Pre-marital Sex Essay

Effects of Premarital sex The effects of premarital sex is not limited to a physical effect, it can also be emotional and psychological. To better understand the effects of premarital sex, let’s take look first on why it is considered as a sin. According to the Bible:Premarital Sex Premarital Sex and Religion The Catholic Church teaches that premarital sex is wrong, yet it is still widely practiced around the world. The reason marriage was created was to join two people of the opposite sex together in a holy sacrament that would make the couple one. God’s reason for marriage is quoted in the bible when he said, â€Å"For this reason a man shall leave his father and his mother and be joined to his wife, and the two shall become one flesh† . The Sacrament of marriage is one of the most sacred Sacraments in the Catholic Religion. By performing premarital sex, the couple is breaking a covenant with God and is performing a sin. Marriage is the joining of a couple in the eyes of God and in the eyes of the State. When two people are joined into marriage they become on in flesh and one spirit. Sexual intercourse within marriage is for this reason good and of great blessing both to the couple, to the family and to the church. However, outside of marriage it creates a conflict of body and soul. This conflict may not at first be evident but later it can result it real soul damage occurring between the two people involved. God tells us that we should control out bodies and our lusting, â€Å"It is God’s will that you should be sanctified: that you should avoid sexual immorality; that each of you should learn to control his own body in a way that is holy and honorable, not in a passionate lust like the heathen, who do not know God†1. By performing premarital sex we are abusing our bodies and our souls. The pain that premarital sex puts on us is very evident. Physically premarital sex can lead to many things, such as pregnancy, sexually transmitted diseases, and other things that accompany premarital sex. Mentally premarital sex also hurts. Our bond with God is ruined, we lose contact with God and we are no longer part of the Church. Premarital sex goes against God’s law so our relationship with God is destroyed.

Peer Pressure, A Silent Destroyer

When people make an assessment of a teaching institution, the usual statistics will show its population size, its average success rate relative to the next high school or next university, and matters relate d to funding and facility. It is due to this that a main problem which I believe has an actual direct effect on the teaching & learning capability institution is missed out on. This problem would mean great impact on the learning curve and capacity of the student to focus and maximize the facilities given by the institution no matter how good they may be.In common terms, we call it peer pressure. I believe in fact that it is because this is so common an experience that people may downplay its actual effect on a student or turn a blind eye to what it can do. In my own experience through earlier years I stood witness to this. It could be something as simple as people being pushed around in the hallway because their growth spurt was late and they were shorter than everyone else. Or, people being teased because their pants were too short or their clothes didn’t match.These issues seem childish and light, however considering the emotional makeup of a growing child or adolescent at this point, these can birth insecurities that scar one’s capacity to bloom later on. Are these incidents common? Absolutely. In fact, it is because they are common that they are missed out on. Schools will focus on building a new gym, or increasing the number of books to be read, or fine tuning the arithmetic and language curriculum. Now, don’t get me wrong. These things are very important in the quality of the individual. However, the school’s output is only one side of the coin.The other side lies in a student’s capability to absorb and focus on the lesson at hand. How can a young individual give his or her best output into utilizing these tools, if he knows that once he steps of the classroom, the bullies will be pushing him against the locker, or t he popular girls just might make fun of her again? Call it a seeming minor detail, but to a student in the growing year, â€Å"fitting in† and â€Å"belonging† can mean everything and certainly much more than a high grade. In my own school environment, my experience was the same. Friends of mine were subject to the similar treatment.It was hard to look at, but then, the feeling at the time was that there was nothing anyone could do about it. I can only imagine how much better they would have done in school if they didn’t have to worry about these things. I’ve seen these things happen in my own world with my own eyes. I’m sure others have as well. In the newspaper or nighttime updates, every now and then we hear stories about a new student killed by fraternity hazing, or a student with a gun in school. The common reaction would be to turn away and say, â€Å"oh that wouldn’t happen in my school.† Or â€Å"gosh, it so dangerous, but go od thing it’s not in the area of my kids†. Really, would that be the same mindset of the parents and students who actually were part of the school community where the event occurred? Looking at online forums on peer pressure, various responses of how the youth today is affected are expressed, particularly the girls. Heavy alcohol drinking, smoking, taking drugs and underage sexual activity are now very widespread in the youth whether or not we agree to believe it, simply because of this desire to be accepted.Conversations among them lie more on what the next person has done or not done, rather than on planning for the future. Many of them will be at parties getting drunk where it is played off as cool. Smoking and drug use are rampant as well. Even the pressure of having sex has grown over years, despite the media’s exposed risk of unwanted pregnancies or STD’s. Friends say it is â€Å"no big deal† and talk about it as if it was just sipping a cup o f tea, and a requirement to be â€Å"normal†. So many of these issues circle the mind of a student, remain unaddressed, and cloud the student’s mind from focusing on what should be the priority at the time.It is true that school facilities are important, however equally needed, is helping the students of today actually focus on using the school to create more of a future for themselves. The question remains though on how this problem can be addressed. True, it will not be an easy task, but if at all an attempt can be made to give students guidance and support during these hears of change, then at least some of them can be given the motivation to go against the grain and not succumb to the whims of peer pressure.Friends are diaries to which we can share and unburden all of our secrets and emotions into. They can be wise and a strong pillar of strength, while at the same time can be sources of wrong influence. If a school can create a positive working environment and enc ourage right experiences and friendships, this would be a tool to help. Family is another factor. For some who have good relationships with family, allowing interaction with them can provide the child to open up and reach out.For those whose families become unbearable, then it basically remains in letting the student have someone to talk to, chat with and trust, and ensuring such person is one who is understanding and capable of meeting the child at his level, whether it be a counselor, coach or friend. The problem does not lie on morals or lessons as these which are instilled in us in earlier youth remain there. The problem is that these very principles that we have prided ourselves in and held on to no longer empower us, as they are overshadowed by the need to ‘fit in’.And as this need grows, then our mind is pushed away from focusing on what matter at the time, namely, studies and improvement of one’s skills for the future. I am thankful that somehow I made it through those years and continually make the effort to grow. My only hope is that children of the future can be given more support, that they may surpass these obstacles with more grace than many of my friends did, and focus earlier on working on their goals and dreams for their future.

Influence of Security and Trust in the Use of E-Commerce among Essay

Influence of Security and Trust in the Use of E-Commerce among Consumers in China - Essay Example M-com does influence the business activities and consumer behaviour. However, despite these factors such as ease of use and perceived value, the Chinese consumers have been slow to adopt this technology. M-com is still in its infancy in China despite a high rate of mobile phone users (Zhou, 2010). While the e-com revenues are high in China, sophisticated m-com applications are still limited despite China having a mobile subscriber base of 461 million at the end of 2006 – the highest in the world (Xu, Yan & Zheng, 2008). M-com would continue to remain a supplement to the traditional distribution channel because businesses need to develop their m-com offerings to consumers (Zhihao, 2011). Besides, not every consumer likes to shop without visiting the real stores. Investigations on the reasons need to be ascertained. Aims and objectives Several factors influence the use of m-com and these factors may differ across regions, nations and cultures. With the aim to ascertain how secur ity and trust concerns influence the intentions to use m-commerce, the objectives of the study are: To evaluate the benefits of m-com over internet shopping To evaluate the extent to which security and trust deter consumers from using m-commerce To determine the extent to which Chinese consumers use m-commerce for bill payments Literature Review Studies have been conducted on evaluating the cultural reasons why Chinese consumers have been slow in adopting m-commerce. The intentions to use m-com have been determined and Dai and Palvia (2009) found that perceived usefulness and perceived ease of use have significant influence on the Chinese consumers’ intention to use m-com. The study however, did not evaluate the reasons or factors that are responsible for low intentions to use e-com in China. One of the possible reasons cited by the authors is security and trust in m-com. Zhou (2010) finds that system quality and the information quality influence the perceived value and the p erceived ease of use of the Chinese consumers. Service quality impacts the level of trust that consumers have in using m-commerce. Switching costs and commitment can also influence m-com which has not been researched. Using mobile phones for financial transactions can bring many benefits to the banking sector but its usage is limited. It not only benefits the banks but also the consumers who can pay for remote purchasing but many systems had to be closed down (Cognet, 2010). Theoretical framework It thus appears that the intention to use depends to a large extent on the system quality, quality of the website and the content. The quality of these factors determines the level of trust that can influence the decision to use m-commerce. Hence the theoretical framework for the study would be based upon the elements of relationship marketing and the trust theory. Relationship marketing encompasses relational contracting and working partnerships. Successful relationship marketing requires mutual trust and commitment. This has become important as organizations realize that they have to collaborate to compete. Thus, to what extent the retailers have been able to generate trust among the consumers would be ascertained because this determines the confidence they would have in engaging in m-commerce. Research Design The youth are more

Career Objectives Essay Example | Topics and Well Written Essays - 250 words

Career Objectives - Essay Example As the discussion highlights managing a business requires a lot of time, dedication, effort and skill.   By going for an Executive MBA in Oxford University, he will have the opportunity to gain useful skills related to business administration without disrupting my personal goals, family life and business activities.   He believes an MBA in the Prestigious University will enable me learn in a multi-cultural and competitive environment, something that is of great value if he has to succeed beyond the borders of his country Russia. Innovation is something that drives the entrepreneur in whatever venture they engage in. An MBA from the University of Oxford will equip me with the necessary skills that are needed to view the world as a place where there are inexhaustible opportunities. Once the reporter is able to identify the opportunities that exist in the market, he will be able to make sound business decision   that will translate into profits, and possibly a better world as he s eeks to fulfill people’s needs.This essay declares that  the reporter is a person with a passion for business and would always like to see every venture that he engages in succeed greatly. As a person interested in entrepreneurship, the reporter needs to understand every aspect of business administration and management.  One of the reporter's greatest dreams is to see his company go beyond the borders of Russia and penetrate the very competitive European market.  

