Czech bond market versus investments into foreign bonds
|Author:||Mgr. Martin Šopejstal|
|Year:||2006 - summer|
|Leaders:|| † doc. Ing. Jiří Havel CSc.
|Work type:|| Finance and Banking
|Awards and prizes:|
|Abstract:||Diploma thesis try to answer the question, if czech government bond are, it current czech low-yield environment, attractive in comparison with foreign government bonds?
Thesis focuses on czech bond market in 2006. Besides corporate bonds the work is primarilly directed to government bonds that are prevailing investment opportunity in the Czech republic. At the beginnig of the work is analysed current supply of government bonds a its expected development in the future incl. duration, maturity structure etc. Then the thesis focuses on demand for government bonds. It means the description of main investors and their ability to absorb supplied amount. Subsequently, the work compares particular yield curves in several countries (Visegrad group, USA, German, Japan) and identifies relative yields to maturity and prices, but also rating and bonds liquidity.
In the second part the thesis focuses on integration of FX risk into investors decision process and on creation of suitable effective line. The result is, that FX risk strongly influences the behavior of investors. In case of domestic/local investors the czech government bonds are part of every effective line. It means, that they are not so expensive as they seem without including FX risk. The analysis continue with the possibility to hedge FX risk and new effective line is created, but again, the czech government bonds are part of it.