1. ET FinPro Module - 2
What are the Regular Investment Habits , and Investing
Patterns when there is
Increase in Interest Rates &
Decrease in Interest Rates ?
Batch Code: HYD01AA0213
Faculty :
30th October 2013
Vishwanathan Ramakrishnan
Presenter’s Name
Presenter’s ID
Gyaneshwary
E1300310000151
Sumanth
E1300310000107
Farha
E1300310000133
Silambarasan Elango
E1300310000132

2. Agenda
S.No
Description
1
Introduction
2
Decrease in Interest Rate
3
Increase in Interest Rate
4
Major Investments
5
Factors attracting Investors towards Bank
6
Factors attracting Investors towards Debt market
7
Preferred Investments
8
Base Rate Behavior 2010 - 2013
9
Correlation between Interest Rates and Bonds
10
Investments Patterns in Past
11
Investors Options in Recent times
12
Role of Media
13
Summary
14
References

3. Introduction
Income
Expenses
Savings
Investment
Need For Investment
Invest
Major Factor
OR

4. Need For Investment
Consider me :-
INTEREST RATE

5. When
Decrease in the Interest Rate
Increase in the Interest Rate
Attract Loan Takers
Attract Depositors
Promote Economy
Control Inflation
Govt. Debts

6. Major Investments
Bank
Term
Deposits
Market
Loans
Debt
Funds
Gold ETF

7. Factors attracting Investors Towards Bank Products
Reputation of
Bank
Low Loan
Interest
Rate
Trustable -Track
Record
High
Interest
Rate - TD
Cross Selling

8. Interest Rate
Base Rate Behavior 2010 - 2013
Year and Month
source : www.rbi.org.in

9. Factors attracting Investors Towards Debt Market

10. Preferred Investment based on Tenure

11. Correlation between Interest Rate and Bond Prices
Interest rates and Bond prices share an Inverse relationship
RBI Increase in
Rate
Bond Prices Fall
Invest in FD
RBI Decrease in
Rate
Attracts FD
Sell Bond
Fall in FD Interest
Rate
Demand for Bond
Increases
Buy Bonds
Withdraw
Deposits
source : businesstoday.intoday.in

12. Example
XYZ Corporation issues- Bond ,face value of Rs 100 ,Coupon Rate 6%.
Increase in Interest Rate : Secondary market Face Value Rs 99. Yield will be
(Rs 6/Rs 99)X100 =6.06 %.
Decrease in Interest Rate : Secondary market Face Value Rs 101. Yield will
be (Rs 6/Rs 101)X100 =5.94 %.

13. Interest Rate
Sep 25th, 2013
Year and Month

14. Interest Rate
Year and Month
Based on interest rates:
Investments in 2011
2013
2012
source
Percentage of
Investment
http://www.p
businessstandard.com
hdcci.in/
Investments
in

15. Percentage of Investment
Investments in 2011
Investments in
Percentage of Investment
Investments in 2012
Percentage of Investment
Investments in 2013
Investments in
Investments in

16. source : indiabudget.nic.in

17. Smart Investors always keeps an eye
on Daily News Update
Oct 21, 2013
Banks cut rates
on consumer
loans to get
funds from
government
Oct 22, 2013
Banks should
show real yield
on fixed
deposits

19. Summary
6W &
1H
 Why we need to Invest ?
 Which was the most Preferred Investment Tenure ?
 What were the Regular Investment Patterns?
 Where did they Invest when there is Increase in
Interest Rate ?
 When did they Invest in Bonds ?
 How changes in interest rate impacts Bond Prices ?
 Who are the better Investor?

20. References
http://rbi.org.in/rbi-sourcefiles/lendingrate/LendingRates.aspx#
http://www.phdcci.in/media_center_details.php?id=329
http://www.hdfcbank.com
http://indiabudget.nic.in
http://www.business-standard.com/article/pf/risk-free-returns-aren-tenough-113091500695_1.html
http://businesstoday.intoday.in/story/invest-debt-funds-stock-marketvolatility/1/20330.html
http://capitalmind.in
http://www.moneycontrol.com

21. Answered
Queries

22. Thanks a lot !!