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Capital Market > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

there are number of available debt instruments in the country with various ?

A

issuers
maturity
size
coupon
minimum denominations

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2
Q

are domestic government debt issued regularly to finance the national government needs for capital

A

treasury bills

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3
Q

are another form of government debt issued and launched in the late 1990s to attract retail investors

A

Small investors program bills

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4
Q

are short-term debt notes used in times of tight liquidity and interest rate volatility

A

Cash management bills

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5
Q

overnight placements in the inter-bank call loan market as a short-term outlet for excess liquidity of banks

A

Reverse repurchase agreements

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6
Q

This is BSP’s principal tool in its open market operations to control liquidity in the financial system.

A

Reverse repurchase agreements

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7
Q

are unsecured debt instruments issued by resident corporations which state the terms and conditions of the borrowing.

A

Short-term commercial papers

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8
Q

are short-term debt obligations issued by large commercial banks.

A

Bankers’ acceptance

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9
Q

Available Money Market Instruments

A

treasury bills
small investors program bills
Cash management bills
Reverse repurchase agreements
Short-term commercial papers
Bankers’ acceptance
Promissory Notes

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10
Q

is dominated by government debt issued regularly.

A

domestic money market

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11
Q

is a major investor in money market.

A

Banking sector

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12
Q

Other major players/investors in the money market

A

Social Security System
Government Services Insurance System
Home Development Mutual Fund
Trust funds
insurance companies
private pension funds
mutual funds
retail investors

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13
Q

are like treasury bills but longer in tenor.

A

Treasury Bonds

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14
Q

are direct unconditional obligation of the Philippine government, like treasury bonds, but shorter in tenor, usually 2 -7 years.

A

Fixed Rate notes

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15
Q

were launched in the late 1990s to attract retail investors. Basically, the government is issuing these instruments with similar characteristics as the regular auctioned instruments.

A

Small Investors Program bonds

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16
Q

are the most common form of corporate borrowings issued by resident corporations.

A

Long Term Commercial Papers

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17
Q

are a pool of homogenous assets that are securitized

A

Asset Backed Securities

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18
Q

Example of asset backed securities

A

Credit card receivables
mortgages
personal loans

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19
Q

are debts of Local Government Units undertaken to finance local government projects.

A

Municipal Bonds

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20
Q

are intended to beef-up the bank’s capital structure in order to comply with the BSP’s capital adequacy ratio.

A

Tier 2 Capital notes of banks

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21
Q

are dollar denominated obligations of the Republic of the Philippines and other private companies.

A

Dollar-linked Notes

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22
Q

Capital Market Debt Instruments

A

Treasury Bonds
Fixed Rate notes
Small investors program bonds
Long term Commercial Papers
Asset backed securities
Municipal Bonds
Tier 2 Capital notes of banks

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23
Q

the largest issuer of debt in the country.

A

Philippine Government

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24
Q

the government assumed or guaranteed part of the debt issued by a number of

A

Government Owned and Controlled Corporation

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25
Q

issuers of private debts are limited to

A

top domestic companies

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26
Q

comprised the bulk of private issuances

A

Asset-backed securities

27
Q

is a major investor in domestic debt instruments.

A

The banking sector

28
Q

other major players/investors in the philippine debt market

A

SSS, GSIS, HDMF, Trust funds, Insurance Companies, Private Pension Funds, and Retail Investors.

29
Q

the country’s first centralized electronic infrastructure for trading of fixed-income securities

A

Fixed income Exchange

30
Q

is a comprehensive financial market infrastructure that aims to provide and electronic platform for trading,

A

Fixed Income Exchange

31
Q

what does FIE aims to provide

A

electronic platform for trading, clearing, and settlement, and depository

32
Q

Most of the issues traded in the Philippine Stock Exchange

A

shares of common stocks
preferred stocks
warrants & Philippine Depository Receipts

33
Q

otherwise known as Ordinary shares

A

Common stocks

34
Q

represent ownership in a company,

A

Common Stocks

35
Q

Common shareholders are entitled to

A

Voting rights
Pro rata division of profits among stockholders

36
Q

also known as “Preferential Shares

A

Preferred stocks

37
Q

given preference over common shares

A

Preferential shares

38
Q

usually carries a specific rate of return and a specified redemption price.

A

Preferred

39
Q

can be converted into common shares at a specified time and price in the future.

A

Convertible shares

40
Q

issuers of the Philippine equities market

A

Financial issues
Services issues
Holding firms issues
Industrial issues
Property issues
Mining & Oil issues
Preferred
Warrants, Philippine Deposit Receipts

41
Q

this sector includes banks and other financial institutions

A

Financial issues

42
Q

this sector includes electricity, power and water

A

Industrial issues

43
Q

this sector includes companies such as Ayala Corporation, JG Summit Holdings

A

Holding firms issues

44
Q

this sector includes land developers, and real estate companies.

A

Property issues

45
Q

this sector includes media; telecommunications; information technology

A

Services issues

46
Q

examples include PLDT 10% Cumulative convertible Preferred Series; Ayala Corporation

A

Preferred

47
Q

represent the bulk of the foreign exchange transaction.

A

Spot transactions

48
Q

the most common foreign exchange transactions are done in the spot market.

A

Spot transactions

49
Q

a commitment to buy one currency (peso) against another currency (US Dollar) at a future date at a pre-determined foreign exchange rate.

A

Foreign Exchange Forward Contracts

50
Q

is an agreement between two or more parties, where the cash flows are exchanged in two different currencies based on an agreed notional amount and maturity.

A

Swap Contracts

51
Q

provides a platform for the buyers and the sellers (banks) to meet with the provision of real time weighted average rate and volume of trades for the peso

A

Philippine Dealing System (PDS

52
Q

What are the available derivatives instruments

A

Forward contracts
Swap Contracts
Option Contracts

53
Q

these are contracts, which obligate the holder to buy or sell an asset at a predetermined delivery price at a predetermined future date.

A

Forward Contracts

54
Q

these contracts specify a simultaneous exchange in cash flows by both parties based on movements linked to the prices, values, or returns of an underlying asset instruments

A

Swap contracts

55
Q

is a right but not an obligation to buy or sell an underlying asset at a certain date and price.

A

Option Contracts

56
Q

otherwise known as the Real Estate Investment Trust Act (REIT)

A

RA9856

57
Q

establishes the framework for a more secure investment in real estate assets.

A

Real estate investment Trust Act

58
Q

otherwise known as the Credit Information System Act

A

RA 9510

59
Q

otherwise known as the Personal Equity Retirement Account Act (PERAA)

A

RA 9505

60
Q

two types of common shares

A

Class A shares
Class B shares

61
Q

Give Equity observations on the philippine capital Market

A

Weak corporate governance
Limited institutional participation
Lack of financial information / regulation
Low demand for securities
limited number of securities traded
Trading concentrated on few issues

62
Q

Give Debt observations on the philippine capital Market

A

Huge government debts
Transparency in rate determination
Limited Rating Appeal
Importance of Bank

63
Q
A

Capital Market (4 decks)

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