The Pros and Cons of the Implementation of Fat Tax in the UK Essay

The Pros and Cons of the Implementation of Fat Tax in the UK - Essay Example This essay discusses that the United Kingdom is becoming ‘fat’. According to the National Health Services (NHS), obesity is one of the biggest problems confronting UK in the 21st century; obesity causes several diseases or health problems. As this problem is growing, there are many attempts to control it. There is a suggestion in the UK that a tax on junk food is the only solution to mitigate this problem. This essay critically evaluates the arguments for and against such proposal. People who support ‘fat tax’ argue that this proposal is likely to be effective because this strategy has been used to alcohol and cigarettes quite successfully. According to Jofre, the UK is considered to be the ‘fattest’ nation in Europe. In line with this, the rate of obesity in the UK is growing steadily, and time is short, which implies that ‘fat tax’ could be the perfect solution for obesity. For instance, Denmark is one of the slimmest countries in Europe because it implemented ‘fat tax’. It is also argued that ‘fat tax’ has an impact on health for it is widely known that sugar and fat are the main reason for obesity. Thus, the basis for the proposal becomes obvious. As stated by Jofre, if the public cannot take care of their health, then the government is obliged to take action. In contrast, people who are against this proposal believe that it is their choice, and not the responsibility of the government. But what are the real advantages and disadvantages of implementing ‘fat tax’ in the UK? An obvious advantage of ‘fat tax’ is the revenue it could generate. ‘Fat tax’ would probably have to be quite large so as to make a difference on food preference, producing additional revenues (Leicester & Windmeijer 2004). Such revenues could be used for obesity prevention and treatment agendas, or to fund the promotion of nutritious foods. There is logical argument for th e possible success of implementing ‘fat tax’ in order to lessen consumption of unhealthy foods. One of the main factors affecting food preference is price, together with ease, quality, and taste, and, to a lesser degree, health (Jofre 2010). ‘Fat tax’ has been proven to be successful in Denmark. However, implementing ‘fat tax’ is difficult. It is hard to determine what foods should be taxed. However, even though difficult to implement, Denmark, and other countries, have shown success in adopting ‘fat tax’. This proposal is disapproved of by other people for wrongly troubling the poor, for poor people consume higher quantities of junk foods and would hence be held back by ‘fat tax’ (Leicester & Windmeijer 2004). Yet, poor people may profit as well since price is more precious to poor people in choosing foods to eat, and thus ‘fat tax’ may result in major change in consumption behaviour for poor people in co mparison with rich ones who can buy nutritious foods. Especially, nutritious food decisions would have to be cheap and easy to get to. If not, poor people, who remain incapable of buying nutritious foods, will either be pushed to starve or shell out more to sustain a harmful diet. If obesity is a real major problem in the UK, it is more helpful to think of other ways, since the ‘fat tax’ proposal looks weak. In particular, ‘fat taxes’ that financially support obesity prevention and treatment agendas, and complaints against food businesses, appear quite financially advantageous for the individuals supporting them, such as attorneys and public health advocates, without essentially solving the obesity crisis (Press Association 2011). What’s more, a lot of people eat wisely, so why should they be burdened of the taxes intended to discipline irresponsible consumers? And there are no sure proof that obesity is caused by the failure of food businesses to in form consumers that hamburgers and ice creams are fatty foods. It appears that the most

Anemia Research Paper Example | Topics and Well Written Essays - 1250 words

Anemia - Research Paper Example Furthermore, deficiency of vitamins such as B-12, an integral component for formation of healthy red blood cells, also cause vitamin related anemia (American Society of Hematology). Named after the sickle shape that the red blood cells acquire, this type of anemia is inherited. The host’s body is unable to make normal hemoglobin that causes the RBCs to have a crescent shape reducing ability to transfer oxygen. Having a shorter life, these cells die in 10-20 days (United States of America, Department of Health and Human Services). New cells aren’t formed fast enough to replace these dying cells. G6PD is an enzyme that induces resistance of red blood cells against materials such as sulfa, anti malarial drugs and naphthalene. Its absence causes the blood cells to burst when they come in contact with the aforementioned materials in the blood stream. The immune system itself attacks the red blood cells causing them to break down. This can take place post blood transfusion or bone marrow transplant. Major types include: autoimmune, alloimmune, and drug-induced anemia (United States of America, Department of Health and Human Services). Certain diseases such as that of kidney and liver disturb the hormonal balance of the body which consequently retards the production of red blood cells. Chemotherapy, administered to fight cancers, is also known to deter the production of red blood cells in the body causing anemia to the host. Virtually everyone is at a risk to develop anemia at one time or another during the course of one’s life. However, certain parts of society are more likely to get it than others. Almost 10% of the women going through pregnancy or having large volumes of blood loss through menstrual cycles have been identified to have anemia in US alone (American Health Journal). Moreover, people who have recently passed through major surgery, gotten into accidents causing large amount of blood

The Effect of Milling on the Triboelectrification Properties of Literature review - 1

The Effect of Milling on the Triboelectrification Properties of Flurbiprofen Salts - Literature review Example This literature review seeks to investigate some of the electrostatic concepts as well as the potential effects of milling on the triboelectrification properties of Flurbiprofen salts. Electrostatics is a phenomenon which generally involves the build up of charges on the surfaces of particles and objects which are in contact with each other. One of the most fundamental equations commonly used in electrostatics is Coulombs law which effectively describe the force between any two point electric charges. According to Coulombs law, the magnitude of electrostatic force between any two point charges is dependent on the magnitude of each charge as well as the distance between the charges. The concept of work function generally refers to minimum energy (in electronvolts) required to remove an electron from a solid and transfer it to any point outside the surface of the solid. Work function represents the least amount of energy needed to get rid of the weakest electron from its location. Consequently, electrons are often moved to a function with the lower work function of the substance with a higher work function (Bailey, 1993). Based on these rules, Elajnaf’s group (2006) suggested a triboelectric sequence where the substance with the highest sequence, but with a lower work function would experience the highest level of electropositive charge when it came in contact with the substances in the lower sequence. Contact Potential difference is an important concept that can be used to measure the changes in work function of a particle surface. An electrostatic potential usually exists between any two dissimilar electrical materials (such as conductors and semiconductors with different electron work functions) which are brought into physical contact. According to Elajnaf et al. (2006, p.102), contact surface characteristics such as surface texture, surface resistivity and contamination and particle properties such as surface resistivity, crystal properties and

The Governments Influence on Training and Development Case Study

The Governments Influence on Training and Development - Case Study Example Smithers (1993) and Green (1995) have outlined similar critiques based on international comparisons and, more recently, Prais (1995) has pointed to the inadequacy of reforms in the National Vocational Qualification (NVQ) system arguing that external testing of the individual candidate to ensure reliability and marketability of the qualification, breadth of vocational field to promote flexibility, written components of examinations to encourage mastery of general principles--are all now less adequate in Britain following NCVQ reforms than they used to be, and are far from accepted Continental procedures. (pp. 105-106). Although the NCVQ is now defunct--having been subsumed under the new overarching Qualifications and Curriculum Authority (QCA) in October 1997 (Department for Education and Employment, 1997)--its agenda established through the promotion of NVQs is still very much alive and continues to influence policy and practice. Indeed, at a time when our VET and qualifications system is undergoing radical structural reform following a number of critical reports, NVQs are, incredibly enough, being exported elsewhere (Educa, 1997a; Carvel, 1997). Just as we imported from the USA competence-based education and training (CBET) as a model for NVQs (Hyland, 1994a, b) in the 1980s and the idea of private industry councils as a blueprint for Training and Enterprise Councils (TECs) in the 1990s (Evans, 1992) at a time when they were failing and being abandoned in their country of origin, so Britain is currently trying to sell a failed and discredited NVQ system to unsuspecting overseas countries. It is i mportant that such activities are challenged and criticised both in the interests of professional ethics in VET practice and, perhaps more significantly, in accordance with the spirit of the United Nations quest for harmony in international relations. At an international conference held in London in November 1997, the British Council--through its agency British Training International and with Department for Education and Employment (DfEE) approval--was openly and unashamedly seeking to sell the NVQ system to countries from all over the world. Speaking in support of this project, the Education and Employment Secretary, David Blunkett, referred to NVQs as 'one of Britain's best-kept secrets' (Carvel, 1997, p. 13). This was a rather unfortunate and ironic choice of words by Mr Blunkett since the actual position is that the 'best-kept secret' about NVQs--at least until relatively recently--has been the fact that they have failed, comprehensively and spectacularly, to achieve any of the objectives set for them. As a way of challenging the idea of NVQ exports, it is worth highlighting some of the main weaknesses and shortcomings of the system.     

