Uber and Pinterest are amongst the hottest tech start-ups in the world right now. This is why the fact that both of these companies have chosen the New York Stock Exchange (NYSE) to list their shares on is being seen as great news for the exchange. The NYSE has beaten the NASDAQ as well as many foreign stock exchanges in order to achieve this feat. This is remarkable from the point of view of NYSE. However, it also raises questions about how companies choose the stock exchange where they plan first to list their shares. In this article, we will…
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All stock market investors know that markets go through periods of euphoria and panic. During periods of euphoria, investors keep on buying shares in the hope of a higher payoff. In technical terms, this is the situation wherein the entire market becomes overvalued. The opposite of this also happens when fear grips the market, everybody starts selling all their shares and the market becomes undervalued. The problem is that overvalued and undervalued markets are normally seen in hindsight. Most investors believe that the market that they are in at the present moment is fairly valued. If the market is overvalued,…
In September 2018, Austria became the latest developed country to issue ultra-long-term bonds. As per the deal, Austria raised a total of $4.2 billion which have to be paid back after 100 years! The interest rates on this bond were 2.11%. This deal is being called the largest ever issue of bonds which have a hundred-year maturity. This is not the first time Austria has tried its luck selling ultra-long-term bonds. In 2016, it issued 70-year bonds which were quickly snapped up by investors. The issuance of these ultra-long-term bonds has given Austria a competitive edge. Most other Eurozone countries…
Credit enhancement refers to the artificial restructuring of credit products which results in the improvement of its credit rating. In simple words, if a bond being issued by an entity has credit rating BB+, it can use credit enhancement techniques to increase its credit rating to AA+ or so. There are obvious benefits of using credit enhancement techniques. Some of them have been listed below. Firstly, from the issuer’s point of view, the benefit is twofold. Firstly, when the credit rating increases, the security becomes palatable to a lot more investors. It is a known fact that many pension funds…
Development impact bonds are a revolutionary new type of bonds which are being introduced in the market. These bonds have been introduced to ensure that the profit motive of the financier is also met while meeting the development needs of the social entrepreneur. What are Development Impact Bonds? Development impact bonds are a three-way financial instrument which are meant to meet the development needs of society. The three parties to the contract are a donor, a financier, and a recipient NGO or social entrepreneur. There are many donors across the world who want to give money to the poor. However,…
The term short selling is often seen in the news. This tactic is regularly used by well-known investors. They are also very public about the shares they have shorted. This prompts many retail investors to follow suit. While, it may be true that many funds and high net worth investors make a lot of money shorting stocks, it is also true that short selling is dangerous. Generally, it should be avoided by retail investors. In this article, we will have a closer look at the concept of short selling. We will also try to understand the common risks that are associated…
There are many asset classes that are available to the common man. The average investor can put their money in stocks, bonds, real estate, gold, mutual funds, etc. However, there are certain asset classes which are not available to every individual. One of the asset classes are “unlisted companies” or private equity. These asset classes tend to provide the best returns but also have the highest risk. This is the reason why in most parts of the world, the access to these investments is limited. In the United States, for instance, only accredited investors are allowed to invest in this…
The news media has been full of claims that the present market is the longest bull market in history. Media reports have claimed that the current bull market which began on March 9, 2009, has lasted for close to 3500 days. This Bull Run seems to have surpassed the previous Bull Run which began after the end of the dot-com bubble in 2002 and continued up to 2008. This Bull Run has also given the investors some spectacular returns. The compounded annual growth rate for the stock market returns are close to 19%. These returns are mindboggling considering the fact…
Taxation has a major impact on the return that any investment generates. This is the reason why it is important to understand the impact of taxation on cryptocurrencies. However, since cryptocurrencies are relatively new, there is considerable ambiguity regarding the taxability of cryptocurrencies. In this article, we will have a closer look at some of the principles that are followed during this taxation process. Also, we will understand the laws pertaining to taxation of cryptocurrencies which are in force at the present moment. Cryptocurrencies in Australia and Canada The laws of Canada and Australia are somewhat similar when it comes…
hat is Blockchain and what is a Distributed Ledger? Not a day goes by without a media report on how a particular firm or entity as well as an upcoming governmental initiatives is thinking of using Blockchain technology for security, integrity, and consistency of data. Further, anyone who has heard of Bitcoin would have definitely known that it is underpinned by the Blockchain technology and is perhaps the single most important reason for the latter becoming popular and vice versa. Thus, what is Blockchain and what are the benefits and challenges of using the same in applications, whether they are…
