Module on Structured Products

The first module I published on my blog was on Structured Products. Globally, structured products form an important part of asset allocation and portfolio management. It also a very good way of taking exposures across various asset classes ranging from forex, commodities, equities, interest rates etc. Digital options form an important part of some of the products detailed here. Digital options are binary options i.e. the payout would be zero or predetermined as defined in the investment mandate.

The presentation which was first published in 2015 on this blog, details brief outline on structured products, different types of structured notes, range accrual plans, knout out structured notes and valuation of a NIFTY equity lined structured note.

Check out this link

https://themiddleroad.org/knowledge-tutorials-presentations/

 

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Fed Hikes Rate

Federal Reserve today raised the US Fed Fund rates and the rate will range between 1.75% to 2%. Fed rate decides mortgage,  credit card, student loan rates among others. The rates are now close to pre-credit crisis levels. This was widely anticipated, so let’s look at what Fed rate means and Federal Reserve manages to keep the rates with a tight band.

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What is dirty float?

Coming up an article on the dirty float not to be confused with Dirty Dancing. Dirty float here alludes to currency intervention by central banks to stabilize currency within a band. This policy is followed by many countries including India.  This term came up during the recent trade rhetoric and have thought about writing a bit on this subject for some time and with this, we come to a concept of Impossible Trinity

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Educate Girls

Educate Girls, a nonprofit organization based in India, is empowering women in rural India through increased access to quality education to cut gender inequality. Educate Girls is also the first nonprofit or any organization in India to use Social Impact Bonds to proliferate pay for success as a model for delivering a measurable and sustainable social impact. Continue reading “Educate Girls”

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One for FIFA World Cup

FIFA World Cup starts on 14 of this month. According to FIFA, 44% of world’s population watched at least one minute of soccer during the last world cup. Not sure how the statistics i.e. the sampling worked out for this figure but the biggest sporting spectacle would start in two days.

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Rise of Impact Investing in India

Impact investing in India is the largest in South Asia and second in the world according to a report published in May 2016, titled A decade of impact investing in India. Impact investing or impact capital’s mission is to create a positive social impact related to social or environmental cause along with a financial return. Impact capital has a dual goal, blended, between social (first priority)  and financial return. Continue reading “Rise of Impact Investing in India”

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Blue Planet ||

Highly recommend the documentary Blue Planet 2. Water covers about 70% of the surface of this planet yet we know nothing about life beneath the oceans. The documentary Blue Planet is a triumph on many grounds. The documentary opens with the most benevolent organisms on this planet…Ah, Dolphins. The documentary is both a visual and informative spectacle spread out over the next 1 hour 34 minutes, encompassing underwater ecosystem. Breathtaking visuals, it’s very informative and intellectually stimulating.

 

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One for Soccer World Cup

Soccer world cup is starting soon and I want to write something on soccer. I want to cover Johan Cruyff, one of the greatest soccer players of all time. Johan Cruff is unarguably not only one of the greatest soccer players of all time but also one of the greatest coaches and managers of all time.

This article would include videos, photos to make it colorful and plan to release it before the world cup…Stay tuned…

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Coming up…

Articles on impact investing in India. The article on fin-tech would be revised further.

Also, planning to feature a weekly synopsis of global news, especially news featuring financial markets, global development etc. Global readership has surpassed 23,000 times and its time to start some new features on the website. Stay tuned…

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Rise of Digital Payments in India

Digital payments, which form part of mobile payments, also work through digital wallets (P2P) is very convenient to use. They bypass savings and checking account and form as an alternative to using credit or debit card. P2P Digital wallets are linked to your savings/checking account to easily transfer cash for facilitating purchases online or payment of utilities etc. China’s is setting the benchmark for innovation in many categories not only in e-commerce but also in many emerging technologies. Apart from Alipay, WeChat Pay is another leading digital online payment player in China. Jack Ma also invested in Paytm, the leading online payment player in India, which is planning to create the largest digital bank in the world.  The milieu of innovation and entrepreneurship is also due to the fast emerging technology ecosystem within China.

Digital payments are a great way to further cashless payments within an economy so successfully done by Sweden in Europe. A major revenue growth area for Amazon would be Amazon Pay as an alternative mode of payment for online purchases while Apple Pay and Google Pay are already huge players in this segment. Whats App is launching its version of digital payments while Venmo from Paypal is a prominent rising P2P digital payment star in the US. India has been a leader in digital payment space.

Credit Suisse estimates that the mobile payments in India will reach $1T by 2023, a huge growth from the estimated $200B in 2018. The surge in the fintech industry in India is hugely due to the policies promoted by the present government for encouraging incentives like digital lockers. Mr. Modi’s thrust to promote digitization is also a very measured way to bring underbanked people in India into the banking sector. Paytm digital bank can accept deposits and remittances but can not lend, to mitigate risk-taking behavior. This would also help the unbanked population in India to be included in the banking sector. According to many reports, there are more than 60 fintech players in India in the digital payment segment, a surge due to Indian government pro digitization policies especially after 2016. (Citation would be included).

Deloitte estimates the mobile wallet industry has shown a huge growth between 2013 and 2017, with a phenomenal growth of 120% CAGR, having more than doubled in 2016 and 2017. The report further estimates, that prepayment instruments increased from 10% to 22% of total digital transactions soon after the commencement of demonization policy. A major policy initiative taken by the government was to introduce Unified Payment Interface, a real-time payment processing system to transfer cash online from account to the wallet. Launched in 2016, this is one of the most innovative features in the world and serves as a catalyst for the proliferation of digital payment system in India.

Mobile payment has been one of the most innovative technological methods used in poor countries especially sub-Saharan countries to propagate financial inclusion. Mobile payment has been one of the most impactful financial inclusion tools of modern times. 

 

 

 

 

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