Factors affecting growth and development Essay Example for Free

Factors affecting growth and development Essay Introduction There are numerous factors that could potentially affect how an individual grows and develops. As Beyoncà © was growing up she may or may not have experienced factors that could influence on how she lives and what her future plans out to be. In this assignment, I will explain different situations for 5 life factors that may determine how someone lives. One of these is the biological factor. This is anything that affects how someone develops for example FAS. The second factor is environmental, this affects how someone develops due to their surroundings e. g. someone who is asthmatic. Thirdly is the socioeconomic factor, which according to Classroom.synonym.com (2017) â€Å"are the social and economic experiences and realities that help mold ones personality, attitudes, and lifestyle. The factor can also define refine regions and neighborhoods.† Next is the genetic factor this factor is based on things that affect an individual’s development because of their DNA. Finally is the lifestyle factor this is where the life that someone lives can affect how they develop physically, intellectually, emotionally and socially. Biological A biological factor that I would be explaining is Fetal Alcohol Syndrome (FAS), which ultimately is an avoidable condition caused by the heavy consumption of alcohol that the pregnant mother is in taking. When an individual is pregnant the baby depends on them to be able to survive and grow, this process is done from the mother passing nutrients and oxygen from her blood, into the unborn baby’s placenta which then travels to the baby’s bloodstream. The mother will also help with the removal of waste and CO from the unborn baby. When a mother drinks alcohol it gets into her bloodstream which then eventually will pass through the placenta, which separates the mothers and baby’s blood, then entering the baby’s bloodstream. Mackintosh. M (2017) says that â€Å"drinking alcohol in the first three months is linked to miscarriage and birth abnormalities.† This is due to the high rate of alcohol in the baby’s blood which reduces the rate of oxygen ca using hindering the development of the baby’s lungs, heart and brain. There are many reasons on why someone may want to drink alcohol whilst pregnant. One reason could be that they are addicted to alcohol meaning that they can’t usually stop without the help of other people. Another reason could be that the mother just simply is totally clueless of her pregnancy, therefore, has carried on as normal for the first couple of months of the pregnancy. However, for many of the different reasons, there are people who are willing to help to ensure the safety of you and the unborn baby. An individual living with FAS will normally have visible physical effects such as distinctive facial features which include: a small head, narrow eyes and a smooth philtrum (the area between the nose and top lip). However, these features are more apparent when they are younger. It is known for some people who have FAS to have learning difficulties such as such as problems with thinking, speech, social skills, timekeeping, math’s or memory and mood, attention or behavioral problems – such as autism-like behavior or attention deficit hyperactivity disorder (ADHD). (NHS.UK, 2017) According to psychiatry.emory.edu (2017), â€Å"Children and adolescent with FAS and other alcohol-related disorders may be developmentally delayed, have mental retardation or have problems with specific learning differences or disabilities. These conditions are often associated with social, emotional, behavioral, and academic problems.† When these and other deficits are not identified early in life, children may be viewed as being deliberately â€Å"bad† or having â€Å"emotional† problems when, in fact, they are unable to act in ways that caregivers ask of them. Such labels can be very damaging to self-esteem.† Environmental There are many environmental factors that could affect an individual’s development, physically, intellectually, emotionally, and socially. For this factor, I will be explaining the effects of ‘Damp and Overcrowded Housing’. Dampness in buildings are mainly caused by the condensation of moisture in the air, the moisture settles and create perfect environments for bacteria such as fungi to grow. For example, If the mold/damp is present on a painted or wallpapered wall, it would cause the paint or wallpaper to peel away from them. If the mold continues to grow, it increases the risk of respiratory problems such as coughs and asthma, this is more likely for children. Many families live in a house that thrives with mold and dampness, leaving them open to the effects. There are many children who will experience asthma attacks due to the mold and overcrowding, resulting in them missing vital days of school. Which then lowers their chances of getting good qualifications, decreasing the chances of getting well-paid jobs. Living in poor quality housing will also affect an individual’s mental state, they may end up being depressed and stressed, due to the pressures that they are put under. The effects of stress can lead to behavioral problems such as eating disorders, physical problems such as nausea and dizziness, and cognitive problems such as memory loss, (Helpguide.org, 2017). It may also result in miscarriages or premature births which isn’t really good for the mother or the child. Due to there not being enough room in the house it could cause fights and relationship pressures to occur. Living in a damp and overcrowded house can also lead to other environmental factors such as discrimination. Discrimination affects both the children and adults of the family. For example, if a child, living in a house that has damp went to school some children may bully that individual because their clothes may smell like damp. This will affect how they make friends, because they may be wary about how people will react to them due to the past or ongoing situations of where they have been bullied. â€Å"Children from low-income families often forgo events that most of us would take for granted. They miss school trips; can’t invite friends round for tea; and can’t afford a one-week holiday away from home. While studies show that there are more play areas in deprived areas, their quality is generally poorer. Vandalism, playground misuse and danger of injury all act as deterrents to using what otherwise might be good facilities.† (cpag.org, 2017) Socioeconomic Income is the money that an individual or household gets and according to myaccountingcourse.com (2017) expenditures â€Å"are payments of currency or barter credits for necessary inputs (goods or services). This could be anything from purchases equipment to hiring employees. Obligatory settlements or payment of liabilities such as invoices, receipts, and vouchers can also be considered expenditures.† Both expenditures and income can affect an individual’s life in positive and negative ways, â€Å"your income has a greater impact on your health than lifestyle choices.† (Therecord.com 2017). An individual living in a high-income family may experience many positive interactions and opportunities that people who may be living in a low-income family may not experience. However, there are some disadvantages of being in a high-income family is that others may take advantage of them, for the money. Another disadvantage that applies to both high and low-income families i s that the individuals within may start to become ungrateful towards things and not think of others. Children who live in low-income households tend to struggle more than others with a higher income in many situations in life for example education or health, this is the secondary effects of an individual being poorer. Children living in poorer households are more likely to have low attendance/punctuality at school and are also more likely to get behavior referrals due to ‘bad behavior’. Lowered attendance leads too many missed lessons which put them behind hindering their intellectual development and their behavior which is seen as socially wrong would impact on them making friends. â€Å"Education is the process of learning. It includes the difference in the level of education that somebody has received and the qualifications that somebody has,† (classroom notes, 2017). Children from around the age of 5 may start to experience being bullied, due to their family income by other children, this can cause emotional outbursts triggering them to act out or even being extremely weary and quiet. Bullying can cause an individual to be emotionally unstable which will have impacts on their sexual relationships in future life. According to jrf.org.uk, (2017) â€Å"income influences many different outcomes at the same time, including maternal mental health and children\s anxiety levels and behavior.† Someone living in a high-income family will physical dress up well and they may have the latest fashion trends, whereas someone living in a low-income family may appear to have scruffy or large clothes that may most likely be handed down from a family member. Genetic The genetic factor that I will be explaining in this assessment is cystic fibrosis (CF). Cystic fibrosis is a genetic disorder which causes a mass production of mucus to build up throughout the individual’s organs in their body. An individual will only get CF if both biological parents were carriers of the gene. This means that parents that don’t have CF have a possibility of conceiving a child who has and shows CF. this disorder is very harmfully for an individual it affects their lungs due to the buildup of mucus in the pathways which then leaves them open to infections. Cysticfibrosis.org.uk (2017), states that â€Å"Cystic fibrosis can cause the pancreas to become blocked with mucus, and when this happens enzymes required for digesting food cannot reach the stomach. People with CF often need to take more than 50 tablets a day to help digest food and keep respiratory symptoms in check.† Someone who has cystic fibrosis will have a lowered life expectancy the average life expectancy of someone one living with CF is 41years old. Cystic fibrosis affects someone’s daily life because for treatment an individual will have to go through daily routines such as physio and taken tablets. These help to control the effects of CF. â€Å"Living with a chronic disease, such as CF, can be emotionally challenging. Although moments of sadness and anxiety due to the uncertainty of your health may come and go, depression and persistent anxiety should be treated as part of your overall health and emotional wellness.† (cff.org, 2017). Due to appointments, a CF patient may experience a low attendance at school or college, the missing lesson will then have intellectual development issues on the individual because they have missed out on key information that the teacher has given out. This disadvantages that individual compared to their peers which might cause them to feel isol ated. Lifestyle For this factor, I will be explaining about the use and misuse of substances. There are 2 types of drugs that someone may use these are: medical drugs such as paracetamol are usually prescribed by a doctor, to either relieve pain or to cure illness. Mackintosh. M (2017), explains that â€Å"recreational drugs such as alcohol and tobacco are taken by people because they like the effects that they have on their bodies, but they are addictive. Heroin and cocaine are illegal recreational drugs that are very addictive.† There are 3 main categories of drugs these are depressants, stimulants, and hallucinogens (cause hallucinations or sensations and images that seem real though they are not). These will all influence an individual, however, the effects will be different depending on the type of drug that they have taken. Depressants such as alcohol and heroin tend to reduce the activity of an individual’s nervous system for a while. Some people will drink alcohol because they are feeling low/stressed, however, the effects of the alcohol cause the person to feel even lower so then they would drink some more, and the cycle will then continue. This may result in an individual beige pendant on alcohol which is a gateway to addiction. According to Wikipedia.org (2017), â€Å"alcohol intoxication affects the brain causing slurred speech and delayed reflexes.† Stimulants such as caffeine, speed up the reactions of the nervous system resulting in high performances in sports. According to Drugfre eworld.com (2017), â€Å"Stimulants can be addictive. Repeated high doses of some stimulants over a short period can lead to feelings of hostility or paranoia. Such doses may also result in dangerously high body temperatures and an irregular heartbeat.† This can cause individuals to feel socially cut off from everyone, which will affect them socially and emotionally.

