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Tag: capital market course

What Qualification Does One Need To Go For Capital Market Training?

Posted on by Imarticus Learning
Reading Time: 3 minutes

If you are passionate about the Finance industry and have a fine knowledge and interest in the Sensex and nifty, why not make a career in the Capital Market and become a Capital Market Analyst?

A Capital Market Analyst is the one who combines sales, consultation, trade, and banking and balances these to work for the cause. With the market growing vast, there is a rewarding career in the Capital Market Analysis. Today we have professional training in Capital Market that produces highly skilled analysts.

What does a Capital Market Analyst do?

The Analyst can be found working in a various established organization such as Hedge Funds, consulting firms, the investment banking group, and other related firms.

They have a key role in facilitating communication between the company, investment firms, and research organizations. Companies count on them to bring the best possible deal for the clients and investors both. Capital Market Analyst is the supporter of the business that seeks capital investment in their company or the other way around.

The responsibilities of a Capital Market Analyst are: 

  • Communicating with the investors: They are the first ones who start the communication with the investors and are also responsible to research about them in details.
  • Setting or negotiating price: It is the responsibility of the analyst to deal with the pricing and thus they need to be highly persuasive and also adjusting in nature.
  • Organizing events: These analyst act as the middleman between the firms and the companies and thus will make efforts and organize events for the frequent meetings.
  • Pitching documents: They prepare the pitching documents that contain clear messages with all the details and helps to put forward the case.
  • Closing the deals: Last but not least, the analyst’s seals and finalizes the deal and ensures satisfaction on both sides.

Qualifications and Skill required to become a Capital Analyst

It is a field which requires all-round varying knowledge and different skills to be put together to create huge profit for the employers. In today’s contemporary times, a specialist is preferred who have a specific area of focus but some key qualities need to be present in common.

They require prominent knowledge in :

  • Trading
  • Settlements
  • Custody
  • Compliance
  • Risk
  • OTC derivatives
  • Finance
  • Prime Brokerage
  • Knowledge of IT Softwares

To become a Capital Analyst, one will need at least a Bachelor’s Degree in Finance, Business, Statistics or related field. Though there are no hard and fast qualification requirements to train in Capital Analysis, having strong communication skills, negotiation skills, analytical and research skills will surely give an upper hand. Also, if you intend to become a specialist in certain fields such as Healthcare, Tech, Media and Communication, you need to have deep knowledge about the sector.

There are several pioneer institutes in the country that run Capital Market Courses and provide top-notch training in the making of Analyst experts. The capital market tutorial is an easy way to gain basics in this field that will boost up your start. These tutorials are easily available, highly simplified that ensures the technicalities of this field are easily understood.

Share and Derivatives Analysis

Derivatives are among the most powerful financial tools which mainly represents contracts between two parties and derives its value from an underlying asset. The most common types of derivatives are stocks, commodities, market indexes or interest rates.

With shares and derivatives as a fast-growing financial instrument category, it becomes of utmost importance that a company dealing with finance takes measures for Share and Derivative Analysis. Derivative Analysis plays a pivot role in eliminating risks and helps in making successful predictions about the company and its future performances. This analysis indicates how well a firm is doing in the market in comparison to its competitors.

Share and Derivative analysis manifest complete details about the company’s strengths and weaknesses, its business relations, financial performances and all those factors that affect its earnings, dividends and future growth prospects. This analysis tool is being used worldwide to initiate successful trades. The purpose of the analysis is to help make more financially sound investment-related decisions by the investors.

Ways to learn Share and Derivative Analysis

Today, we have access to multiple sources of education that are easily accessible and highly reliable. To learn about Share and Derivative Analysis, a beginner needs to focus on fundamentals and basics of derivatives. There are so many resources and different platforms that can help gain a strong and sound knowledge about how derivative analysis works. Few of the ways we can approach are,

  • Read books
  • Tutorial videos
  • Certified courses
  • Resources and guidelines available online and offline
  • Blogs and Articles
  • Online and Offline Seminars

All the above-mentioned categories are helpful for a beginner to gain knowledge in this field. A word of advice is to make sure the resources are reliable and credible. For more details, you can also contact us through the Live Chat Support system or can even visit one of our training centers based in – Mumbai, Thane, Pune, Chennai, Hyderabad, Delhi, Gurgaon, and Ahmedabad.

What is The Role Of Capital Market in Economic Development?

Posted on by Imarticus Learning
Reading Time: 4 minutes

What Is The Role Of the Capital Market in Economic Development?

Capital Markets play a crucial role to keep the economy functioning and the economy would collapse without it. The most advanced economies have the most efficient capital markets.

So, how does the capital market work and why is it so important for the country’s development?

