TAILIEUCHUNG - Report of High Level Expert Committee on Corporate Bonds and Securitization

Though not explicitly rooted in the ICAPM, scholars studying global capital flows have been concerned with the prospect that investors will not realize a return on their investment due not to the poor performance of the investment itself but rather because of expropriation risk. These studies are rooted in the commitment problem: investors in country j make decision to invest in country i1 at time t and hope to realize a return at time t+1. Once the investment has been made, politicians in country i1 have an incentive to expropriate the investment either directly through. | Report of High Level Expert Committee on Corporate Bonds and Securitization December 23 2005 Create PDF with GO2PDF for free if you wish to remove this line click here to buy Virtual PDF Printer CONTENTS Sl. No. Chapters Page 1 Introduction 3 2 Global Corporate Bond Markets 17 3 The Indian Corporate Bond Market 42 4 Asset Based Securities Market 108 5 Summary of Conclusions Recommendations 131 2 Create PDF with GO2PDF for free if you wish to remove this line click here to buy Virtual PDF Printer CHAPTER I Introduction 1. The Corporate Debt Market in India is in its infancy both in terms of microstructure as well as market outcomes. Primary issuance market is dominated by non-banking finance companies and relatively small amount of funds are raised through issuance of debt papers by manufacturing and other service industries. Bank finance is the most sought after path to fulfil the funding requirement of these companies. Secondary market activities in corporate bonds have not picked up. Efforts of Securities Exchange Board of India SEBI and the stock exchanges to bring the trading to stock exchange platforms have not yielded desired results. On the other hand the government securities market has grown exponentially during last decade due to many structural changes introduced by the Government and Reserve Bank of India to improve transparency in the market dealings method of primary auctions deepening the market with new market participants like Primary Dealers borrowings at market determined rates and creating technology platforms like NDS to recognize the institutional characteristics of the market. 2. Since the inception of the Planning era in India in 1951 project funding for Indian corporate sector was increasingly provided by Development Financial Institutions DFIs because Government encouraged setting up of a large number of development financing institutions to provide term finance at concessional rates to projects in industry. There emerged a well-knit .

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