Article Rebutal Essay Example for Free

Article Rebutal Essay The flu shot. Should you or shouldn’t you get one? That is a very common question to ask as flu season quickly approaches. The Mayo Clinic offers an article on their website stating that the best way to avoid the flu is primarily by means of vaccination. Does this mean one cannot avoid the flu if they don’t receive the immunization? What happens to the people who cannot afford the shot, or those who cannot access the places to receive one? Is one to be plagued by sickness if they were to go against injecting the inoculation? While the Mayo clinic itself is a reputable hospital and research facility, the article, â€Å"Flu shot: Your best bet for avoiding influenza† (Mayo 2012) offered no evidence or support for the claim. There was support for avoiding getting the flu, but no proof that the shot itself would offer such protection. After further investigation, there were numerous studies repudiating the claims that are made regarding the efficacy of the flu shot. One such study (which was actually pro-vaccination) stated that the shot only provided moderate protection and was lacking in evidence in the 65 and up age range (Lancet). In another finding, namely the leaflet that comes inside the drugs packaging, the insert for FLULAVAL states â€Å"there have been no controlled trials adequately demonstrating a decrease in influenza disease after vaccination with FLULAVAL†. Then why take it? While the side effects of the flu shot can be mild such as soreness at the injection site or aching muscles, they can also be as severe as an allergic reaction causing, guess what, flu like symptoms. Who wants that? Plus there is the chance that the vaccines don’t match the viruses circulating (Mayo). Now wait a minute, somebody is predicting the upcoming viruses and then making the immunization? How does that work? Are these same people consulting a crystal ball or palm reading the other doctors and scientists by any chance? While it may be medically necessary for a person to receive an influenza vaccination while in a hospital setting or nursing home, the bottom line is sick people get sick while healthy people do not. To avoid the flu this season, eat well, exercise regularly, manage stress and take some vitamins. Keep your hands clean by washing them regularly and avoid touching your eyes, nose and mouth whenever possible but especially if the hands are not clean. Prevention is still the best medicine and as Thomas Edison so fabulously quantified, â€Å"The doctor of the future will give no medicine, but will interest her or his patients in the care of the human frame, in a proper diet, and in the cause and prevention of disease†. References (Sept. 2012) Mayo Clinic Staff. Flu shot: Your best bet for avoiding influenza retrieved online from: http://www.mayoclinic.com/health/flu-shots/ID00017 (Jan 2012). The Lancet Infectious Diseases, Volume 12, Issue 1, Pgs 36 44, retrieved online from: http://www.naturalnews.com/033998_influenza_vaccines_effectiveness.html (Oct 2011). Adams, M. Natural News, retrieved online from: http://www.naturalnews.com/033998_influenza_vaccines_effectiveness.html

