By Vijeta Singh
Green bonds are like regular bonds, but the money raised from these bonds goes towards the funding of ‘green’ business activities or projects in fields such as renewable energy, sustainable waste management, etc. These bonds are generally certified by Green Bond Principles (issued by International Capital Market Association) and Climate Bond Standards (issued by Climate Bonds Initiative) to ensure they are to finance projects that would generate environmental benefits.
These bonds can be in different forms, the most common being the full recourse green bond which is earmarked exclusively for environmentally beneficial projects. There are other varieties such as green ‘use of proceed’ revenue bonds and green securitized bonds.
By Koshica Oberoi
The demand for the yellow metal- gold is not just for consumption but it is also driven by investment. So, now let’s look at how price including various other factors affect the investment demand for gold. The gold prices have stopped rallying, unlike 2012, when gold prices were racing up due to growing consumer demand in India along with expected demand from investors pushed up the prices to spectacular heights.
The surge in price of gold halted by the end of 2015, considered to be the base for many years. Although gold prices have delivered gains of 30% since 2015, there are today many factors exerting compelling pressures on gold prices- some propelling them further and others dampening them. The highest consumers of gold, India and China, witness a decline in the demand because of which it is expected that the consumer demand will remain flat. Therefore, it is investment demand for gold that will support the gold prices. The recent scenario of increasing geopolitical tensions, inflation and unceasing rally made by stocks in India and US, makes gold a safe haven and an attractive diversifier for the investors. The demand for gold can be classified as follows:
– Prasun Banerjee, Editor TJEF
The banking system functions on the very foundation of trust between the lender and the creditor. Businessmen borrow money to build assets which supposedly churn more money when put to use. These businesses should have the competitive advantage to repay not only the principle but also the timely interests attached with the borrowed sum from the banks. Yet, history has numerous examples, when people tried to dupe the system and exploit loopholes to embezzle.
One such facility (/loophole) being employed on Indian banks have recently heated up the socio-political environment. The dent that has been caused on the coffer of Punjab National Bank (PNB) is in the tune of one-third of the re-capitalization amount that the bank is allocated. The LOUs which have led to such a massive loss, is being explained in a pictorial format.
The term LoU or Letter of Undertaking has recently been in news in wake of the banking fraud concerning Punjab National Bank and Nirav Modi. A LoU is a provision of bank guarantees under which a bank can allow its customer to raise money from another Indian bank’s foreign branch in the form of a short-term credit. The LOU serves the purpose of a bank guarantee for a bank’s customer for making payment to its offshore suppliers in the foreign currency.
For raising the LOU, the customer is supposed to pay margin money to the bank that issues the LOU and accordingly, they are granted a credit limit. Once the letter of credit is acknowledged and accepted, the lender (the foreign branch of Indian bank) transfers money to the nostro account of the bank that has issued the LoU.
Meaning – A correction is a reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index to adjust for an overvaluation. The latest stock market correction occurred on February 8, 2018 as the DJIA and the S&P 500 fell more than 10% from their recent highs hit in late January, 2018.
Corrections are generally temporary price declines interrupting an uptrend in the market or an asset. A correction has a shorter duration than a bear market or a recession, but it can be a precursor to either. A correction is very different from a crash since it measures the percentage decline from the most recent high. A crash is generally considered to be a 10% or more decline, irrespective of the most recent high. For investors, corrections provide a chance to see how truly comfortable they are with market risk, and to make changes to their portfolio if warranted. They also provide investors with an opportunity to potentially add companies at discounted prices, or to dollar cost average down on existing positions.