Introduction to the Global Financial Markets

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Course Content

Introduction

This section provides a general overview of the capital markets and explains the roles of the major institutional players, including:

• Investment banks and commercial banks

• Disintermediation: the role of the investment bank

• The global reach of the markets

• Market players: buy-side, sell-side and 3rd party. Who does what?

Markets & products: equities

This section introduces the world of equity, discusses the case for equity issuance and describes the key features of the main equity products, including:

• The case for equity: the corporate view

• Who issues and who invests?

• The product mix: ordinaries, preference shares and ADRs

• Stock exchanges: trading and dealing

Markets & products: bonds

Fixed income instruments are issued by corporates and governments alike. However, one size does not fit all.

This section explains the different types of borrowers, lenders and the instruments they trade between them, including:

• Bonds vs. loans and shares

• The product mix: a diversity of types

• Bonds and interest rates: a fundamental relationship

The issuance of securities

This section examines the process of issuance and details the similarities and differences between equity and debt, including:

• Origination and syndication

• Bookbuilding and placement

• Managing the deal: the role of the lead manager

Markets & products: derivatives – forwards and futures

Derivatives is a general term for futures, options and swaps. This section explains what they are, investor-types and the motivations behind using these instruments, including:

• Using FRAs to manage interest rate risk

• The role of derivatives: hedging or speculation

• The use of futures contracts

Markets & products: derivatives – options and swaps

• Options: concepts and strategies

• Liability and asset swaps

• Credit arbitrage

The world of credit derivatives

Learning Outcomes

By the end of the course, participants will be able to:

• Describe the marketplace in which investment banks operate

• Identify the main business areas of an investment bank

• Identify financial product types and services

• Explain the motivations of investing in different financial products

• Understand the range of different investor-types

• Know the ‘hot issues’ the financial marketplace now faces

• Identify the major players in the market

• Define market jargon and demystify financial terminology

• De-code the financial press