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E-Articles - Bond Investments for the Retail Investor
Bond markets have been around for almost as long as equity markets. For most retail investors, bonds are seen as less exciting compared to equities, prob
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
ably due to the relatively stable nature of bond investments. One can probably even argue that media coverage of stock markets is far more extensive than
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
coverage of the bond markets.
So what is a bond? We learn in college that a bond is a debt instrument issued by a company or a government. The buyer o
So what is a bond? We learn in college that a bond is a debt instrument issued by a company or a government. The buyer o
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
f the bond is in effect loaning money to the institution and is promised the full principal plus a fixed periodic payout during the tenure of the bond. T
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
he total payouts received together with the final principal will be put together in a computation to determine the yield on the bond. The yield, in layma
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
n's terms, is the effective interest rate earned on the bond for the entire duration.
Some issuers issue zero-coupon bonds, which do not have any payout
Some issuers issue zero-coupon bonds, which do not have any payout
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
during the bond tenure. The investor earns the difference between the purchase price of the bond and the principal value, also known as the face value.
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
While investment banking trading desks make profits on trading bonds on a regular basis, by taking on credit risk and interest rate duration risk, this is
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
often not the case for the retail investor, who does not usually have the availability of live interest rate and bond trading data.
A retail investor's
A retail investor's
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
objective in purchasing bonds can be seen as an attempt to earn a better yield compared to ordinary deposit rates. If the issuer is sufficiently creditwo
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
rthy, the investor should be able to receive his or her full principal at maturity of the bond, which can have a tenure of anywhere from three months to f
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ifteen years. At the same time, the investor may have an opportunity to make capital gains from his bond investment if the market interest rates should f
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
all. This therefore presents an additional advantage for bond investments over ordinary deposits.
Trading bonds. The bond market is still largely an ov
Trading bonds. The bond market is still largely an ov
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
er the counter market. Market participants comprise large investment banks, private banks and asset managers. Unlike stocks, which are traded on an exch
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ange and hence have price transparency, bonds traded on the over the counter market do not exhibit this price transparency; quotes are given and taken ove
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
r a platform such as Bloomberg or Reuters. With the lack of price transparency, there is also a lack of ready liquidity, as one would not be able to dete
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
rmine the liquidity for a particular bond issue. It can be argued that this is one of the reasons why investors are not as familiar with bonds as they ar
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
e with stocks.
One other way to purchase bonds would be to buy them direct from the issuer, which could be a central bank or a corporation. In most case
One other way to purchase bonds would be to buy them direct from the issuer, which could be a central bank or a corporation. In most case
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
s, the minimum investment might be higher than what most retail investors are prepared to invest in one go.
With Asian central banks wishing to deepen an
With Asian central banks wishing to deepen an
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
d further develop the local currency bond markets, greater efforts in education can be seen as key to attracting retail investors towards the bond markets
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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