Literally, the capital market is the kind of financial marketplace that facilitates the buy and sell of a wide range of long-term financial securities such as equity and debt along with short term funds such as treasury bills. The market where these securities are created is called the primary market and where already existing securities are traded is called a secondary market. Capital markets are the most important components and form a considerable proportion of the present-day economy.

Well-functioning markets ensure that both corporations and investors get or receive fair prices for their securities. 

An effective financial sector is vital for economic growth in a modern new-age digitized economy. It pools together the domestic savings to mobilize and provide capital for productive growth-related projects and industries. In the absence of such a system, most industries would never be able to grow and would fail for want of funds and thus growth and development would be directly affected and impacted.

The basic channels connecting the economy to the capital market discussed in any Capital market course are thus also connected to the economic growth, growth, and development of industries or facilities and economic measures for funding such growth.

Such financing methods are: 

Direct financing: Here the agents facing a money deficit interact and deal with those agents with a monetary surplus without intermediaries.

Indirect financing:

In this method intermediaries function between the two agents and ensure the fund’s needs are catered to. Such intermediaries could take the form of banks, insurance companies, investment funds, NBFCs, pension funds, and such. They not only provide funds but also securitize investments and purchase of assets in a major move to better capital demands.

Any capital market course should begin with answering questions related to what the Debt CM is. Most companies prefer to turn to DCM markets when they need funds for expansion but do not want to trade in their private ownership tag.

The DCM market is ideal since they deal with the sale of units called bonds. For the investors in bonds, this is a fixed-income investment where on redemption they get their money back along with attractive interest. The investment is low-risk and earns a fixed interest rate. Such funds are a short-term boon for firms needing funds for expansion without the dilution of ownership. It’s a win-win deal for both.

The different types of bonds:

The bond types are risk-of-default related and can be categorized as

  • The government bonds are at low risk for default.
  • The companies that issued investment bonds are also fairly safe from default.
  • The bonds that are high-yield are susceptible to risk and hence offer a better rate of returns.

The DCM also handles debt-equity issuances for several purposes. At times on reaching debt-maturity bonds are refinanced or reissued. At other times the expanding company may be looking to reduce cost-to-company capital.

Role of capital markets as economic growth drivers:

The capital market is an effective tool to drive economic development and growth.

Here’s why…?

The capital market effectively transfers monetary purchase power from surplus funds of investors to those with deficits for a fixed period in exchange for greater future purchasing power. They play a major role in recapitalizing and privatization of large infrastructure projects and industries. The privatization of banks, insurance companies, real-estate sectors, etc is a good example of this strategy.

The capital market channelizes and increases long-term savings to fulfil the monetary demands of companies with deficit funds to form long-term investments like pension funds, funeral expense covers, individual fixed investments, etc. This is especially useful for companies who wish to avail funds for a small price without going in for a change in ownership rights from private holding to equity holding etc.

Capital markets help provide equity for infrastructure development needs which tremendously impacts and provides for water and sewer systems, development of roads, energy, housing, telecommunications, socio-economic benefits provisions, public transport, and many more. Government bonds are the present means of financing such needs and provide the investors with low-risk appetites a guaranteed pay-back after the fixed term with an attractive interest rate.

Empowers the government strategy of social inclusion and economic growth by providing platforms and thrust areas wherein industries can compete globally, forge private-public partnerships, use capital efficiently, increase domestic productivity and spur growth, global integration, and better economic development.

The capital market mechanism provides for regulating the markets, covering risks according to appetites, ensuring good investor returns, and preventing the complete decay of stock market policies.

Importance of Capital Market for an Economy

It is only with the help of the capital market, that long-term funds can be raised by the business community.

Existing companies, because of their performance will be able to expand their industries and also go in for diversification of business due to the capital market.

Capital markets help individuals generate wealth and invest in their future. It provides an opportunity for the public to invest their savings in attractive securities which provide a higher return.

Also, the capital market provides an opportunity for the investing public to know the trend of different securities and the conditions prevailing in the economy.

Capital Market Training Courses

The DCM and ECM offer various job roles in the banking sector for capital markets. The investment banking course at Imarticus Learning is specially designed to help you hit the ground running.

It has modules for resume building, personality development, and interview facing techniques besides a robust financial Capital Market Tutorial curriculum. You will need classroom training, mentorship, certification, and experience to help you stand out from the many IB career aspirants. Enrol immediately at Imarticus today!

