Q.3 Why the bond market in India is nowhere near equities in breadth, depth or innovation. What are the factors responsible for this? Suggest the way forward. (10 Marks)

Mentor’s comment-
  • https://www.livemint.com/opinion/online-views/indian-bond-trading-is-in-need-of-better-market-making-11629389415171.html
  • In the intro, mention the lack of depth in the bond market as compared to the equity market.
  • In the body, mention the issues with the bond that separates them from the shares of companies such as different coupon rates different maturity periods and different prices in changing interest rate environments. In the suggestion, mention supporting the market makers with incentives and creation of index etc.
  • Conclude by mentioning the need to improve the bond markets to cater to the demand for credit/debt.
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muskan garg
muskan garg
3 months ago

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