Training Courses

Introduction to Equities

Category: Equity Analysis

Course level: Introductory

In house

This one-day course is designed to provide a fast-track understanding of the equity markets, equity analysis and the role equities play in client portfolios.

Case studies form an integral part of the course, to allow the delegates to consolidate the information and provide the basis for group discussions.

Objectives

By the end of the workshop, delegates will have a better understanding of:

  • different share classes, their rights and risks
  • stock markets, their roles and mechanics of dealing
  • new issue procedures
  • valuation and pricing methods
  • current asset allocation techniques including equities

Length

1 day

Course Content

Understanding the different classes of shares

Equities
Preference shares
What is the value of a vote?
Bearer vs registered shares
International equity (ADRs/GDRs, etc.)

Role of equities in client portfolios

Institutional portfolios
    Asset allocation
    Effect of MFR and impact on asset allocation
    Changing uses of equities in institutional pension schemes
Equity funds (unit trusts and OEICS)
    Investing for capital growth
    Investing for income

Stock markets

Trading systems
    Electronic trading vs open-outcry
    Quote-driven vs matched-order markets
    Role of market makers and agency brokers
Smaller markets and OTC trading
Settlement and custody

New issue procedures

Offer for sale
Rights issue
Placing
Pricing and underwriting new issues
 

Corporate governance

The listing rules
The model code
The Combined Code for UK listed companies
EU and US developments (Sarbanes-Oxley)

What makes share prices move?

Information sources
Market sentiment
Political, market, sector and company risks

Fundamental analysis

Looking at the accounts: P&L, balance sheet, cash flow statement
Cash flow analysis techniques
    Discounted cashflow
    What is the appropriate discount rate?
    Dividend discount models
Earnings and revenue-based models
Case study: Using a set of company accounts

Traditional ratios

P/E – its uses and drawbacks
Gearing
P/NAV
P/CF
Sector and market analysis
Problems with accounting-based analysis
Impact of IFRS on accounting ratios and analysis
Case study: Calculating and using ratios
 

Modern shareholder value analysis

CFROI
EV/EBITDA
Shareholder value analysis, EVA, MVA
    Calculating the WACC, discounting periods, terminal values
Case study: SVA analysis

Quantitative analysis

The capital asset pricing model
    Calculating the cost of equity
Beta and other risk measures
Arbitrage pricing theory
Using quantitative techniques to identify mis-priced assets
Forecasting equity returns
Calculating risk (standard deviation)
Managing risk
Case study: Calculating expected returns and risk of a security

Technical analysis

Charting
Filter techniques
Case study: Charts and their uses

 

This course would be suitable for:

  • Investment professionals
  • New entrants
  • Risk management

This course would be suitable for these exams:

  • CFA - Level 1
  • CFA - Level 2
  • IMC
  • SII Certificate - Securities
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