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Duration 14 hours (2 days)
Course Outline
The Global Capital Markets
- Defining the ‘financial marketplace’
- The historical evolution of contemporary global financial markets
- The influence of financial media
- The architecture of major capital markets:
- Exchanges, clearing houses, and regulatory bodies
- The recent surge in global investment activity
- Distinct categories of ‘Stock Exchanges’
- The positioning of Stock Exchanges in modern markets
- Key exchanges in the US, Europe, the Middle East, and Asia
Regulation of Financial Markets:
- Capital adequacy standards
- Basel I
- Basel II
- Basel III and its broader implications
- Drivers for new product development
Asset Classes and Their Corresponding Markets
- Current trading instruments on Stock Exchanges
- Equities – Common and Preferred shares
- Bonds – Corporate and Government issues
- Bonds – Fixed, floating, and zero-coupon rates; understanding the Yield Curve
- Money Market instruments
- Currency markets
- Investor motivations for buying and triggers for selling
- Income generation vs. Capital appreciation
- Interdependencies among various asset classes
- The interplay between Exchange-traded and Over-The-Counter markets
Short-Term Money Markets
- Certificates of deposit
- Government Treasury Bills
- Commercial paper
- Trade paper and Bankers’ Acceptances (BAs)
- Standard market norms and practices
- Key market participants
Categories of Stock Exchange Investors
- Individual and institutional Investors
- Fund managers
- Hedge funds
- Stock Exchange members
- Investment banks, stockbrokers, hedge funds, and prime brokers
- Intra-market dynamics – the buy-side and sell-side of the industry
The Function of the Stock Exchange
- Trading venues for financial products
- The significance of the OTC market
- Historical development of Stock Exchanges
- Leading Stock Exchanges in the current global landscape
- Architectural differences in US, European, and Asian markets
- Asset classes listed on exchanges worldwide
- Primary and Secondary market distinctions
- Major hubs: New York, Euronext, London, Shanghai, and Hong Kong
- The appeal of ‘listed’ companies to investors
- Leveraging Stock Exchanges for liquidity pooling and capital raising
- Strategies for capital raising
- ‘Floating’ a company – various methodologies
Clearing & Settlement
- Settlement processes and associated risks
- Settlement conventions in major markets
- Equities, bonds, and derivatives
- Derivatives clearing workflows
- The role of the Central Counterparty (CCP)
- CCP services rendered to Stock Exchanges
- Margin requirements
- The security trade settlement procedure
- Pre-settlement activities
- Final settlement
- Common issues – unmatched trades, settlement delays, and delivery failures
- Stock Exchange settlement enforcement
- The ‘life cycle of a trade’ – connecting execution to settlement
- The function of International and Central Securities Depositories (ICSDs/CSDs) – including LCH.Clearnet, Euroclear, CREST, Clearstream International, and the DTC
Custody
- The role of Custodians in stock markets
- Settlement and safekeeping
- Income collection and corporate actions
- Cash management and funding transactions
- Supplementary services
- Accounting processes
- Stock lending and collateral management
- Trustee services
- Valuation reporting
Alternative Investments
- Defining Alternative Investments
- Structured products – analyzing risks and returns
- Hedge funds – risk management and control frameworks
- Venture Capital – valuation challenges, risk, and control
- Private Equity and Angel Finance
- Application of derivatives in Asset Management
- OTC vs. Exchange-Traded Derivatives (ETD)
- Types of derivatives utilized in Asset Management
- Futures
- Options
- Risk and control measures for derivatives, covering documentation, valuation, and reporting
Management of Quoted Equity Investments
- Risks in acquiring securities
- Risks in managing securities portfolios
- Risks stemming from corporate actions
- Pricing mechanisms for quoted equities
- Primary sources of risk
- General controls within equity investment
- Risks specific to international equity markets
Management of Quoted Fixed Income Investments
- Risks in acquiring and disposing of fixed-income securities
- Utilization of credit ratings and associated risk factors
- Risks in fixed-income pricing
- Risk and control in corporate fixed-income processing
- Risks linked to Government Securities
- Sovereign credit ratings
- Valuation of government securities
- Risk and control in sovereign bond processing
Market and Credit Risks in Global Investing
- Identification of market risks
- Value at Risk (VaR) calculations
- Market risk modeling
- Credit risk assessment
- Metric for measuring credit risk
- Global market risk exposure
- Money market risks
- OTC market risks
- Exchange-related risks
Testimonials (1)
The lecturer is very knowledgeable and can substantiate theories with his own personal experiences.