Innovative Financial Instruments

Innovative Financial Instruments Methodology Collection of secondary data: Historical data from sites of NSE, BSE, SEBI etc Getting Data from newspapers Getting data from the Various Research papers published. Collecting data from various Books available on the topic. Review of Previous Management Research Reports Getting Access to Instruments available in India from SEBI websites. Findings and Conclusions In India financial market majorly denotes equity markets. Indian debt market is not well developed and still 80% of market is under Government securities. Securitization has to be done on assets held by Banks. Bond market needs a great consideration in terms of junk bonds An effort can be made to develop Carbon Emission and National growth index. Commodities Options should be developed in India. Credit derivatives should be developed with consideration of all the possible types of Credit derivatives. In a country with major income from Agriculture, Weather derivatives should be introduced to protect the interest of various involved parties. To mitigate the Catastrophe hazards new technique for risk management should be introduced. Financial development Index to measure the developments in various parameters to conclude growth in real terms. Conclusion Despite the accelerated industrial growth experienced this decade from recent economic reforms, most major investors around the globe do not yet see India as an ideal country for foreign investment. The competition for global capital will only get tougher in the years to come, and unless the political, judicial and economic environments are right, India will lag behind many other emerging nations. More importantly, the rising expectations of the middle-class, widening income and wealth inequalities between the haves and have-nots, require efficient initiatives from Government and corporate to attract and accommodate the funds available. Variety of financial products like mutual funds, insurance, shares, debentures, derivative instruments, etc. are available in India. However, the reach of these products is very limited and the features of many of these products are very basic in nature. Further development and innovation in these products would be faster if they are accessed by all classes of investors in urban as well as rural areas. The thrust lies mainly on the development of new financial products to deepen the improvements in the product distribution itself. The responsibility of ensuring these improvements vests with all the stakeholders in the financial services industry. ABSTRACT The Indian financial market has been primarily divided into three categories namely: Equity; Debt; Derivatives. Every category has its own importance in the development of financial markets. In most of the developed nations after the development of Equity now the major focus is on Debt and Derivatives market. The reason for this focus can be many supportive benefits which accrue to a market by development of double D market. Surprisingly in financial market is used as a synonym for equity market which has completely under deployed Debt and derivative markets. The importance and potentials of debt market are still under a doubtful impression in India and no major revolution has been brought to this effect in the recent periods. Focus of more and more to just equity markets has created saturation in Indian stock market. So willingly or unwillingly now the focus has to be shifted towards other possible avenues. Some of the possible avenues have been categorized during this research conducted on various instruments which are globally available but cannot find place in Indian markets. Now these instruments are also categorized in the various forms and accrue to a specific market. Firstly the focus is laid on so called Backbone of Indian Financial system Vis the Indian equity market, which has incorporated every possible instrument which can be accommodated in Indian family of Equity instruments. Few instruments has been recognized which can be absorbed in Indian market, which can be Indian Depository Receipt (IDR), Non-Voting Shares, Cumulative convertible preference shares (CCPS), Debt-equity swap. Secondly it comes the most awaited Debt market which needs great development especially in case of corporate bonds. In India 80% of bonds are Govt. issued and 80% of remaining by institutional investors. So there has to happen lot of work by GOI (Government of India). In this few instruments which can be of utmost importance for Indian environment can be Inflation linked bonds (ILB), junk bonds, Specialized debt fund for infrastructure funding, securitization of debt. Thirdly it comes to the funds of masses i.e. pension funds and retirement schemes which are always backed by government and also has gained support from the government. In this case one of the major innovative works can be on New Pension Scheme. Fourthly, it comes to mutual funds which has the role of UTI, SEBI, RBI, AMFI and other such authorities which are regulating the workings of mutual funds in India. One of New Direction in mutual funds can be Investment funds in international Markets. Fifthly it comes to the derivatives market, which can be divided in two major forms futures and options. In future major development can be in the newly arrived concepts which can become, Instruments of masses. These include Futures on the Index of Industrial and Economy growth and Index and futures for Carbon Emission in the country. Further option market again has a lot of scope for improvements in the fields of Weather derivatives, Commodity Options, Credit derivatives. Last but not the least there is an open category which also has few innovative instruments to be captured. These can be Index for Natural Disaster and risk Management and Financial development Index. Important consideration to be noticed here is that India is a great Economy with tremendous growth opportunities has to cater with ongoing global competition in terms of capital and Money markets developments. Another important issue here is that India has to balance its Financial market with the equitable share of debt and equity. It should be open for latest and innovative types of instruments suitable for the growth and development of financial system. New concepts like Carbon Emission index should be a given a proper research and find out the ways to develop and implement it. INTRODUCTION INTEGRATION OF GLOBAL CAPITAL MARKETS In this age of globalization and liberalization domestic markets alone cannot cater to the growing needs of corporate and individuals. As a result of which there is a need of finance from various new sources which has led to the integration of world markets. As a result we have seen development of various financial products in past few years. Financial globalization has brought considerable benefits to economies and to investors and has also changed the structure of markets, creating new risks and challenges for market participants and policymakers. Globalization has also increased the scope of many new financial products. Two decades ago, someone building a new factory would probably have been restricted to borrow from a domestic bank. Today it has many more options to choose from. It can also shop around the world for loan with lower interest rate and can borrow in foreign currency if foreign-currency loans offer more attractive terms than domestic-currency loans; it can issue stocks or bonds in either domestic or international capital markets. The evolution of new financial products has increased the size of global capital markets considerably over the years. Market capitalization and year to date turnover of twenty major stock exchanges is given below : THE INDIAN CAPITAL MARKET A capital market is a place where both government and companies raise long term funds to trade securities on the bond and the stock market. It consists of both the primary market where new securities are issued among investors, and the secondary markets where already existent securities are traded. In the capital market, commodities, bonds, equities and other such investment funds are traded. There are 22 stock exchanges in India, first being the Bombay Stock Exchange (BSE), which began formal trading in 1875. Over the past few years, there has been a swift change in the Indian capital markets, especially in the secondary market. In terms of the number of companies and total market capitalization in share market, the Indian equity market is considered large relative to the countrys stage of economic development. CONVENTIONAL PRODUCTS IN INDIAN CAPITAL MARKETS EQUITY Equity shares are issued by the companies in primary market to raise capital from public and corporate houses. It provides a share in the earnings of the company and the equity shareholder can participate in decision making of the company also. There are three basic types of equity: Common stock or ordinary shares [1] Common stock, as it is known in the United States, or ordinary shares, according to British terminology, is the most important form of equity investment. An owner of common stock is part owner of the enterprise and is entitled to vote on certain important matters, including the selection of directors. Common stock holders benefit most from improvement in the firms business prospects. But they have a claim on the firms income and assets only after all creditors and all preferred stock holders receive payment. Some firms have more than one class of common stock, in which case the stock of one class may be entitled to greater voting rights, or to larger dividends, than stock of another class. This is often the case with family owned firms which sell stock to the public in a way that enables the family to maintain control through its ownership of stock with superior voting rights. Preferred stock [2] Also called preference shares, preferred stock is more akin to bonds than to common stock. Like bonds, preferred stock offers specified payments on specified dates. Preferred stock appeals to issuers because the dividend remains constant for as long as the stock is outstanding, which may be in perpetuity. Some investors favor preferred stock over bonds because the periodic payments are formally considered dividends rather than interest payments, and may therefore offer tax advantages. The issuer is obliged to pay dividends to preferred stock holders before paying dividends to common shareholders. If the preferred stock is cumulative, unpaid dividends may accrue until preferred stock holders have received full payment. In the case of non cumulative preferred stock, preferred stock holders may be able to impose significant restrictions on the firm in the event of a missed dividend. Warrants [3] Warrants offer the holder the opportunity to purchase a firms common stock during a specified time period in future, at a predetermined price, known as the exercise price or strike price. The tangible value of a warrant is the market price of the stock less the strike price. If the tangible value when the warrants are exercisable is zero or less the warrants have no value, as the stock can be acquired more cheaply in the open market. A firm may sell warrants directly, but more often they are incorporated into other securities, such as preferred stock or bonds. Warrants are created and sold by the firm that issues the underlying stock. In a rights offering, warrants are allotted to existing stock holders in proportion to their current holdings. If all shareholders subscribe to the offering the firms total capital will increase, but each stock holders proportionate ownership will not change. The stock holder is free not to subscribe to the offering or to pass the rights to others. In t he UK a stock holder chooses not to subscribe by filing a letter of renunciation with the issuer. RECENT DEVELOPMENT IN EQUITY MARKET Free pricing- The abolition of office of the controller of capital issue resulted in the emergence of new era in primary markets. All controls on designing, pricing and tenure were abolished. The investors were given the freedom to price an instrument. Entry Norms- Hitherto no restrictions for a company to tap the capital markets. This resulted in massive surge of small cap issues. The need for transparent free entry was felt by SEBI. Disclosures- the quality of disclosure in the offer document was really poor. A lot of vital adverse information was not disclosed. SEBI stringent discloser norms were introduced. Book Building- It is the process of price discovery. One of the drawbacks of free pricing was price mechanism. The issue price has to be decided around 60-70 days before the opening at issue. Introduction to price building has overcome the limitation of price mechanism. Streamlining the procedures- all the procedures was streamlined. Many aspects of the operations have been made transparent. SCOPE OF FURTHER EQUITY INSTRUMENTS INDIAN DEPOSITORY RECEIPTS (IDR) After the success of American Depository Receipts and Global Depository Receipts the Indian regulatory body, SEBI also allowed foreign companies to raise capital in India through INDIAN DEPOSITORY RECEIPTS (IDRs). IDRs can be understood as a mirror image of well-known ADRs/GDRs. In an IDR, foreign companies issue the shares to an Indian Depository, which would, issue Depository Receipts to investors in India. The Depository Receipts would be listed in Indian stock exchanges and would be freely transferable. The actual shares of the IDRs would be held by an Overseas Custodian, who shall authorize the Indian Depository to issue the IDRs. The Overseas Custodian must be a foreign bank having business in India and needs approval from the Finance Ministry for acting as a custodian while the Indian Depository needs to be registered with the SEBI. Following rules were established by SEBI for listing through IDR: ISSUERS ELIGIBILITY CRITERIA: [4] Must have an average; turnover of US$ 500 million during the previous 3 financial years. Must have capital and free reserves which must aggregate to at least US$100 million. Must be making a profit for the previous 5 years and must have declared a dividend of 10% in each such year. The pre issue debt-equity ratio must be not more than 2:1. Must be listed in its home country. Must not be prohibited by any regulatory body to issue securities Must have a good track record with compliance with securities market regulations. Must comply with any additional criteria set by SEBI REASONS FOR DORMANCY IN ISSUE OF IDR: Stringent rules set by SEBI made foreign companies stay away from Indian market. The rules were made more stringent after the Global economic crisis. Availability of easy funds in foreign markets. Rate of interest in foreign banks is also less which made them prime source of funds for companies. Uncertainty of subscription in Indian markets. Indian companies have been highly active in foreign markets by raising funds through ADR and GDR but till date no foreign company has raised money through IDRs. Standard Chartered is the first company to allow its plan to issue IDR and has received the clearance from RBI also. The bank has yet to announce the size of the IDR issue, though the figures are expected to vary from Rs 2,500 to Rs 5,000 crore. Non -Voting Shares A non- voting share is more or less similar to the ordinary equity shares except the voting rights. It is different from a preference share in the sense that in case of a