Banking. Securities in the Russian Federation. Types and characteristics (lecture notes)

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Banking. Securities in the Russian Federation. Types and characteristics (lecture notes)

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Securities in the Russian Federation. Types and characteristics

The classification of securities is primarily determined by their intended purpose, which in turn determines the conditions of issue, quotation and their profitability. On this basis, securities are divided into:

1) shares of private companies, mixed and state companies;

2) bonds of joint-stock companies, banks and financial institutions;

3) semi-securities (vouchers);

4) Financial instruments (bills, savings, deposits, investment certificates);

5) government securities:

a) GKOs with a three-month validity period b) GKOs with a six-month validity period c) GKOs with an eight-month validity period d) GKOs with a one-year validity period e) Bonds of domestic foreign currency loans and Vnesheconombank f) financial instrument (gold certificate of the Ministry of Finance of the Russian Federation).

shares serve three main purposes. Firstly, their release is necessary when organizing a joint-stock company in order to provide a new enterprise with a certain initial capital for the development of economic activity. Secondly, this is the attraction of additional financial resources already in the course of economic activity. Thirdly, the issue of shares is used for an exchange for the purpose of merging with another company. The profitability of shares is determined solely by the payment of dividends on them.

Bonds issued by companies serve the sole purpose of raising funds to renew fixed capital, replace equipment, and expand production capacity. As a rule, bonds are issued in three cases, when corporations or companies do not have enough own financial sources (profit and depreciation) to expand their economic activities.

A feature of bonds issued by companies is differentiated terms: from one or more years. Bond yields are usually determined by the annual interest payment (which is quite high).

The next important type of securities are bonds issued by the central government and local governments, usually to cover budget deficits. The fact is that the executive branch does not have enough tax revenues to balance its budget expenditures, and money emission leads to inflation. Therefore, an important additional element of cost coverage is government loans, i.e., the issue of bonds by various levels of executive power (central and local) for different periods - from several weeks to several years. Depending on the period of issue of bonds, their income fluctuates, that is, the percentage paid to buyers by the state.

Thus, the securities market, depending on the type of securities, is divided into markets for shares, private bonds and government bonds. The last two are sometimes called the bond market. Between these types of securities there is constant competition in terms of profitability, that is, we are talking about the ratio of dividend on shares to interest paid on private and government bonds, on the one hand, and the ratio between interest on private and government bonds, on the other.

Author: Shevchuk D.A.

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