participants in the derivatives market are Hedgers, Speculators, arbitrageurs, and margin traders.
Advantages of Derivative contract:- •Allow Hedging:- Investors holding a substantial stock portfolio can hedge against the market risk. •Provides Leverage-Less capital required to enter into a contract. In the future contact need to pay only the initial margin. •Provides more liquidity than underlying assets. Exchange-Traded Derivative contracts can easily trade. •Gain for the expected decrease in value by taking a Short position.

LIC IPO

The most awaited mega IPO of Life Insurance Corporation (LIC) is likely to open on 4th May and close on 9th May. According to the report, Existing policyholders will get Rs-60 and retail investors and employees will also get an Rs-45 discount. After a Reservation, the remaining shares (50%) will be allocated to Qualified institutional Buyer (QIB), Retail (35%), and 15% for Institutional Investors. The government has planned to issue a 5% stake of value 31.6cr Shares in February 2022 but now they have decided to Issue 3.5% and will fetches-21000 cr. Price Band will offer Rs-902-949 per share. Investment Bankers and LIC Management will do roadshows and will meet with Potential investors starting on Wednesday and marked six cities across India-New Delhi, Mumbai, Bangaluru, Ahmedabad, Rajkot, and Kolkata. Online roadshows will cover Investors across other regions. #IPO #LIC #Capitalmarket #Shares

Russia will save the sinking Rubel!

After various sanctions amid the invasion of Ukraine, the Russian currency was falling 40% to 139 the dollar. Russia holds about $640 billion worth of foreign reserves which have frozen after the sanction. Out of the total gas import by European Union 40% come from Russia, 20% of oil import, and also 47% of solid fuel import comes from Russia. The top exports of Russia are crude petroleum ($74.4B), Refined Petroleum ($48B), Petroleum gas (($17.7B), gold ($18.7B), and coal briquettes ($14.5 billion). Exporting mostly to China ($49.3B), the United Kingdom ($25.3B), Netherland ($22.5B), Belarus ($15.3B), and Germany ($14.2B). In 2020, Russia was the world’s biggest exporter of wheat ($10.1B), semi-finished iron ($4.5B), nonfillet frozen fish ($2.58B), Naikel ($2.26B), and pig iron ($1.34B), according to a report of OEC world. Now, Russia knows the value of its assets so Russia started a ploy, and the government ordered Russian 🇷🇺 exporters to sell a minimum of 80% of foreign currency to support the Russian ruble. Russia asked their trading partner countries, that will accept only the Russian ruble against any other currency. Now, the value of the ruble against the dollar is currently trading at 81.30. As of now, we can say that Russia was able to rescue its Rubel with extreme steps. #Currency #Russiaukrenwar #export #Import #supplychain #Government

MSMEs are contributing to the 5trillion economy!

MSMEs heart of 5 trillion economies?
Since its formation, the MSME segment has province to be a highly dynamic Indian economic sector. MSMEs produce a wide range of products for Indian as well as international markets. MSMEs have provided employment opportunities in the rural area. Their contribution to the industrialization of rural areas with the yellow capital cost is quite appreciable. MSME’s contribution is remarkable in the economic development in different areas like requirement of low investment, flexibility in Operation, transportation, and huge contribution to domestic production. it also provides credit support limits or funding support to banks. The sector contributes with a wide network of about 6.3 crores units producing more than 8000 products and a share of around 36% in nominal GDP. their capacity to provide employment to around 120 million people and contributes around 45% of the overall export for India. According to the annual report of the Government of India, there are more than 6cr MSMEs in India. MSME ministry targets 2 increase its contribution towards GDP by up to 50% by 2025 and move ahead to reach a 5 trillion economy. MSME is in India provides silent support and acts as a defense against global economic shock and adversities.