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Course Outline
The Global Capital Markets
- Defining a financial marketplace
- Historical evolution of today’s global financial markets
- The influence of financial media
- Structure of major capital markets:
- Exchanges, Clearing Houses, and Regulators
- The recent surge in global investment activity
- Various types of Stock Exchanges
- The role of Stock Exchanges in contemporary markets
- Stock Exchanges in the US, Europe, the Middle East, and Asia
Regulation of Financial Markets:
- Capital Adequacy Requirements
- Basel I
- Basel II
- Basel III and its implications
- Drivers for New Product Development
Asset Classes and Their Corresponding Markets
- Current instruments traded on Stock Exchanges
- Equities – Common and Preferred shares
- Bonds – Corporate and Government
- Bonds – Fixed-rate, Floating-rate, Zero-coupon, and the Yield Curve
- Money Market instruments
- Foreign exchange markets
- Investor motivations for buying and selling
- Income versus Capital Gain
- Interrelationships among various asset classes
- Interaction between Exchange-traded and Over-The-Counter markets
The Short-Term Money Market
- Certificates of Deposit
- Treasury Bills
- Commercial Paper
- Trade Paper and Bankers' Acceptances
- Market conventions and practices
- Key market participants
Investor Types in Stock Exchanges
- Individual Investors
- Fund Managers
- Hedge Funds
- Stock Exchange Participants
- Investment Banks, Stockbrokers, Hedge Funds, and Prime Brokers
- Intra-market relationships – The Buy-side and Sell-side of the industry
The Role of the Stock Exchange
- Trading venues for these products
- The significance of the OTC market
- Historical development of Stock Exchanges
- Major Stock Exchanges in current markets
- US, European, and Asian Markets and their distinct architectures
- Asset classes traded on global Stock Exchanges
- Primary and Secondary markets
- New York, Euronext, London, Shanghai, Hong Kong
- Appeal of listed companies to investors
- Leveraging Stock Exchanges for liquidity pooling and capital raising
- Capital raising methods
- Company ‘Floating’ – Various approaches
Clearing and Settlement
- Settlement and associated settlement risk
- Settlement conventions across major markets
- Equities, Bonds, and Derivatives
- Derivatives Clearing process
- The Central Counterparty (CCP)
- CCP services provided to Stock Exchanges
- Margin requirements
- The security trade settlement process
- Pre-settlement phase
- Settlement phase
- Potential issues – Unmatched trades, delayed settlement, failed deliveries
- Stock Exchange Settlement Discipline
- The ‘life cycle of a trade’ – Linking trade to settlement
- The role of International Central Securities Depositories (ICSDs) and Central Securities Depositories (CSDs) – LCH.Clearnet, Euroclear, Crest, Clearstream International, the DTC
Custody Services
- The role of Custodians in stock markets
- Settlement and safekeeping
- Income collection and Corporate Actions
- Cash management and funding transactions
- Additional services
- Accounting
- Stock Lending and collateral management
- Trustee services
- Valuation reports
Alternative Investments
- Definition of Alternative Investments
- Structured products – Risks and returns
- Hedge funds – Risks and control mechanisms
- Venture Capital – Valuation issues, Risk, and Control
- Private Equity and Angel Finance
- Use of derivatives in Asset Management
- OTC vs. Exchange-Traded Derivatives (ETD)
- Types of Derivatives used in Asset Management
- Futures
- Options
- Risks and controls related to derivatives, including documentation, valuation, and reporting
Management of Quoted Equity Investments
- Risks associated with acquiring securities
- Risks associated with managing securities
- Risks associated with corporate actions
- Pricing of quoted equity investments
- Primary sources of risk
- General controls within equity investment
- Risks associated with international equity markets
Management of Quoted Fixed Income Investments
- Risks associated with acquiring and disposing of fixed income securities
- Use of ratings and associated risk issues
- Risks associated with pricing fixed income securities
- Risk and controls within corporate fixed income processing
- Risks associated with Government Securities
- Sovereign risk ratings
- Valuation of government securities
- Risk and controls within sovereign bond processing
Market and Credit Risks in Global Markets
- Market risks
- Value at Risk (VaR) calculations
- Market risk modelling
- Credit Risks
- Measuring Credit risks
- Global Market Risks
- Money Market Risks
- OTC Risks
- Exchange risks
14 Hours
Testimonials (1)
The lecturer is very knowledgeable and can substantiate theories with his own personal experiences.