How the Financial Markets Work

A two-day, fully comprehensive course on the international capital markets and instruments

Course Highlights

Excellent course, well delivered, covering both theoretical and practical issues

F.T., Ernst & Young

Gaining full insight into the origins of the capital markets, the key players and the role of the regulatory institutions
Thorough grounding in the main financial products and how they are used, including: bonds, equities, futures and forwards, swaps and options
Defining and exploring the key features and purposes of the financial markets, including fixed income markets, equity markets, money markets, foreign exchange market, swaps market, forwards and futures markets, options market and credit markets
Unravelling the credit crunch: causes, consequences and the future

For details of the course trainer, please download the course brochure

Booking Information

Dates	Prices	Book This Course	Discount
30 - 31 Mar 2009	£ 1899		-
27 - 28 Jul 2009	£ 1899		-

Course Programme

Excellent course, well delivered, covering both theoretical and practical issues

F.T., Ernst & Young

The origins of the capital markets, the institutions and the key players

Background to the structure of the capital markets
The major financial centres
The financial institutions:

investment and commercial banks
insurance and asset management companies
stockbrokers and securities houses

The role of the key players:

issuers and borrowers
investors
intermediaries

The financial advisory services:

lawyers, accountants and venture capitalists

The regulatory framework - the FSA, SEC, BIS and the European Central Banks

Underlying capital markets concepts

Efficient markets
Economic fundamentals
Technical analysis
Theory and practice of predicting price moves

Exercise: Calculating leverage ratios

An introduction to the different capital markets products and instruments

Analysis of different asset classes
How different securities are issued and why
Bonds
Equities
Derivatives

Exercise: Determining an asset allocation mix for a given time horizon and risk profile

The bond and fixed income markets

The origins of the market
A definition of bonds - who uses the bond markets and why
Bonds vs other asset classes
Asset allocation
Types of 'hybrid' instruments - convertibles, warrants and other structured products

Exercise: Calculating bond prices from yields and yields from prices

The equity markets

Definition of equities
The structure of the equity markets
Why companies and governments use the equity markets
Primary offerings vs secondary transactions
Assessing company value: accounting ratios, technical and fundamental analysis
Issuing equities
Debt vs. equity

Case Study: Pricing primary and secondary issues

The money markets

Definition of domestic and international markets
An overview of money markets products:

Certificates of deposit
Treasury bills
Commercial paper
Bankers acceptances
Repos

The role and purpose of the money markets

Exercise: Participants will compare a variety of money market rates quoted in the Financial Times

The foreign exchange market

The role of the Forex market
How they are used - the exchanges and trading techniques
Managing foreign exchange risk
Relationships between the spot, forward and interest rate markets
Relationship with the money markets

Case study: Comparing the returns on investments after taking currency overlay into account

Case study: The carry trade: why is it so popular

An introduction to derivatives

The origin of the derivative markets, size and location
Why financial institutions and corporates use them
Key derivative instruments and products

Case study: The benefits of using derivatives as an asset allocation tool

The swaps market

Definition of swaps
Types of swaps: currency and interest rates
Why swaps are used and by whom
Pricing and trading swaps

Exercise: Trading inerterst rate swaps: expressing a view

Case study: Using the swap market as an alternative to the bond market for the creation of fixed rate liabilities

The forwards and futures markets

The differences between futures and forwards
The origins of the markets
OTC vs exchange traded instruments
Types of futures and the role of the clearing houses

Case study: Comparing the costs and benefits of hedging with FRAs, futures and swaps

The options market

How options work in practice
The difference between exchange traded and OTC options
Some basic options theories and methodologies
Puts and calls
Determinants of price
Buying and writing options: how they are used in risk management

Case study: Managing risk

The credit markets

Why they are used
Determinants of credit pricing
Fundamental credit analysis techniques - sovereign and corporate securities
An introduction to ratio analysis
The role of the credit rating agencies

Case study: New issue arbitrage. Understanding the relationship between bonds, loans, asset swaps and credit derivatives

Future trends influencing the global financial markets

The credit cycle & liquidity issues
Growth of the corporate bond market
European and US investment trends
Developments in Pension Funds

Case study: The credit crunch explained: what were the causes? How have market participants responded? What's going to happen next?