Original scientific paper
Basic Characteristics of Bonds and their Dynamics on the Croatian Secondary Market
Andrijana Sesar
orcid.org/0000-0003-3561-7820
; Raiffeisenbank Austria d.d
Bojan Tomić
orcid.org/0000-0002-2305-2845
; HEP d.d.
Abstract
In light of recent announcements of the Ministry of Finance about the
emission of the so-called national bonds, this paper deals with the problems related to
bonds as the most widely accepted financial instrument on the Croatian secondary market.
Although the meaning of the bond as a debt security financial instrument is probably
clear to everyone, trading and utilization of all the advantage this financial instrument
offers is still insufficiently developed. Moreover, since bonds appear to be a possible alternative
to bank deposits, it is necessary to determine the basic concepts of the difference in
the calculation of yield between these two potential investments. Considering these facts,
the contribution of this paper is aimed at taking a closer look and simplifying the overall
understanding of this significant financial instrument. On top of that, the purpose of this
paper is to raise the awareness of the broader public with respect to understanding of the
basic characteristics of bonds, their advantages and disadvantages and ultimately to elaborate
in detail the investment possibilities offered by bonds, as one of the most popular debt
security financial instrument in Croatia. The first chapter describes the general problems
related to bonds, their basic characteristics and current divisions. The paper then elaborates
current dynamics of bonds in the secondary capital market in the Republic of Croatia,
providing a comparative presentation of purchase and sale trade channels in the secondary
market. The final chapter shows a practical example of price and yield calculation until
maturity of the bond issued by the Ministry of Finance of RoC, being traded on Zagreb
Stock Exchange.
Keywords
Bonds; valuation; Croatian secondary market
Hrčak ID:
156895
URI
Publication date:
1.3.2016.
Visits: 1.095 *