International Capital Markets

This thorough and interactive course offers delegates a detailed grounding in the full range of capital market instruments. Attendees leave the class with a clear understanding of key drivers, players and features in the markets today, enhancing the opportunity for success in this increasingly complex area.

20-Oct-2008 -- 23-Oct-2008New YorkUSD$3975
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Various Instructors; ] Mon Tue Wed Thu Level: Basic
CPE Credits: 28.5

Risk Managers, Corporate Treasurers, Fund Managers, Compliance Staff, Corporate Market trainees, Private Bankers, Investment advisers, Portfolio Managers, Accountants, Regulators
No advance preparation required.
Students will be able to:
  • List the four core financial markets and the three classes of derivatives
  • Distinguish the global trends in volume for each of the plain vanilla financial products and show the macroeconomic reasons for those trends
  • Describe how bonds, equity, foreign exchange and money market products are traded
  • Structure and price a plain vanilla bond for the current market place
  • Read bond and equity listings and decide whether the deals worked well for the parties involved
  • Calculate key equity ratios such as P/E ratios, leverage and return on equity for international companies
  • Choose the best derivative to hedge against risk in real-life financial situations
  • Calculate the profit or loss on futures trades
  • Construct a swap and calculate the benefit of the swap to each counterpart
  • Invest the money held by a pension fund both geographically and by asset class
"Materials, explanation and the practical examples"
"Integration of articles and current evals. Very interactive with class."
"The materials were detailed and informative."
Day One

Key Markets and Players

  • Four Core Markets: debt, equity, money markets and foreign exchange
  • The Wholesale and Retail Players
  • League Tables
  • Inside an Investment Bank
The initial session sets out the four core financial markets; the key players in the financial markets; who does what best in the market place; and describes the structure of a typical investment bank. Activity: Strategic Asset Allocation In the role of major institutional investors such as pension funds or mutual fund managers, participants decide which asset classes would make appropriate investments and construct a portfolio accordingly.

Money Markets

  • Interbank Loans and Deposits
  • CDs
  • CP
  • Repos
  • Treasury Bills
  • Bas
Money markets are markets for lending or borrowing money for short periods of time. Participants apply the equations built in the TVM session to some financial instruments in the money markets. The session describes the whole range of money market products available and details their use and their pricing. Activity: Raising Funds Faced with four very different funding possibilities, participants must decide the safest and cheapest way for the CFO of a large corporate to fund cash shortfalls and justify their choices to the board.

Foreign Exchange (FX)

  • Facts and Figures on FX Volumes
  • Market Evolution
  • Story of an FX deal
  • Spot FX
  • Forwards
  • FX Swaps
Foreign exchange rates and money market interest rates are closely related. This session explains the relationship and analyses nominal rates from the perspective of current economic data. Participants analyze the key FX products, the historical evolution of the FX market and the current trends discernible in the market place. Participants follow a deal from execution to settlement to see the roles and responsibilities of the key players and different departments within an investment bank.

Day Two - Bond Markets

Time Value of Money (TVM)

    This session introduces the basic concept of time value of money and constructs the equations that constitute the building blocks of financial analysis. Participants practice using the equations to calculate financial yields

    Plain Vanilla Mechanics

      What is a plain vanilla bond? What do you receive as a bond-holder? How do you interpret bond data from screens and newspapers? Why do bond prices move and how predictable are those movements?

      Bond Classifications

      • Straights
      • FRNs
      • Convertibles
      • Asset Backed Securities (Structured Finance)
      • MTNs (Structured Finance)
      • Exotics
      The world of bonds classified according to structure and issuing jurisdiction. How popular are the different bond classifications to today’s borrowers and investors? Trading Simulation: A physical delivery chocolate trading game to reinforce trading mechanics and market-making techniques.

      Pricing Credit Risk

        The government bond curve provides a pricing benchmark for all other bonds issued in the same currency. This session demonstrates how credit risk can be priced using the credit ratings of the larger agencies and comparing government yield curves to corporate yield curves.

        Bringing a Bond to Market

        • Origination
        • Beauty Parades
        • Deal Structure
        • Book Building
        • Syndication
        • Pricing
        • Roadshow
        • Close & Settlement
        • Secondary Market
        Participants explore the bond issuing process from beauty parades and origination, through syndication to the close and settlement of the deal. The impact of recent regulatory changes on the process are included in the discussion. Activity: Pricing a Bond Using realistic market data and sentiment participants compete to price a bond and win the mandate to issue for a top corporate.

Day Three - Equity Markets

Where does Equity Come From?

    Compare the balance sheet definitions of equity with the market capitalisation definition of equity and analyse the creation of equity in companies

    Equity Key Ratios

      Certain ratios recur in all company analyses: price earnings ratio, earnings per share, dividend cover, dividend yield, EBITDA, margin, interest cover, earnings yield. This session describes each ratio, shows its uses and limitations and provides the opportunity for participants to calculate and interpret data for themselves Activity: Company Comparisons Using Key Ratios Calculate key ratios for two multinational corporates from the same sector. How do they compare with one another? Would you be a buyer or seller of the companies?

      Initial Public Offerings (IPOs)

        An IPO is a major event in any company's life. Here, the story of the entire process is revealed as the company counts down to impact day and the subsequent listing of shares on a stock exchange. Some of the regulatory concerns relating to independent research and share allocation procedures are also highlighted Activity: Mining a new Listing Data from an equity listing allows participants to describe a real IPO and glean as much information as they can about both the company and the issue.

        Stock Exchange and Equity Trading

          How are shares traded? What platforms are available internationally and how do they connect with the major international exchanges? What trends are discernible in equity trading and what volumes are being traded globally?

Day Four - Derivatives

Futures

    The futures market is a very old one serving the real economic purpose of risk reduction for agricultural producers and purchasers. From this starting point, the mechanics of futures trading is described and the more recent world of financial futures examined. Activity: Make the Trade Read the market views expressed and devise the most appropriate futures trade to make money.

    Options

      Put and call options are described using insurance as an analogy. The profit and loss profiles of various simple derivative positions are analysed and the wider uses of options explored. Activity: Futures vs Options For a variety of hedging and speculating strategies participants decide whether options or futures trades would work best and construct the best trade.

      Swaps

        Interest rate and cross currency swaps offer long term hedging potential to corporates and financial institutions. The most common risks reduced in this way are identified and the cash flows in plain vanilla swaps detailed. Activity: Reducing Funding Costs through Swaps Participants draw up swap deals and calculate savings made by entering into swap deals.

        Credit Derivatives

          What are they, how do they work and what benefits do they produce for their users?

Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process, and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only.

Lunch included for all students taking day classes.