ANALYSIS OF FRONTIER MARKET IN

FIXED INCOME SPACE

Presented by:
Mansha Anand
13BSP0395
ABOUT THE COMPANY
Indxx seeks to redefine the global indexing space.
Founded in 2005 and with offices in New York,
London and New Delhi, the firm focuses on:


Index
Licensing
Index
Calculation
Analytics
WHOM DO THEY SERVE?
Exchange Traded Funds (ETFs)
Mutual Funds
Asset Managers
Pension Funds


SWOT ANALYSIS





STRENGTH
Develops and maintains unique
indices
Coverage of broad spectrum of
asset classes such as equities,fixed
income,commodities.





WEAKNESS
Can be impacted by legal and
regulatory changes in US and
international level.
High Attrition rate in the industry.

OPPURTUNITY
Emerging scope for launching
ETFs in India and therefore
indices has recently been
developed focussing Indian
market.
THREAT
Volatility of financial markets.
Already established players in
the market like S&P,MSCI
MICHAEL PORTER ANALYSIS
Competitive
Rivalry
Threat of
New Entry
Buyer
Power
Threat of
Substitution
Supplier
Power
FINANCIAL ANALYSIS OF STANDARD & POOR

CURRENT RATIO
QUICK RATIO
RETURN ON CAPITAL EMPLOYED
DEBT EQUITY RATIO
NET PROFIT RATIO
WORK PERFORMED
Factsheet Development
Creation of portfolios
Work on US Fixed Income Database
Maintenance of Websites
Updation of Indices

FACTSHEET
ABOUT THE PROJECT

ANALYSIS OF FRONTIER MARKET
IN FIXED INCOME SPACE
OBJECTIVE

Analysing the fixed income space (Debt
Market) in the frontier market.

This study will help the company in launching
its indices in these countries.

WHAT ARE FRONTIER MARKETS?
A frontier market is a type of country that is not a
developed market.
These markets have lower market capitalizations
and less liquidity.
Investors who have benefited from the boom in
emerging markets are now on the look-out for
the next source of growth, which is putting the
spotlight on frontier markets.

FRONTIER COUNTRIES
BLOOMBERG: TOP 8 FRONTIER COUNTRIES 2014
1. QATAR
2. UAE
3. SAUDI ARABIA
4. ESTONIA
5. BAHRAIN
6. SLOVAKIA
7. LITHUANIA
8. BULGARIA



QATAR
16.90%
83.10%
Qatar Bond Market Structure
corporate bonds
government bonds
45.07%
54.93%
Debt Instrument Type
Domestic
Bonds
International
Bonds
2.35
1.18
2.87
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Total Corporate Bonds Government bonds
Average Yield to Maturity
Average Yield to Maturity
UAE
83.54%
16.46%
UAE Bond Market Structure
corporate bonds
government bonds
23%
77%
Debt Instrument type
Domestic
Bonds
International
Bonds
2.03
2.06
1.80
1.65
1.7
1.75
1.8
1.85
1.9
1.95
2
2.05
2.1
Total Corporate Bonds Government bonds
Average Yield to Maturity
Average Yield to Maturity
SAUDI ARABIA
17.39%
82.61%
Saudia Arabia Bond Market
Structure
Corporate Bonds
Government
bonds
95.65%
4.35%
Debt Instrument Type
Domestic Bonds
International
Bonds
0.83
0.70
0.86
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
total corporate government
Average Yield to Maturity
Average Yield to Maturity
BAHRAIN

9.43%
90.57%
Bahrain Bond Market Structure
corporate bonds
government
bonds
75%
25%
Debt Instrument Type
Domestic Bonds
International
Bonds
3.24
2.77
3.41
0
0.5
1
1.5
2
2.5
3
3.5
4
Total Corporate Bonds Government
bonds
Average Yield to Maturity
Average Yield to
Maturity
SLOVAKIA

15.79%
84.21%
Slovakia Bond Market Structure
corporate bonds
government bonds
58%
42%
Debt Instrument Type
Domestic
Bonds
International
Bonds
1.60
1.91
1.54
0.00
0.50
1.00
1.50
2.00
2.50
Total Corporate Bonds Government bonds
Average Yield to Maturity
Average Yield to Maturity
LITHUANIA

3.33%
96.67%
Lithuania Bond Market Structure
Corporate
Bonds
Governmen
t bonds
73%
27%
Debt Instrument Type
Domestic
Bonds
International
Bonds
1.66
1.06
1.70
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
total corporate government
Average Yield to Maturity
Average Yield to Maturity
BULGARIA
12.50%
87.50%
Bulgaria Bond Market Structure
Corporate Bonds
Government bonds
78%
22%
Debt Instrument Type
Domestic
Bonds
International
Bonds
1.97
8.73
1.49
0
1
2
3
4
5
6
7
8
9
10
total corporate government
Average Yield to Maturity
Average Yield to Maturity
While launching an Exchange Traded Fund the ETF provider takes into consideration
international bonds that have been issued by the country as foreign investors would
prefer investing in Dollar denominated bonds, Euro Bonds rather than Local Currency
Bonds.

Out of all the frontier countries that have been taken for analysis Qatar, UAE and
Slovakia have issued a large number of International Bonds. UAE has issued highest
number of dollar denominated bonds (77%). Therefore these countries can be tapped
by the ETF providers for launching a fund.

S&P has affirmed AA Credit Rating to Qatar and UAE which is the second highest
credit rating after AAA declaring them to be the most stabilized.



SOME RECENT UPDATES

Qatar, UAE about to get major upgrade.

As per CNN Money Qatar and UAE because of their outstanding
performance will be upgraded soon in the list of Emerging
Markets.

http://money.cnn.com/2014/05/29/investing/qatar-uae-economy/


THANK YOU