Valuation

The Valuation Information screen is an essential tool that allows users to quickly calculate the price of any corporate or government bond.

The FiinGroup bond database, as of September 2023, contains nearly 8,000 bond codes with associated cash flow data, along with 30 standard yield curves that serve as the basis for calculating floating rates of most traded bonds.

The Valuation Tool is divided into the following sections:

Bond Information:

  • Users can quickly retrieve any bond by entering the bond code or issuer name.

  • Once selected, the full bond details are displayed, including: • Basic bond information • Actual repayment schedule (including any deferred payments) • Future cash flows • Other bonds from the same issuer and peers in the same sector

Valuation Tool:

  • An advanced pricing module that allows users to value various types of bonds such as: • Fixed-rate bonds • Floating-rate bonds • Regular cash flows • Irregular cash flows

Basic Method:

  • To calculate the price of any bond, users only need to input one of three values: Yield to Maturity (YTM), Dirty Price, or Clean Price. The system will automatically compute the other two.

  • For example, if a user inputs a Dirty Price of VND 96,000 with the trade date set to today, the system instantly converts and displays the corresponding YTM and Clean Price.

Advance Medthod:

Currently, nearly half of corporate bonds in the market are issued with floating rates. To calculate floating-rate bonds, users must update the reference rate that closely reflects the actual rate to be paid in the future.

To provide an advanced valuation toolkit for floating-rate bonds, the system includes:

Reference rate updates:

  • The FiinPro-X system comes with nearly 30 reference rates updated daily, ensuring that floating rates closely follow market movements.

  • Users can also manually adjust the reference rate to any desired value, in which case the system will automatically recalculate future cash flows using the new reference rate.

Cash flow scenario building:

  • For floating-rate bonds, multiple repayment scenarios may occur, such as: • The issuer changes interest terms or payment dates • The issuer executes a bond buyback • Reference rates increase or decrease

  • On the Valuation screen, users can: • Add / delete / edit interest payment amounts and dates for future cash flows • Adjust bond tenors

  • These scenarios can be saved, enabling users to compare different cash flow outcomes and evaluate how each scenario corresponds to different investment yields.

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