|Foundation||CPD: 28 hours||4 days||Live|
The Introduction to Capital Markets course is a comprehensive and intensely practical four-day program designed to give participants a clear idea of how the capital markets work, the range of instruments and securities issued and traded, and the roles played by the various participants in the market.
Participants will have an opportunity to put each topic into hands-on practice with real-life case studies, challenging workshops, and engaging simulations.
By attending this course, you will:
- Obtain a clear overview of the global capital markets
- Explore each market, and the services and products that each provides
- Appreciate the role of financial institutions and other players
- Examine a wide range of essential financial products from cash markets to derivatives
- See how each product is used in practice by issuers, investors, and other participants
- Gain insight into the techniques of equity valuation and modelling
- Understand the process of investment management and the goals of different types of investors
- Recognise the role of risk management
- Obtain practical hands-on experience
Who Should Attend?
Anyone working in the global capital markets.
Introduction to Capital Markets
This module sets the scene by explaining the vital role played by the global capital markets, and who the users are.
- Introducing the Capital Markets
- Services provided – what the markets are for
- Participants in the markets – who uses the markets
- "Buy-side" vs. "sell-side"
- Investors, borrowers, and intermediaries
- Role of investment, retail and commercial banks
- Origination vs. trading
- Government borrowers
- Corporate and commercial borrowers
- Institutional investors
- Mutual and hedge funds
- Pension funds and insurance companies
- Individual investors
- Regulation and control
Introducing the Cash Markets
An important part of the capital markets are the markets for "cash" products – like equities, fixed-income, the money markets, and FX. This module sets the scene and introduces the functioning and purpose of each product.
- The connection between investors and borrowers
- Primary vs. secondary markets
- The Equities Markets
- Offerings, Research, Valuation, and Sales
- Equities trading
- The Money Markets
- Fixed Income Securities
- Treasury and corporate bonds
- High-yield and emerging market debt
- Foreign Exchange
- The products in context
- search Applications for banks
- search Applications for clients
Market Dynamics and Trading
This section will feature hands-on practice using our unique Global Trader simulator, giving participants first-hand experience of the dynamics and practicalities of trading, and the roles played by banks, investors, traders, and customers.
- Market-making vs. price-taking
- Trading venues
- What drives market prices?
- What factors influence supply vs. demand?
- How to manage trading risk
- computer Equities simulation
Introducing Time Value of Money
The time-value-of-money concept is central throughout the capital markets. This module explains TVM concepts, and the principles of discounting and annuities.
- Time value of money principles
- Present and future values
- Interest and discount factors
- Simple vs. compound interest
- Discounting and compounding
- Discounted cash flows
- Net present value
- computer TVM Workshop
Equity Capital Markets
The equities markets are an important source of finance for new and established companies. This module explains how the equities markets work, how new issues are brought to the market, and how stocks are traded thereafter.
- Review of international equity markets
- Type of equity product
- Issuing procedures – IPO vs. SPACs
- search Analysing a recent IPO
- Role of the Stock Exchange
- The increasing importance of electronic, algo, and high-frequency trading
- Understanding the balance sheet, income and cash flow statements
- Debt vs. equity financing
- Company valuation techniques
- Stock indices
- Mergers and acquisitions
- computer Valuation exercise – how much is AAPL worth?
The Money Markets
This module explains the money markets – the market for short-term debt instruments used by governments, companies, banks, and investors.
- Discount vs. coupon securities
- Commercial paper (CP)
- Interbank deposits
- Certificates of deposit
- LIBOR, SOFR, SONIA, and €STR
- Comparing short-term investments
- search Comparing returns on money-market investments
Debt Capital Markets
The debt capital markets are one of the most important components of the capital markets, providing long-term finance for governments and corporations. This module explores the issuers, and the types of bonds which are issued.
- Bonds vs. equities
- US Treasuries
- Bunds, OATs, BTPs, JGBs and UK Gilts
- Corporate bonds
- Capital structure and seniority
- Bond rating
- Investment grade vs. high-yield
- Default and recovery rates
- Bond issuance
- search Analysing a recent bond issue
- Introduction to bond math
- computer Exploring price and yield
- Duration and the DV01
- Convertible bonds
- Securitised bonds
- Mortgage-backed securities and covered bonds
The Foreign Exchange Market
The Forex market is a global 24 hour $6.5 trillion-a-day market vital for commerce and trade. This module explains the role and functioning of the FX market, the participants, and the types of transactions which are traded.
- Functions and purposes of the FX market
- Market mechanics
- Quotation conventions
- Influences on the market
- computer FX spot simulation
- Outright forwards and FX swaps
- Relation between spot and forward markets
- search Handling transaction risk from overseas revenues
Derivatives have revolutionised the management of financial risk, and created huge opportunities for banks and their customers. This module explains the types of derivative contract, and how they are used to manage interest rate, currency, equity, and commodity risk.
- Futures contracts
- Stock index and bond futures
- How are stock index futures priced?
- search Tactical asset allocation using futures
- Interest rate swaps
- Currency swaps
- Equity swaps
- Credit default swaps
- Credit default indices
- search Swap applications
- Option terminology
- An intuitive insight into option pricing
- Stock and FX options
- Interest rate caps, floors, and swaptions
- search Hedging FX risk with options
Investment Portfolio Management
Professional investment managers and most individual investors manage a portfolio of securities, not just a single asset. This module explores investor motivations, the trade-off between risk and return, passive (index-tracking) vs. active investment management, and the different ways of measuring investment performance. The session ends with an intensive asset management simulation where participants work in teams to actively manage an investment portfolio over a simulated three-year period.
- What is risk?
- What is return?
- The risk-return trade-off
- Comparing fixed-income with equities
- Investor preferences
- Combining securities
- Measuring investment performance
- Investment benchmarks for equities and fixed-income
- Understanding beta and alpha
- Relative vs. absolute returns
- Passive vs. active investment
- computer Asset management simulation
Other Dates and Locations
Check our course schedule for alternative dates and locations where this course is offered.