Banking Professional Banking Fundamentals International

NCFM : Capital Markets Fundamentals International

The program covers key concepts in banking and finance such as Interest, Financial statements, risk etc. It gives you an overview of the different financial markets,with specific focus on US/UK geographies. It also takes you through the entire trade life cycle of an instrument – from issuance to asset servicing.

Overview of NCFM : Capital Markets Fundamentals International

The program covers key concepts in banking and finance such as Interest, Financial statements, risk etc. It gives you an overview of the different financial markets,with specific focus on US/UK geographies. It also takes you through the entire trade life cycle of an instrument – from issuance to asset servicing.

Table of contents

NCFM : Capital Markets Fundamentals International

ChapterTopics
Understanding MoneyConcept of Money: An introduction to money, as a standardized unit of exchange.Concept of Interest: What 'Interest' is; Simple and Compund Interest.Compounding and CAGR: Compounding, Effective Interest (Yield); CAGR & its usage.Time Value of Money: Future Value, Present Value, NPV, IRR with illustrations & the Excel functions.

Inflation: Inflation, Nominal Rate and Real Rate.

Financial Statements

An overview of financial statements - Income statement, Balance Sheet and Cashflow - format and key terms.

Understanding RiskIdentifying Risk: Types of risk a Financial Institution faces.Measuring & Managing Risk: Factors considered to measure risk globally; risk management techniques such as diversification, hedging, risk limits.

The Risk-Return Framework: How return changes, with the associated risk.

Financial FrameworkThe Financial System Framework: Instruments, markets, market players and regulators.Investment Banking: An introduction to Investment Banking, its purpose and its functions.Global Markets and Treasury: An overview of Global Markets and Treasury.

Regulators & Regulations: SEC,FSA, Federal Reserve and Bank of England). Key regulations-International Basel Norms, Reserve requirements etc.

Raising MoneyRaising Capital: The broad ways of raising capital for a business.Equity and Equity Instruments: The types of equity instruments (common and preferred stock) and key attributes (such as face value etc.).Depository Receipts (DRs): ADRs and GDRs - how they work.Debt: Sources of debt; the concept of debt instrumentsLoan from Institutions: A brief discussionIssuance of Debt Securities: The issuance process; key features of Debt Securities such as, Face Value, Maturity Period etc.Classification of debt instruments: Classification , basis tenor & Issuer - T-bonds, T-notes, Gilts, JGBs etc..Bonds & Debentures: Key - and often poorly understood - concepts such as Coupon & Yield. Types of Money Market Securities, such as: T-Bills, CDs, CPs, Repos, Fed funds rate.

The Capital Structure decision: How different factors affect the decision; concept of WACC

Investing MoneyInvestment Cycle: The stages: Financial planning, Risk profiling, Asset allocation, Portfolio Maintenance; the role of Asset Management Companies (AMCs).Funds (MFs): The structure of a fund, key features (US terms - sales charge, contingent deferred sales charge(CDSC), NAV) and benefits.Categorization of MFs: Categorisation of MFs basis Liquidity, Investment objective & Investment plan.

The Investment decision: The trade-off between Returns, Safety and Liquidity - based on investment objectives and priorities.

Financial Markets - Generic FrameworkTrade Life Cycle: Issuance, Pre-trade, Trade, Post trade, and Asset servicing.Issuance: Types of Issues (such as 'IPOs', 'FPOs' and 'Private Placements'), & the entire Issuance Process - US Dutch auction and European French auction process.Pre-Trade Analysis & Trading: Systems needed for pre-trade; trading process followed in international markets.Post-Trade: The stages :Clearing, Settlement, Settlement Conventions.Post trade systems and Monitoring systems.Asset Servicing: Income collection, Corporate actions, etc.

Role of Banks/FIs: Managing the issuance process, Research and Proprietary trading.

Financial Markets - EquityWorking of a Stock Market: A basic understanding of how stock trading works.Stock Market Participants: The participants of a stock market and their roles, such as: Member Firms or Brokers, Prime brokers, Specialists, Custodian Banks/ Agencies, Depositories, and Clearing Firms; understanding a Demat account.Stock Indices: What indices are; Key markets and their indices (Dow Jones, NASDAQ, DAX , etc).

Stock Valuation: Mark to Market (MTM);Realised and unrealised losses.

Financial Markets - Bond and CurrenciesBond Markets: Various participants & their roles: Government/corporation, commercial banks, investment managers/mutual funds, depository agency & clearing corporation, regulators.Bond pricing and valuation of bonds: Based on Present Value. Understanding coupon, bond price and yield.Money markets: Money Market Instruments - the difference from Bonds.Foreign Exchange Markets: Players, traded currencies etc.Exchange Rates and its key drivers: Factors affecting the Exchange Rate, Market Conventions.

Valuation of currencies: Valuation of currencies, with an illustration.

About faculty of NCFM : Capital Markets Fundamentals International

H Jaishankar
Jai joined ANZ Grindlays from campus, and moved on to Citibank, and then to Deutsche Bank, as head of Foreign Exchange & short term Derivatives trading for India.

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