Private Placement Program (PPP) is the placing of investment from the private sector or from a private entity into a public interest, trade and investments.
PPP is not particular to a particular trade but it is usually placed in high volume trades involving large corporations, hedge funds and governments.
There are a number of trades in which a PPP can be placed. They are as follows;
FOREX TRADE: This is the largest financial market in the world. What is the reason? The reason is because more than 1.8 trillion USD is being traded everyday. Forex trade is one in which currencies of Nations are traded against another. However, this trade is done in pairs that is trading two different currencies at a time, example USD/JPY
Forex trade is one which is done mainly on the internet and involves everyone interested no matter the level of business you are in, as well as largely established corporations, banks and so on. As at now, there are more than 6 million trading accounts in the world. An advantage of force trade is that one can use a small amount such as 500usd to trade 100,000usd through leveraging.
It is a 24 hours market with very high liquidity.
You can make profits in rising and falling markets. Basically, what is done is to take 2 currencies at a time, but the one that has the lowest value which promises to increase and when it thus increases, you sell it to make profit.
However, there is a high rate of returns in Forex as well as a high risk involved. Within 30 minutes, one can make more than 200% profit as well within such a time, one can loose his investment.
How does PPP come to play? As you know a PPP must always return with a profit considering the huge investments involved. Therefore, a PPP looking to invest in forex trade for a short term will have to use an experienced forex broker whom can trade very efficiently and maximizing the profit making. What is done, is to spread the PPP placements in different currency pairs.
Illustration: A PPP looking to invest 5million USD into forex will first obtain a credit line against it. After this, he can divide the creditline into lots, say 10 of 500,00usd each. Then choose currency pairs within the strongest world currencies which are otherwise called Major currencies (USD, JPY, GBP, CHF, EUR, AUD) such as USD/EUR and EUR/USD, JPY/USD and USD/JPY etc. In this way, loss will be incurred in one direction and gain in another. But it still needs the advice of an expert in forex trading since there are other ways of doing it apart from the one illustrated above that are very efficient and gains made.
STOCKS AND SHARES: This is another area where PPPs are most interested in venturing into. This is done by capitalizing on strong corporations which makes gains very frequently. Shares and stocks tends to increase in value as many people but it especially shares of big well known corporations. People are attracted to this corporations’ offer and will want to be a part of the owners of such corporations and therefore buy. As the buyers increases, so also the value increases. Within a month or two of selling shares, the value can quadruple i.e 400% increase in value. Therefore a PPP goes into the open market of stocks and shares and places investments knowing that it could quadruple within a month. Acquisitions and mergers of these large corporations are also responsible for increase in value of stocks and shares.
There are stock brokers that PPP traders can work with, with an unwavering forecast to make profit, therefore investments can be placed in such.
BUY-BACK MTNs: MTN means Medium Term Note, it is an instrument which usually has a very high face value like a Treasury Bill. There are opportunities which a PPP trader can always look for. Nobody is an island of knowledge. There are other investors or traders with a source of making large turnout of profit within the shortest time possible, needing cash to close the deals, they may have MTNs in hand but the kind of investment may not need the use of MTN but cash. This is where buy-back MTN Program comes to play. It is becoming popular. But you know anything becoming popular as such needs very keen and careful attention so as not to fall victim of swindlers that take upon any available opportunity to take from you.
What this buy back MTN is about is that they offer their MTN for sale at the lowest possible price so as to attract buyers and get it sold quickly to raise cash. They use this cash quickly for the investment which can result to 700% profit within a week or two. They will now decide to buy the MTN back from you especially at a higher price which can even be twice the amount you bought it from them and so you make 200% within a short time.
Example: A MTN of face value 200 million USD which will mature in 5 years time was sold at 30% of face value(under a buy-back program) that is at 60 million USD. After a week or two, they bought it back at 63% of face value that is at 126 million USD, which means you made 66 million USD profit on a 60 million USD investment. PPPs are used for this kind of investments.
4. LOANS: You wonder how? Well, not too worry, it is a simple logic. This will be explained using illustration. A PPP trader can decide to give secured loans to borrowers. A PPP decides to give a loan of 75% of collateral to a borrower for 2 years That is 75millin usd for a BG of 100million usd. This PPP trader has a source of discounting this BG at 92% for a short time, so he is given 92million usd for discounting. His virtual gain in the short term is 92ml usd – 75 ml usd = 17 ml usd. Maybe another borrower needs 60 ml usd for 3 years and has a 100 ml usd BG as collateral. The PPP trader gives the borrower 60million usd loan and takes the 100 ml usd BG. Note that, he will give the second borrower out of the 92 ml usd with him thereby remaining 32 ml usd. His gain on the two borrowers will be 32 ml USD. He can decide to borrow 15 more people using this same method within a month so he manages that till they pay back at the end of loan term. Imagine what he will gain on 15 borrowers. Have you ever read where lenders will tell you that “they want to borrow you money, please come and borrow” They can also put it in caption that “we give minimum of 10ml usd upwards”. You have seen the reason as explained above, they make a lot of money on borrowers, that is it.
Therefore with all this knowledge, ADVICE:
A PPP trader must be versatile and have a keen knowledge of high volume investments with high returns and able to greatly minimize risks.
He must be ready to learn these methods, understand the rudiments of these investment such as forex trade, stocks, loans and so on.
He must have links with other PPP traders and partner with them.
He must be current with the latest technique and technology in money making, He must also be inquisitive and always look for new investments.
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