possible winding up of the company, the preference shareholders get their shares of dividends repaid before the owners of the non-voting shareholders. The companies with the constant track record and a strong dividend history can issue these kinds of instruments. They are basically focused to small investors who are normally not interested in the management of the firm. Hence non promoting share are a good tool for the promoters of the company to increase the share capital without diluting the control. However if the company does not fulfill the commitment of higher dividend then these shares are automatically converted to shares with voting rights. Hence it is very important for the companies to assess the characteristics of future cash flow and determine whether paying a higher rate of dividend is practicable for them or not. Debt for equity and equity for debt swaps Adebt for equity swapis not an instrument but a situation where a company offers its shareholders and creditors debt in exchange for equity or stock. The value of the stock is determined on current market rates. The company may, however, offer a higher value to attract more shareholders and debt holders to participate in the swap. Equity for debt swapis the opposite of the above process. In this swap, the creditors to the company agree to exchange the debt for equity in the business. How do creditors benefit Creditors such as banks and other financial institutions provide capital to large businesses. If the business gets into financial trouble, it may sometimes not be a good idea to allow the company to close down and go bankrupt. In these situations, these creditors find it easier to allow the business to take the form of going concern and become the shareholders in this business. The debt or the assets of the company may be so big that there would be no any profit or advantage to the banks in seeking its closure. At times, the company may also be seeking a restructuring of its capital for certain reasons. These include meeting contractual obligations, taking advantage of current stock valuation in the market or to avoid making coupon and face value payments. How debt for equity swap takes place Let us assume that a shareholder or investor of some company has $1000 worth of stock. The company offers the option to swap equity withdebtat a rate of 1:1. This means that for $1000 worth of stock, the investor would get $1000 worth of debt or bonds in the company. At times, the company may offer a ratio of 1:2 to attract more stock for its debt. This could mean an additional gain in the form of $1000 worth of stock for the investor. But it is also important to note that the investor would lose their rights as a shareholder, the moment he swaps his stock orequity for debt. Original shareholders often find themselves deprived of their voting rights when such swaps take place. DEBT MARKET Traditionally, the Indian capital markets are more synonymous with the equity markets both on account of the common investors preferences and the huge capital gains it offered no matter what the risks involved are. On the other hand, the investors preference for debt market has been relatively a recent phenomenon an outcome of the shift in the economic policy, whereby the market forces have been accorded a greater leeway in influencing the resource allocation. If we talk about the Indian debt market bond market has formed its own place in the financial systems. All the recent developments are accrued to bonds market in India. Size of debt market If we look at worldwide scenario, debt markets are three to four times larger than equity markets. However, the debt market in India is very small in comparison to the equity market. This is because the domestic debt market has been deregulated and liberalized only recently and is at a relatively nascent stage of development. Interest rate deregulation The last two decades witnessed a gradual maturing of Indias financial markets. Since 1991, key steps were taken to reform the Indian financial markets. With the introduction of auction systems for rising Government debt in the 1990s, along with the decision to put an end to the monetization of Government deficits, started the gradual process of deregulation of interest rates. While the immediate effect of deregulation of interest rates was associated with rising interest rates, deft debt management policy by the RBI and the improvements in the market micro structure saw a gradual decline in the interest rates. Abolition of tax deduction at source Tax deduction at source (TDS) used to be major barrier to the development of the government securities market in India. Recognizing this, the RBI convinced the Government to abolish it. The removal of TDS on Government securities was apparently a small but a major reform in removing pricing distortions for Government securities. Introduction of auctions For Auctions a major policy shift from administered interest rate regime to a market based regime, the choice of auction system needed to be carefully drawn, in order to give a comfort level to the government as a borrower as also to moderate the risks that might be faced by the uninitiated market participants. Accordingly, it was decided to begin with the sealed bid auction system with a post bid reserve price (since the RBI as an agent to government participates in the auctions as a non-competitive bidder.) Banks investments in Government securities valuation/accounting norms Concomitantly, regulatory initiatives in introducing international best practices in valuation/accounting norms for the banks investment portfolios (comprising mainly government securities) also necessitated the banks to mark to market their investment portfolios and forced them to actively trade. This gave an added impetus to the incipient trading activity. Consolidation of stocks Primary issuance strategy was further fine tuned towards issuance of benchmark securities to improve liquidity. Alignment of coupon payment dates for the new issuances has been consciously attempted to promote stripping of government securities (STRIPS), which if once materializes, can facilitate the establishment of zero coupon yield curve and also can take care of the segmental needs in terms of asset liability matching. Zero coupon curve for pricing[5] To bring further improvements in the pricing mechanism in debt market, a need was felt to promote a zero coupon yield curve (ZCYC). As indicated earlier, STRIPS (Separate Trading of Registered Interest and Principal of Securities) can facilitate a ZCYC. This curve is being used for pricing NSEs interest rate futures transactions. FIMMDA/PDAI, publishes a monthly ZCYC for the market participants to value their government securities portfolios. However, the ZCYC based pricing has not been popular with the Indian market participants. SCOPE OF INNOVATIONS IN BOND MARKET Inflation linked bonds (ILB)[6] The recent Monetary Policy released by RBI laid its thrust on controlling the spiraling inflation, especially the food price inflation. One of the reasons behind the CRR hike was to curtail the rising inflationary expectations (higher expected price trends) In the past RBI has been concerned about the fact that a common man does not have any protection against rising prices, Vis No Inflation Hedge. The common man has to rely on traditional but inefficient methods to hedge the real inflation risks, such as Gold and real assets such as commodities or real estate or even excessive stocking of goods In developed markets like US, the government has issues Treasury Inflation Protected Securities known as TIPS. Globally more than USD 1 trillion worth inflation linked bonds must be outstanding. Inflation linked bonds (ILB) securities give an opportunity to market participants and investors to hedge against inflation. The coupon (interest rate) of ILB is fixed but the underlying principal would move in tandem with the inflation levels in the country. At redemption of the securities the higher of the value (adding inflation) thus arrived or face value is paid off. Banks and Financial Institutions usually buy wholesale and create retail market for such securities. With right access retail investor can easily buy such securities to protect himself from inflation and this could have following advantage to investors and the government. The inflation linked bonds can make the governments accountable for higher inflation since the cost of borrowings will be linked to inflation (if coupon paid is inflation hedged). Rising inflation will also raise the repayment of inflation linked bonds. It will help government to broaden the investor base by offering inflation linked bonds at the retail level, where the participation now is minimal. Government can diversify the debt service costs in a deflationary (falling prices) scenario. It is very likely that the existence of inflation linked bonds might reduce the inflation risk premium embedded in government bonds. For the inflation linked bonds to be an effective hedge GOI should ensure that the underlying inflation index is representative of real or actual inflation on the streets. RBI can precisely quantify control the inflationary expectations embedded in the economy as well as in the markets. RBI can use inferences from trading in such bonds in formulating its monetary policy stance The onus on monetary policy tools such as interest rates, to contain inflation will reduce if RBI can guide or influence the inflationary expectations through the demand/supply of inflation linked bonds and with an excellent communication policy. For Investors in general, inflation linked bonds would provide distinct advantages: It allows investors to hedge the purchasing power (inflation) risk. The capital is inflation risk protected and the income (coupon) can be structured that way too. Inflation linked bonds universally are regarded as a separate asset class would provide diversification benefits to a portfolio due to its negative co relation with returns from traditional asset classes. Such bonds provide positive risk reward relationship too. Inflation linked bonds are effective vehicle for hedging risks for institutional investors, where the long term liabilities are inflation linked or linked to future wage levels or banks who face the inflation risk on their assets side due to their GOI Bond holdings. Access of FIIs to the inflation linked bonds can allow them to hedge their inflation risks in India which are currently expressed in the currency markets. The USD/INR (currency) volatility can hence come down hence. Junk bonds Sharp movements in the Indian equity market may be par for the course. But when it comes to the market for corporate bonds, its constantly stagnant. The reason is, we dont have a corporate bond market. But this is overwhelmingly dominated by government securities (about 80% of the total). Of the remaining, close to 80% again comprises privately placed debt of public financial institutions. An efficient bond market helps corporate reduce their financing costs. It enables companies to borrow directly from investors, bypassing the major intermediary role of a commercial bank. One of the important instruments in corporate market is Junk Bonds which could be great source of financing for countries like India where markets are not much regulated. A speculative bond rated BB or below. Junk bonds are generally issued by corporations of questionable financial strength or without proven track records. They tend to be more volatile and higher yielding than bonds with superior quality ratings.Junk bond funds emphasize diversified investments in these low-rated, high-yielding debt issues. Thus, these are high-yielding, high-risk securities issued by companies with less robust finances.[7] Need for Junk Bonds in India The major issue amongst Indian bond markets has been how companies with poorer ratings can raise funds. At times the banks and FIs are reluctant to invest in even the AAA-rated companies. In fact for progress of a developing nation like India, this would give a wonderful opportunity for the smaller companies to get funds and implement their ideas. However, a proper regulatory mechanism also needs to be set-up to avoid high risk of default in the case of junk bonds. Currently, there are only two instruments that FIIs can invest in India, i.e., equity and debt. The cap on FII debt investment varies from time to time between $1.5 billion and $2 billion. The Asset Reconstruction Company of India Ltd. (ARCIL), Indias first asset reconstruction company, has vied for permitting FIIs to invest in a new instrument in India distressed assets. ARCIL has recommended SEBI, RBI and the Finance Ministry to allow FII investment in a new category, which is neither equity nor debt but a separate lucrative instrument security receipts with underlying distressed assets. Proposed Junk Bond Market in India Scenario (Optimistic Realistic) Anoptimistic scenariowould be having junk bonds in the market ideally for funding by FIIs and Institutions for financing the small Indian companies. However, considering the risk associated with these bonds it might not be possible in near future because economy is still in its nascent phase and on a fast development track.So any move which is risky and can affect future inflows of foreign funds and investor confidence would not be ideal. The only way an investor should invest in junk bonds is by diversifying. A selection of at least half a dozen issues will afford the investor some protection. High risk is inherent in high yield bonds. Nevertheless, your portfolio may well have a place for some of these securities if you are not risk-averse. By having junk bond markets, it would in fact signify deepening and maturing of Indian debt markets. In India, companies are hamstrung by the fact that investment relaxations may come in only when the debt markets get deeper, so that insurance companies can increase their portfolio yield without exposing themselves to risk for long tenures by investing in junk bonds. Impact of Junk Bonds on Indian Economy[8] A well-functioning corporate bond market allows firms to tailor their assets and liability profiles. If companies fear they will not be able to raise long-term resources, they are likely to stay away from long-term investments or entrepreneurial ventures that have a long-term payoff. In the long run, this can affect economic growth. The corporate bond and the junk bond market could fill this vacuum. In the absence of a corporate bond market, a large part of debt funding comes from banks. In the process, banks assume a significant amount of risk due to maturity mismatch between short-term deposits that can be readily withdrawn and relatively long-term illiquid loan assets resulting in high NPAs. An active and efficient bond market gives companies an alternative means of raising debt capital in the event of a credit crunch. It also leads to better pricing of credit risk (since expectations of all market participants are incorporated into bond prices). FIIs are major players in the equities market. However, thanks to the ceiling on their investment in the debt market (currently, there is a cumulative sub-ceiling of $0.5 bn on investment in corporate debt), they are present only in a limited way in the bond market. Pension funds and the insurance sector could be another constituency, but the absence of pension funds and low insurance penetration has meant limited demand for lon