Seminar on Gilt Edged Securities

Placement Hall, August 7th, 2018. The term Gilt Edged Security (Gilts, in short) are colloquially used to refer to high grade securities (denoting less risk) and consequently ones that offer comparatively lesser yields as opposed to below investment level securities.

Technically however, the term refers to bonds issued by the UK Government – debt securities issued by the Bank of England on behalf of Her/ His Majesty’s Treasury. Historically, these paper certificates were known to have guilted edges and hence the term. Though exclusively British, the term finds wide application in Commonwealth markets like South Africa and India.

The Bhawanipur Education Society College (BESC) organised a seminar on Guilt Edged Securities to expose students to the world of interest bearing instruments, the market for them in general and the low-risk, low return guilts in particular. The Seminar comprised of a talk by Vineet Nahata, one of the masters of the securities market and certainly the prime mover in the Guilts segment.

Prof Dilip Shah, the Dean of Students Affairs of the College welcomed the speaker and gave the introduction, explaining to the 200 students who had gathered, the importance and efficacies of interest bearing securities – not only to the entities offering such papers, but also the investors as an invaluable component of their portfolios, not to mention the intermediaries who create and maintain the market for the same.

Vineet Nahata talked at length about the different classes of Guilts that are available in the market, explaining in detail the attractions they hold and the yields they offer. “Guilts are like the shock absorbers of the portfolio” he said, explaining their importance, because of their relatively risk-free and fixed return bearing nature, their ability to hedge against the wild fluctuations in the market. In the context, he also touched upon the concepts of risk-reward relationship and the creation of investment portfolios depending on the age and risk-taking ability of the investor.

From the point of view of the audience however, the most exciting segment of his talk was about the world of opportunities offered by the securities market and the areas of specialisation that new entrants can seek to follow. It is said that the “City never Sleeps” – and here he was, talking about the City being so exciting in terms of opportunities that it was ordained to steal the sleep away. Needless to say, the audience latched on to every word that he uttered.

Dr Divyesh Shah, the Co-ordinator for the morning commerce section, whose doctoral thesis was on topics that were closely related to the talk was also present at the seminar along with other senior members of the faculty.

The speaker was felicitated by Prof Supriya Pincha who takes classes on Financial Systems in the College.