Euromoney Audit Training

Participants will cover the following key issues:

• How securities are traded on exchange and over the counter including dark pools, direct market access and algo trading
• How the main players in the market place interact including the conflicts in place (eg inside investment banks)
• What the role of the investment analyst is in the valuation process
• How new shares are issued in an initial public offering
• The role of bonds in the financing of companies and governments including junk bonds
• The use of derivatives to reduce risk or to increase risk
• The Regulator’s position as the referee in the markets
• Controversies such as the Goldman Sachs deal which attracted the fine of $550m
• The role of hedge funds
  

 

Day 1

Session 1: International Capital Markets

· Introduction: market participants

· Organization of markets

· Over the counter trading

· Market cleanliness and market abuse

· Market efficiency

Case study: Sub-prime crisis

Session 2: Market microstructure: dealing in securities

· Quote driven versus order driven markets

· Agent versus principal

· Types of arbitrage

· Fragmentation

· Direct Market Access

Case study: Dark Pools and crossing networks

Session 3: The organisation of market participants

· Institutional structure of equity ownership

· investment banks internal structure

· Buy side organisation

· Services provided by brokers to institutional investors

Case study: Investment banking activities

Session 4: The role of the research analyst

· Regulatory history: dotcom abuses

· Preparing forecasts

· Assembling the peer group

· Identifying differences

Case study: investment research for major chemical company, AZ

Day 2

Session 1: Equity valuation techniques

· Key valuation ratios

· Using discounted cash flows

· Other methods to produce valuations

· Special case valuations: distress, break-up, asset-based

Case study: valuation of a major air line, Aer Lingus

Session 2: Issuing shares by IPO

· Selling old and/or new shares

· Advantages and suitability for IPO

· Due diligence and restructuring

· Timetable

· Underwriting

· Marketing the issue

Case study: Glencore IPO

Session 3: Secondary equity

· Rights issues timetable

· Pricing and discounts

· Underwriting

· Secondary or block trades

Case study: major insurance company rights issue and VTB secondary offering

Session 4: Bonds

· Pricing of bonds

· Credit quality and credit ratios

· Calculating yield

· Issuing bonds

Case study: high yield bond issue, Virgin Media

Day 3

Session 1: Derivatives: spot and forwards

· Spot markets

· Forward fx pricing

· Metal forwards

· Hedging with forwards

· Margin trading

Case study: Newcrest gold miner hedge disaster

Session 2: Options

· Definition and types

· Payoff charts

· Option pricing

· Using options to hedge risk

· Using options to execute trading strategies

Case study: Nick Leeson’s straddle strategy

Session 3: Credit derivatives

· Definition or a credit default swap

· Advantages over the underlying credit instrument (bonds)

· Sovereign CDS

· Credit-linked products

Case study: HSBC credit-linked bond

Session 4: Structured products

· Introduction to securitisation

· Legal structure and advantages

· Credit assessment

· Modelling the credit risk

Case study: Residential mortgage backed securitisation (RMBS)

Day 4

Session 1: Regulation

· Regulatory principles

· Treating customers fairly

· Best execution

· Client assets

Case study: Goldman Sachs Abacus case

Session 2: Regulation in the markets

· Market abuse

· Insider trading: the mosaic theory

· Intermediary abuse

· Soft soundings or pre-marketing: the leaf in a forest theory

Case study: Deutsche Bank and the Citigroup trading cases

Session 3: Accounting scams

· Role of management as agents of shareholders

· Temptation and alignment of interests

· Types of accounting scam

· Detecting accounting fraud

Case study: Xerox masterclass

Session 4: Corporate governance

· Board structure

· Audit committee

· Remuneration committee

· Appointments committee

Case study: review of international governance regimes

Day 5

Session 1: Interest rate swaps

· Definition

· Swap types: basis, currency, amortizing

· Floating rate notes swapped into fixed rate

· Inverse floaters

· Hedging interest rate risk

Case study: Issuing bonds with a swap

Session 2: Investment management styles

· Long-only investors

· Growth investors

· Value investors

· Index matchers

· Hedge funds

Case study: Ameranth hedge fund failure

Session 3: Event risk trading simulation

• Paul Richards

  Paul Richards graduated from Cambridge University in mathematics and has a Masters degree in business administration from London Business School. He is also a CFA charter holder, an Associate of the Chartered Institute of Bankers, a Member of the Association of Corporate Treasurers and a Fellow of UKSIP.
  
  Paul has more than 20 years investment banking experience specialising in domestic and international corporate finance at UBS (Warburg), HSBC and Map Securities (part of Skandia Insurance and Mapfre, Spain). He was also the chief executive of the London merchant banking operation of Credit Industriel et Commercial, a major French banking group.
  
  As a result of this experience, Paul has extensive first hand experience of: Mergers and acquisitions; IPOs; bond issues; secondary market issues; privatisation; debt syndications; corporate treasury; equity valuation; investment analysis; security and derivative valuation; private equity; modelling; corporate governance; and compliance. 
  
  Paul won the 2004 Wincott Foundation Prize for his article "Lessons in shareholder value" on the boom and bust in new economy stocks, published in Professional Investor (the journal of the UK Society of Investment Professionals - the UK member society of the CFA Institute). He has taught MBAs and Masters to Finance students at Cass and Cranfield Business Schools for more than 12 years in a range of financial disciplines; and has trained staff at major City houses and in banks on different continents.

  Courses run by this instructor

  • Mergers & Acquisitions - New York City
  • Structuring Leveraged & Mezzanine Finance - New York City

Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.

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