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NSES Debt Market
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Debt Market

Provides an efficient platform for retail and institutional investors to access tradable debt instruments to actively manage portfolio investments across the ecosystem. Debt trading also increases the availability of long-term capital and provides a substitute for bank loans for companies, possibly helping lower their cost of capital.

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Bond Market Indicators

NSES Govt Bond Index
985.24+0.34%
Yield: 8.5%
NSES Corp Bond Index
875.37-0.12%
Yield: 10.2%
NSES Muni Bond Index
752.18+0.25%
Yield: 9.3%
NSES Aggregate Bond Index
1,183.05+0.15%
Yield: 9.1%

Debt Market on NSES

The debt market segment provides an avenue for companies to access short-term finance to fund working capital needs through money market instruments that can be quoted and traded on the secondary market in a relatively short period of time. Public sector infrastructural development can be financed through the debt market using local currency debt financing such as Government Bonds, Sukuk Bonds and Green Bonds.

Debt trading also increases the availability of long-term capital and provides a substitute for bank loans for companies, possibly helping lower their cost of capital.

Key Features of Debt Market

Fixed Income

Regular interest payments and principal repayment at maturity provide predictable cash flows.

Capital Preservation

Principal amount returned at maturity, offering lower risk compared to equities

Portfolio Diversification

Debt instruments provide an effective way to diversify investment portfolios and manage risk.

Liquidity

Ability to buy and sell debt instruments through the exchange during trading hours.

Debt Market Instruments

The different types of instruments traded on the Debt market segment include:

Treasury Bills (T-Bills)

Treasury Bills (T-Bills) are safe, short-term debt securities issued by the government (Ministry of Finance) to investors with a maturity period of one year or less.

Treasury Bonds

Treasury Bonds are safe, long-term debt securities issued by the government to investors with a maturity period of more than one year. Treasury Bonds enable the government to raise capital to fund long-term infrastructure investments and finance fiscal deficits using local currency debt.

Sukuk Bonds

Sukuk (Islamic bond or "Sharia-compliant" bond) is an Islamic financial certificate that represents a portion of ownership in a portfolio of eligible existing or future assets. They can be considered as an Islamic version of conventional bonds. Sukuk investors receive profit generated by the underlying asset on a periodic basis.

Corporate Bonds

Corporate bonds provide companies an alternative and more efficient source of long-term capital relative to traditional bank loans, providing a sustainable avenue to fund capital expenditure needs.

Key Features:

  • Higher yields compared to government bonds
  • Credit ratings affecting risk and return profiles
  • Diverse industry exposure
  • Various coupon structures available

Government Bonds

Debt securities issued by the national government to finance public spending

Key Features:

  • Low risk profile with government backing
  • Fixed interest payments on scheduled dates
  • Various maturities from short to long-term
  • Exempt from certain taxes

Municipal Bonds

Bonds issued by local governments and municipalities to fund public projects

Key Features:

  • Support for local infrastructure development
  • Often tax-advantaged for local investors
  • Project-specific investment opportunities
  • Community development impact

Repurchase Agreements (Repos)

Repurchase Agreements (Repos) are commonly used by banks and dealers in government securities who sell government securities to a lender and agree to repurchase them at an agreed price later to meet short-term liquidity needs (usually 1–7days term).

Commercial Papers (CPs)

Commercial papers (CPs) are short-term debt obligations issued by large corporations with a maturity period of less than 270 days. CPs are usually sold to investors at a discount to face value and primarily issued by corporates to fund working capital or finance short term assets. Investors receive the face value of the CP instrument at maturity.

Benefits of Investing in Debt Instruments

Debt instruments offer numerous advantages as part of a diversified investment portfolio

Steady Income

Regular interest payments provide reliable income streams, particularly beneficial for retirees and income-focused investors

Capital Preservation

Face value returned at maturity offers capital preservation and lower volatility compared to stocks

Portfolio Diversification

Bonds typically have low correlation with equities, helping to reduce overall portfolio risk

How to Start Trading Debt Instruments

Follow these simple steps to begin your debt trading journey on NSES

1

Choose a Licensed Broker

Select from NSES-approved brokerage firms to facilitate your bond trading

2

Open a Trading Account

Complete the necessary documentation and KYC requirements

3

Fund Your Account

Deposit funds into your brokerage account to begin investing

4

Start Trading

Place buy or sell orders through your broker to execute trades