International Capital Markets

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