Description
Welcome to this self-study workbook. It introduces you to the basic instruments, participants and procedures in the international capital markets. Developments in market practices and regulations particularly the impact of the European Monetary Union and the increasing globalisation of the markets, are also explored.
Module 1, 'Introduction to the capital markets, equips you with a good understanding of the basic concepts of the international capital markets - including the key characteristics of the products and the markets, and a review of the developments over the last few years. This module not only covers the cash markets (money markets, bonds and equities), but also the derivatives markets. Once you have completed this module, you should be well-prepared for the other modules in the workbook, which go on to develop these concepts further.
Module 2, 'International equity markets', explains the key characteristics which differentiate the markets, and reviews how shares are issued and traded on the international markets, particularly in the United States, the United Kingdom, Japan and Germany. The causes of the latest trends of computer-based trading and pan-national combinations of exchanges are also discussed. The core principles of valuing shares is explained, with a review of some of the latest techniques such as shareholder value, economic value added and management option valuation.
The development, main features and uses of the different products in international money markets - both government short-term debt as well as corporate products such as commercial paper are reviewed in Module 3.
Module 4, 'International bond markets', outlines the common features of Eurobonds, foreign and domestic bonds, primary and secondary markets, bond valuation, and yield curves.
Module 5, 'Government bonds', outlines the key aspects of the most important government bond markets; explains their relevance to bankers; and reviews procedures in the United Kingdom, the United States, Japan and Germany.
After completing Module 6, 'Interest rate and currency swaps', you will have a good understanding of swaps. The module explains what interest rate and currency swaps are, how they work and why they are used. It also introduces and clarifies some of the terminology used in the swap markets to minimise the confusion that sometimes arises between swap professionals and others. The newer products such as credit and equity- linked swaps are also reviewed in this module.
Module 7, 'Capital market mathematics', explains the basic mathematics of present value analysis, together with procedures for using a popular financial calculator, the Hewlett Packard HP-17BII, Other calculators and software packages perform the same functions, and the mathematical principles are in all cases the same. No prior knowledge is assumed of financial mathematics or of the calculator.
