International Capital Markets
Duration: 3 days
- Financial Markets Introduction
- International Stock Markets
- Fixed Income Markets
- Hybrid Instruments
- Foreign Exchange Markets
- Derivatives and Derivatives Markets
Globalisation and deregulation of the financial markets have resulted in an abundance of borrowing
and investment opportunities for financial institutions and companies. But today’s financial
markets are also complex and volatile, and it is essential that the mechanics, risks and
interdependencies of these markets are well understood by ALL people involved in these activities -
whether directly as traders and portfolio managers or more indirectly. The objectives of this
course are to give the participants an overview of the international capital markets and a good
understanding of how they work. We shall start with an overall introduction to financial markets,
giving a brief account of their evolution and current status. We shall then explore the markets in
more detail, focusing on stocks, fixed income, hybrid and derivative instruments. In each case, we
shall explain the instruments, the way they are traded and settled, and the interactions between
the institutions and people who trade and/or use the instruments for investing or financing
purposes.
Day One
09.00 - 09. 15 Welcome Address
09.15 - 10.15 Financial Markets - an overall Introduction
- The Evolution of Financial Markets: From "3-8-5" Banking to Global Market Place
- Types of Financial Institutions
- Primary versus Secondary Financial Markets
- The Roles of Banks, Investment Banks, Merchant Banks etc.
- Overview of Risks in the Financial Markets
- Credit and Settlement Risks
- Liquidity Risk
- Market Risks
- Operational Risks
10.30 - 12.30 International Stock Markets
- The Role of Stocks in Corporate Finance
- Types of Stocks
- Common Stocks and Preferred Stocks
- The Primary Markets for Stocks
- "Going Public"
- Issuing Techniques (Bookbuilding etc.)
- The Secondary Market for Stocks
- How and Where Stocks Are Traded
- Market Making vs. Order Driven Systems
- Valuation of Stocks
- What Factors Affect the Value of Stocks?
- Important Key Ratios (P/E, Dividend Yield etc.)
- A Simple Valuation Model for the Stock Market
- Small Exercises
12.30 - 13.30 Lunch
13.30 - 16.30 Fixed Income Markets (Part I)
- Classification of Fixed Income Markets
- Money Market vs. Capital Market
- National vs. International Markets
- Types of Issuers
- Cash Flow Structures
- Government Bond Markets
- Major Markets (US, Japan, Germany, UK, Italy etc.)
- Primary Market: Tender Auction Principles
- Secondary Market Trading Conventions
- Small Exercises
Day Two
09.00 - 09.15 Recap
09.15 - 12.00 Fixed Income Markets (Part II)
- Corporate Bonds
- The Role of Bonds in Corporate Finance
- Types of Issuers
- Secured/Unsecured Debt
- Junior/Senior Debt
- Rating Institutions and Rating Systems
- "Investment Grade" and "Junk" Bonds
- The "Credit Curve"
- International Bond Markets
- "Foreign Bonds" (Yankees, Samurais, Bulldogs etc.)
- The Eurobond Market
- Historical Development
- Issuing, Clearing and Settling International Bonds
- Emerging Bond Markets
- Asset Backed Securities
- Small Exercises
12.00 - 13.00 Lunch
13.00 - 14.30 Fixed Income Trading Strategies
- Overview of Trading Strategies in Bond/Money Markets
- Understanding the Yield Curve
- Repos and Securities Lending
- Financing/Investing with Repos
- Types of Repos (classic, sell/buy-back, international)
- Securities Lending and Short-Selling
- Bond Switching
- Portfolio Strategies and How they Affect Bond Markets
- Small Exercises
14.30 - 14.45 Coffee Break
14.45 - 16.30 Hybrid Instruments
- Overview of Markets for "Equity Related" Debt Instruments
- Convertible Bonds
- Motives for Issuing/Buying Convertibles
- Analytic Concepts: Conversion Ratio, Conversion Premium etc.
- Examples of "Standard" and Complex Convertibles
- Warrants
- Other Equity Related Issues
- Small Exercises
Day Three
09.00 - 09.15 Recap
09.15 - 10.15 Foreign Exchange
- Overview of Foreign Exchange Markets
- A Brief History of Exchange Rates
- Determinants of Exchange Rates
- Purchasing Power Parity
- Interest Rate Differentials
- Quoting and Trading Conventions in the FX Markets
- Important Analytic Concepts
- Interest Rate Parity
- Forward Rates
- Outlook: Financial Markets in the Context of a Single European Currency
- Small Exercises
10.15 - 10.30 Coffee Break
10.30 - 12.00 Derivatives and Derivatives Markets (I)
- Generic Features of Derivative Instruments
- Types of Derivative Instruments
- Uses of Derivatives
- Futures and Options
- What Are Futures and Options
- Who Use Futures and Options
- Instruments and Exchanges
- Trading, Clearing and Settlement
- The Nick Leeson Story
- Regulatory Developments
12.00 - 13.00 Lunch
13.00 - 16.00 Derivatives and Derivatives Markets (II)
- General Characteristics of OTC Instruments
- Forward Rate Agreement
- Interest Rate and Currency Swaps
- Case: Combining Eurobond Issue with Swap ("Liability Swap")
- Case: Hedging Foreign Investment with Cross-Currency Swap
- OTC Interest Rate Options
- Case: Swap, Cap or Collar?
- "Structured Bonds" and other Third Generation Financial Innovations
- Reverse Floaters
- Capital Market Floaters
- "Guaranteed Bonds"
- etc.
- Small Exercises
16.00-16.30 Summary, Evaluation and Termination of the Seminar
|