Innovative Financial Instruments Innovative Financial Instruments Methodology Collection of secondary data: Historical data from sites of NSE, BSE, SEBI etc Getting Data from newspapers Getting data from the Various Research papers published. Collecting data from various Books available on the topic. Review of Previous Management Research Reports Getting Access to Instruments available in India from SEBI websites. Findings and Conclusions In India financial market majorly denotes equity markets. Indian debt market is not well developed and still 80% of market is under Government securities. Securitization has to be done on assets held by Banks. Bond market needs a great consideration in terms of junk bonds An effort can be made to develop Carbon Emission and National growth index. Commodities Options should be developed in India. Credit derivatives should be developed with consideration of all the possible types of Credit derivatives. In a country with major income from Agriculture, Weather derivatives should be introduced to protect the interest of various involved parties. To mitigate the Catastrophe hazards new technique for risk management should be introduced. Financial development Index to measure the developments in various parameters to conclude growth in real terms. Conclusion Despite the accelerated industrial growth experienced this decade from recent economic reforms, most major investors around the globe do not yet see India as an ideal country for foreign investment. The competition for global capital will only get tougher in the years to come, and unless the political, judicial and economic environments are right, India will lag behind many other emerging nations. More importantly, the rising expectations of the middle-class, widening income and wealth inequalities between the haves and have-nots, require efficient initiatives from Government and corporate to attract and accommodate the funds available. Variety of financial products like mutual funds, insurance, shares, debentures, derivative instruments, etc. are available in India. However, the reach of these products is very limited and the features of many of these products are very basic in nature. Further development and innovation in these products would be faster if they are accessed by all classes of investors in urban as well as rural areas. The thrust lies mainly on the development of new financial products to deepen the improvements in the product distribution itself. The responsibility of ensuring these improvements vests with all the stakeholders in the financial services industry. ABSTRACT The Indian financial market has been primarily divided into three categories namely: Equity; Debt; Derivatives. Every category has its own importance in the development of financial markets. In most of the developed nations after the development of Equity now the major focus is on Debt and Derivatives market. The reason for this focus can be many supportive benefits which accrue to a market by development of double D market. Surprisingly in financial market is used as a synonym for equity market which has completely under deployed Debt and derivative markets. The importance and potentials of debt market are still under a doubtful impression in India and no major revolution has been brought to this effect in the recent periods. Focus of more and more to just equity markets has created saturation in Indian stock market. So willingly or unwillingly now the focus has to be shifted towards other possible avenues. Some of the possible avenues have been categorized during this research conducted on various instruments which are globally available but cannot find place in Indian markets. Now these instruments are also categorized in the various forms and accrue to a specific market. Firstly the focus is laid on so called Backbone of Indian Financial system Vis the Indian equity market, which has incorporated every possible instrument which can be accommodated in Indian family of Equity instruments. Few instruments has been recognized which can be absorbed in Indian market, which can be Indian Depository Receipt (IDR), Non-Voting Shares, Cumulative convertible preference shares (CCPS), Debt-equity swap. Secondly it comes the most awaited Debt market which needs great development especially in case of corporate bonds. In India 80% of bonds are Govt. issued and 80% of remaining by institutional investors. So there has to happen lot of work by GOI (Government of India). In this few instruments which can be of utmost importance for Indian environment can be Inflation linked bonds (ILB), junk bonds, Specialized debt fund for infrastructure funding, securitization of debt. Thirdly it comes to the funds of masses i.e. pension funds and retirement schemes which are always backed by government and also has gained support from the government. In this case one of the major innovative works can be on New Pension Scheme. Fourthly, it comes to mutual funds which has the role of UTI, SEBI, RBI, AMFI and other such authorities which are regulating the workings of mutual funds in India. One of New Direction in mutual funds can be Investment funds in international Markets. Fifthly it comes to the derivatives market, which can be divided in two major forms futures and options. In future major development can be in the newly arrived concepts which can become, Instruments of masses. These include Futures on the Index of Industrial and Economy growth and Index and futures for Carbon Emission in the country. Further option market again has a lot of scope for improvements in the fields of Weather derivatives, Commodity Options, Credit derivatives. Last but not the least there is an open category which also has few innovative instruments to be captured. These can be Index for Natural Disaster and risk Management and Financial development Index. Important consideration to be noticed here is that India is a great Economy with tremendous growth opportunities has to cater with ongoing global competition in terms of capital and Money markets developments. Another important issue here is that India has to balance its Financial market with the equitable share of debt and equity. It should be open for latest and innovative types of instruments suitable for the growth and development of financial system. New concepts like Carbon Emission index should be a given a proper research and find out the ways to develop and implement it. INTRODUCTION INTEGRATION OF GLOBAL CAPITAL MARKETS In this age of globalization and liberalization domestic markets alone cannot cater to the growing needs of corporate and individuals. As a result of which there is a need of finance from various new sources which has led to the integration of world markets. As a result we have seen development of various financial products in past few years. Financial globalization has brought considerable benefits to economies and to investors and has also changed the structure of markets, creating new risks and challenges for market participants and policymakers. Globalization has also increased the scope of many new financial products. Two decades ago, someone building a new factory would probably have been restricted to borrow from a domestic bank. Today it has many more options to choose from. It can also shop around the world for loan with lower interest rate and can borrow in foreign currency if foreign-currency loans offer more attractive terms than domestic-currency loans; it can issue stocks or bonds in either domestic or international capital markets. The evolution of new financial products has increased the size of global capital markets considerably over the years. Market capitalization and year to date turnover of twenty major stock exchanges is given below : THE INDIAN CAPITAL MARKET A capital market is a place where both government and companies raise long term funds to trade securities on the bond and the stock market. It consists of both the primary market where new securities are issued among investors, and the secondary markets where already existent securities are traded. In the capital market, commodities, bonds, equities and other such investment funds are traded. There are 22 stock exchanges in India, first being the Bombay Stock Exchange (BSE), which began formal trading in 1875. Over the past few years, there has been a swift change in the Indian capital markets, especially in the secondary market. In terms of the number of companies and total market capitalization in share market, the Indian equity market is considered large relative to the countrys stage of economic development. CONVENTIONAL PRODUCTS IN INDIAN CAPITAL MARKETS EQUITY Equity shares are issued by the companies in primary market to raise capital from public and corporate houses. It provides a share in the earnings of the company and the equity shareholder can participate in decision making of the company also. There are three basic types of equity: Common stock or ordinary shares [1] Common stock, as it is known in the United States, or ordinary shares, according to British terminology, is the most important form of equity investment. An owner of common stock is part owner of the enterprise and is entitled to vote on certain important matters, including the selection of directors. Common stock holders benefit most from improvement in the firms business prospects. But they have a claim on the firms income and assets only after all creditors and all preferred stock holders receive payment. Some firms have more than one class of common stock, in which case the stock of one class may be entitled to greater voting rights, or to larger dividends, than stock of another class. This is often the case with family owned firms which sell stock to the public in a way that enables the family to maintain control through its ownership of stock with superior voting rights. Preferred stock [2] Also called preference shares, preferred stock is more akin to bonds than to common stock. Like bonds, preferred stock offers specified payments on specified dates. Preferred stock appeals to issuers because the dividend remains constant for as long as the stock is outstanding, which may be in perpetuity. Some investors favor preferred stock over bonds because the periodic payments are formally considered dividends rather than interest payments, and may therefore offer tax advantages. The issuer is obliged to pay dividends to preferred stock holders before paying dividends to common shareholders. If the preferred stock is cumulative, unpaid dividends may accrue until preferred stock holders have received full payment. In the case of non cumulative preferred stock, preferred stock holders may be able to impose significant restrictions on the firm in the event of a missed dividend. Warrants [3] Warrants offer the holder the opportunity to purchase a firms common stock during a specified time period in future, at a predetermined price, known as the exercise price or strike price. The tangible value of a warrant is the market price of the stock less the strike price. If the tangible value when the warrants are exercisable is zero or less the warrants have no value, as the stock can be acquired more cheaply in the open market. A firm may sell warrants directly, but more often they are incorporated into other securities, such as preferred stock or bonds. Warrants are created and sold by the firm that issues the underlying stock. In a rights offering, warrants are allotted to existing stock holders in proportion to their current holdings. If all shareholders subscribe to the offering the firms total capital will increase, but each stock holders proportionate ownership will not change. The stock holder is free not to subscribe to the offering or to pass the rights to others. In t he UK a stock holder chooses not to subscribe by filing a letter of renunciation with the issuer. RECENT DEVELOPMENT IN EQUITY MARKET Free pricing- The abolition of office of the controller of capital issue resulted in the emergence of new era in primary markets. All controls on designing, pricing and tenure were abolished. The investors were given the freedom to price an instrument. Entry Norms- Hitherto no restrictions for a company to tap the capital markets. This resulted in massive surge of small cap issues. The need for transparent free entry was felt by SEBI. Disclosures- the quality of disclosure in the offer document was really poor. A lot of vital adverse information was not disclosed. SEBI stringent discloser norms were introduced. Book Building- It is the process of price discovery. One of the drawbacks of free pricing was price mechanism. The issue price has to be decided around 60-70 days before the opening at issue. Introduction to price building has overcome the limitation of price mechanism. Streamlining the procedures- all the procedures was streamlined. Many aspects of the operations have been made transparent. SCOPE OF FURTHER EQUITY INSTRUMENTS INDIAN DEPOSITORY RECEIPTS (IDR) After the success of American Depository Receipts and Global Depository Receipts the Indian regulatory body, SEBI also allowed foreign companies to raise capital in India through INDIAN DEPOSITORY RECEIPTS (IDRs). IDRs can be understood as a mirror image of well-known ADRs/GDRs. In an IDR, foreign companies issue the shares to an Indian Depository, which would, issue Depository Receipts to investors in India. The Depository Receipts would be listed in Indian stock exchanges and would be freely transferable. The actual shares of the IDRs would be held by an Overseas Custodian, who shall authorize the Indian Depository to issue the IDRs. The Overseas Custodian must be a foreign bank having business in India and needs approval from the Finance Ministry for acting as a custodian while the Indian Depository needs to be registered with the SEBI. Following rules were established by SEBI for listing through IDR: ISSUERS ELIGIBILITY CRITERIA: [4] Must have an average; turnover of US$ 500 million during the previous 3 financial years. Must have capital and free reserves which must aggregate to at least US$100 million. Must be making a profit for the previous 5 years and must have declared a dividend of 10% in each such year. The pre issue debt-equity ratio must be not more than 2:1. Must be listed in its home country. Must not be prohibited by any regulatory body to issue securities Must have a good track record with compliance with securities market regulations. Must comply with any additional criteria set by SEBI REASONS FOR DORMANCY IN ISSUE OF IDR: Stringent rules set by SEBI made foreign companies stay away from Indian market. The rules were made more stringent after the Global economic crisis. Availability of easy funds in foreign markets. Rate of interest in foreign banks is also less which made them prime source of funds for companies. Uncertainty of subscription in Indian markets. Indian companies have been highly active in foreign markets by raising funds through ADR and GDR but till date no foreign company has raised money through IDRs. Standard Chartered is the first company to allow its plan to issue IDR and has received the clearance from RBI also. The bank has yet to announce the size of the IDR issue, though the figures are expected to vary from Rs 2,500 to Rs 5,000 crore. Non -Voting Shares A non- voting share is more or less similar to the ordinary equity shares except the voting rights. It is different from a preference share in the sense that in case of a