International Capital Markets

Agenda Program
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Prague, NH Hotel Prague
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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.

Program of the seminar: International Capital Markets

The seminar timetable follows Central European Time (CET).

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

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

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

Training catalogue in PDF
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