possible winding up of the company, the preference shareholders get their shares of dividends repaid before the owners of the non-voting shareholders. The companies with the constant track record and a strong dividend history can issue these kinds of instruments. They are basically focused to small investors who are normally not interested in the management of the firm. Hence non promoting share are a good tool for the promoters of the company to increase the share capital without diluting the control. However if the company does not fulfill the commitment of higher dividend then these shares are automatically converted to shares with voting rights. Hence it is very important for the companies to assess the characteristics of future cash flow and determine whether paying a higher rate of dividend is practicable for them or not. Debt for equity and equity for debt swaps Adebt for equity swapis not an instrument but a situation where a company offers its shareholders and creditors debt in exchange for equity or stock. The value of the stock is determined on current market rates. The company may, however, offer a higher value to attract more shareholders and debt holders to participate in the swap. Equity for debt swapis the opposite of the above process. In this swap, the creditors to the company agree to exchange the debt for equity in the business. How do creditors benefit Creditors such as banks and other financial institutions provide capital to large businesses. If the business gets into financial trouble, it may sometimes not be a good idea to allow the company to close down and go bankrupt. In these situations, these creditors find it easier to allow the business to take the form of going concern and become the shareholders in this business. The debt or the assets of the company may be so big that there would be no any profit or advantage to the banks in seeking its closure. At times, the company may also be seeking a restructuring of its capital for certain reasons. These include meeting contractual obligations, taking advantage of current stock valuation in the market or to avoid making coupon and face value payments. How debt for equity swap takes place Let us assume that a shareholder or investor of some company has $1000 worth of stock. The company offers the option to swap equity withdebtat a rate of 1:1. This means that for $1000 worth of stock, the investor would get $1000 worth of debt or bonds in the company. At times, the company may offer a ratio of 1:2 to attract more stock for its debt. This could mean an additional gain in the form of $1000 worth of stock for the investor. But it is also important to note that the investor would lose their rights as a shareholder, the moment he swaps his stock orequity for debt. Original shareholders often find themselves deprived of their voting rights when such swaps take place. DEBT MARKET Traditionally, the Indian capital markets are more synonymous with the equity markets both on account of the common investors preferences and the huge capital gains it offered no matter what the risks involved are. On the other hand, the investors preference for debt market has been relatively a recent phenomenon an outcome of the shift in the economic policy, whereby the market forces have been accorded a greater leeway in influencing the resource allocation. If we talk about the Indian debt market bond market has formed its own place in the financial systems. All the recent developments are accrued to bonds market in India. Size of debt market If we look at worldwide scenario, debt markets are three to four times larger than equity markets. However, the debt market in India is very small in comparison to the equity market. This is because the domestic debt market has been deregulated and liberalized only recently and is at a relatively nascent stage of development. Interest rate deregulation The last two decades witnessed a gradual maturing of Indias financial markets. Since 1991, key steps were taken to reform the Indian financial markets. With the introduction of auction systems for rising Government debt in the 1990s, along with the decision to put an end to the monetization of Government deficits, started the gradual process of deregulation of interest rates. While the immediate effect of deregulation of interest rates was associated with rising interest rates, deft debt management policy by the RBI and the improvements in the market micro structure saw a gradual decline in the interest rates. Abolition of tax deduction at source Tax deduction at source (TDS) used to be major barrier to the development of the government securities market in India. Recognizing this, the RBI convinced the Government to abolish it. The removal of TDS on Government securities was apparently a small but a major reform in removing pricing distortions for Government securities. Introduction of auctions For Auctions a major policy shift from administered interest rate regime to a market based regime, the choice of auction system needed to be carefully drawn, in order to give a comfort level to the government as a borrower as also to moderate the risks that might be faced by the uninitiated market participants. Accordingly, it was decided to begin with the sealed bid auction system with a post bid reserve price (since the RBI as an agent to government participates in the auctions as a non-competitive bidder.) Banks investments in Government securities valuation/accounting norms Concomitantly, regulatory initiatives in introducing international best practices in valuation/accounting norms for the banks investment portfolios (comprising mainly government securities) also necessitated the banks to mark to market their investment portfolios and forced them to actively trade. This gave an added impetus to the incipient trading activity. Consolidation of stocks Primary issuance strategy was further fine tuned towards issuance of benchmark securities to improve liquidity. Alignment of coupon payment dates for the new issuances has been consciously attempted to promote stripping of government securities (STRIPS), which if once materializes, can facilitate the establishment of zero coupon yield curve and also can take care of the segmental needs in terms of asset liability matching. Zero coupon curve for pricing[5] To bring further improvements in the pricing mechanism in debt market, a need was felt to promote a zero coupon yield curve (ZCYC). As indicated earlier, STRIPS (Separate Trading of Registered Interest and Principal of Securities) can facilitate a ZCYC. This curve is being used for pricing NSEs interest rate futures transactions. FIMMDA/PDAI, publishes a monthly ZCYC for the market participants to value their government securities portfolios. However, the ZCYC based pricing has not been popular with the Indian market participants. SCOPE OF INNOVATIONS IN BOND MARKET Inflation linked bonds (ILB)[6] The recent Monetary Policy released by RBI laid its thrust on controlling the spiraling inflation, especially the food price inflation. One of the reasons behind the CRR hike was to curtail the rising inflationary expectations (higher expected price trends) In the past RBI has been concerned about the fact that a common man does not have any protection against rising prices, Vis No Inflation Hedge. The common man has to rely on traditional but inefficient methods to hedge the real inflation risks, such as Gold and real assets such as commodities or real estate or even excessive stocking of goods In developed markets like US, the government has issues Treasury Inflation Protected Securities known as TIPS. Globally more than USD 1 trillion worth inflation linked bonds must be outstanding. Inflation linked bonds (ILB) securities give an opportunity to market participants and investors to hedge against inflation. The coupon (interest rate) of ILB is fixed but the underlying principal would move in tandem with the inflation levels in the country. At redemption of the securities the higher of the value (adding inflation) thus arrived or face value is paid off. Banks and Financial Institutions usually buy wholesale and create retail market for such securities. With right access retail investor can easily buy such securities to protect himself from inflation and this could have following advantage to investors and the government. The inflation linked bonds can make the governments accountable for higher inflation since the cost of borrowings will be linked to inflation (if coupon paid is inflation hedged). Rising inflation will also raise the repayment of inflation linked bonds. It will help government to broaden the investor base by offering inflation linked bonds at the retail level, where the participation now is minimal. Government can diversify the debt service costs in a deflationary (falling prices) scenario. It is very likely that the existence of inflation linked bonds might reduce the inflation risk premium embedded in government bonds. For the inflation linked bonds to be an effective hedge GOI should ensure that the underlying inflation index is representative of real or actual inflation on the streets. RBI can precisely quantify control the inflationary expectations embedded in the economy as well as in the markets. RBI can use inferences from trading in such bonds in formulating its monetary policy stance The onus on monetary policy tools such as interest rates, to contain inflation will reduce if RBI can guide or influence the inflationary expectations through the demand/supply of inflation linked bonds and with an excellent communication policy. For Investors in general, inflation linked bonds would provide distinct advantages: It allows investors to hedge the purchasing power (inflation) risk. The capital is inflation risk protected and the income (coupon) can be structured that way too. Inflation linked bonds universally are regarded as a separate asset class would provide diversification benefits to a portfolio due to its negative co relation with returns from traditional asset classes. Such bonds provide positive risk reward relationship too. Inflation linked bonds are effective vehicle for hedging risks for institutional investors, where the long term liabilities are inflation linked or linked to future wage levels or banks who face the inflation risk on their assets side due to their GOI Bond holdings. Access of FIIs to the inflation linked bonds can allow them to hedge their inflation risks in India which are currently expressed in the currency markets. The USD/INR (currency) volatility can hence come down hence. Junk bonds Sharp movements in the Indian equity market may be par for the course. But when it comes to the market for corporate bonds, its constantly stagnant. The reason is, we dont have a corporate bond market. But this is overwhelmingly dominated by government securities (about 80% of the total). Of the remaining, close to 80% again comprises privately placed debt of public financial institutions. An efficient bond market helps corporate reduce their financing costs. It enables companies to borrow directly from investors, bypassing the major intermediary role of a commercial bank. One of the important instruments in corporate market is Junk Bonds which could be great source of financing for countries like India where markets are not much regulated. A speculative bond rated BB or below. Junk bonds are generally issued by corporations of questionable financial strength or without proven track records. They tend to be more volatile and higher yielding than bonds with superior quality ratings.Junk bond funds emphasize diversified investments in these low-rated, high-yielding debt issues. Thus, these are high-yielding, high-risk securities issued by companies with less robust finances.[7] Need for Junk Bonds in India The major issue amongst Indian bond markets has been how companies with poorer ratings can raise funds. At times the banks and FIs are reluctant to invest in even the AAA-rated companies. In fact for progress of a developing nation like India, this would give a wonderful opportunity for the smaller companies to get funds and implement their ideas. However, a proper regulatory mechanism also needs to be set-up to avoid high risk of default in the case of junk bonds. Currently, there are only two instruments that FIIs can invest in India, i.e., equity and debt. The cap on FII debt investment varies from time to time between $1.5 billion and $2 billion. The Asset Reconstruction Company of India Ltd. (ARCIL), Indias first asset reconstruction company, has vied for permitting FIIs to invest in a new instrument in India distressed assets. ARCIL has recommended SEBI, RBI and the Finance Ministry to allow FII investment in a new category, which is neither equity nor debt but a separate lucrative instrument security receipts with underlying distressed assets. Proposed Junk Bond Market in India Scenario (Optimistic Realistic) Anoptimistic scenariowould be having junk bonds in the market ideally for funding by FIIs and Institutions for financing the small Indian companies. However, considering the risk associated with these bonds it might not be possible in near future because economy is still in its nascent phase and on a fast development track.So any move which is risky and can affect future inflows of foreign funds and investor confidence would not be ideal. The only way an investor should invest in junk bonds is by diversifying. A selection of at least half a dozen issues will afford the investor some protection. High risk is inherent in high yield bonds. Nevertheless, your portfolio may well have a place for some of these securities if you are not risk-averse. By having junk bond markets, it would in fact signify deepening and maturing of Indian debt markets. In India, companies are hamstrung by the fact that investment relaxations may come in only when the debt markets get deeper, so that insurance companies can increase their portfolio yield without exposing themselves to risk for long tenures by investing in junk bonds. Impact of Junk Bonds on Indian Economy[8] A well-functioning corporate bond market allows firms to tailor their assets and liability profiles. If companies fear they will not be able to raise long-term resources, they are likely to stay away from long-term investments or entrepreneurial ventures that have a long-term payoff. In the long run, this can affect economic growth. The corporate bond and the junk bond market could fill this vacuum. In the absence of a corporate bond market, a large part of debt funding comes from banks. In the process, banks assume a significant amount of risk due to maturity mismatch between short-term deposits that can be readily withdrawn and relatively long-term illiquid loan assets resulting in high NPAs. An active and efficient bond market gives companies an alternative means of raising debt capital in the event of a credit crunch. It also leads to better pricing of credit risk (since expectations of all market participants are incorporated into bond prices). FIIs are major players in the equities market. However, thanks to the ceiling on their investment in the debt market (currently, there is a cumulative sub-ceiling of $0.5 bn on investment in corporate debt), they are present only in a limited way in the bond market. Pension funds and the insurance sector could be another constituency, but the absence of pension funds and low insurance penetration has meant limited demand for lon