 

Trade life cycle in Capital Markets

Posted on by Imarticus Learning
Reading Time: 3 minutes

Trade life cycle in Capital Markets

Any financial instrument traded in the market is determined by its supply and demand in the capital market. First, let us try to understand what are financial instruments and capital market. A financial instrument is a certificate of ownership for any kind of monetary contract between parties. It can be company shares or bonds or any stock owned by a person after a monetary arrangement and paid to the respective parties.
And a capital market refers to the place where different institutions and entities trade these financial instruments. For instance, the stock market in India is one of the biggest capital markets in the world, and the Bombay Stock Exchange (BSE) is the oldest in Asia. For better understanding, one can opt for Capital Market Course and capital market tutorial provided by experts in the domain.
In order to understand how these financial instruments are traded, we first need to know the process of the trade life cycle. It follows the following steps:
1. Order Initiation and Delivery
The main idea behind any trade is the profit that one generates within a stipulated time though their investment. Similarly, in the stock market, an order is initiated by a retail client or an institutional investor through a broker or an agency, keeping in mind the perception of the movement of the share market. These orders are placed through the brokers with the help of online trading or through phone calls.
By market order, we mean the buy or sell or share or stocks of listed companies in the share market. When orders are placed, the broker or agencies record and process them carefully and allocate the shares or stocks to their respective clients.
2. Risk Management and Order Processing
In buying and selling shares by the investor, the broker places a query to verify whether sufficient balance is being maintained in the client’s account or whether sufficient stocks are available, respectively. Upon confirmation on the same, the order is placed while the order receipt is being generated. Any default by the investor has to be made good by the agency to the clearing institution. Therefore, the risk management by brokers or agencies comes at a price, called a margin which is levied by the clearing institute, and their responsibility to recover the same from their clients.
3. Order Matching and Trade Conversion
Once orders are collated by the broker from their clients with their respective quantity, amount, date and time, they are sent to the exchange for verification and to allot respective shares and volume accordingly. The clients are charged a minimum commission as a brokerage fee by the agencies and an official order confirmation through mail or post are being forwarded in the form of a contract note. The client details are recorded by the broker and are assigned a unique customer ID for each of them for trade convenience.
4. Trade Confirmation and Validation
An agency called a custodian is engaged by every institution in order to assist them in the clearance and settlement processes. The institution, with the assistance of their fund manager, sends details to the custodian about the order allocation including the type of securities, quantity, and price for the respective orders. This process prepares him to be aware of the trade details he is soon expected to receive from the broker along with their commission charges.
The custodian thus compares and validates the trade details and forwards an affirmation note to the broker. To know the basics of online trading and how it functions, nowadays it has become much easier as there are organizations offering capital market course and capital market tutorial by experts at reasonable rates.
5. Trade Settlement and Clearance
Trades executed are being collated and are settled 2 days after the transaction i.e. T 2 days. Once the clearing institute or corporation informs regarding their obligations to the investors on their securities and funds, the balance of payments are executed.
This follows the allocation of shares and funds in the respective demat accounts of the investors. Share amounts are credited to their linked accounts as sales proceed, and respective shares allocated for their volumes being invested. The detailed report is again forwarded by clearance houses to the guardian and to the exchange offices for records purpose.

Other Resources: 

What is Trade Life Cycle

Difference Between Trade Affirmation And Trade Confirmation

DHFL Default and The Impact On Money Market Mutual Funds

Posted on by Imarticus Learning
Reading Time: 3 minutes

 

The facts:

  • The Medium-Term Fund DHFL Pramerica has a 37.42 per cent risk exposure and is the top among worst-hit MF schemes.
  • As on 30th April, about 165 MFs have had some risk-exposure to the DHFL MF and report a greater than 5 percent of AUM.

Action by rating agencies:

No wonder the rating experts ICRA and CRISIL were quick to downgrade Home-Financer DHFL after the interest default to investors on its NCD issues. The liquidity-starved DHFL missed its deadline for payment of investor interest on NCDs.

Earlier in the year, ILFS the largest NBFC player on the market defaulted on its payments causing the cash-crunch for other NBFCs as investors grew wary and the capital markets declined lending to shadow NBFC lenders.

The downgrades by ICRA and CRISIL from A4 to a miserable D on the DHFL commercial papers-CP are indicative of the lack of trust in NBFC sectors fund management. Of the total 850 Cr Rs outstanding-CPs, June will see the maturity of around 750 Cr Rs. Not only is the liquidity position poor, CRISIL states the chances of funds being raised on time given the market conditions, are also poor. This means DHFL will have no option but to defer the maturity payments too, adding to its woes.

Officials from DHFL clarified that according to the trust deed, a curative seven day period is present when interest payments are not made on the due date. The default starts only after this period according to them. Obviously given the pressures of the banks and market-leading areas to further funding for NBFCs the impact on the capital markets for MFs will be negatively impacted.

The statistics:

Currently, the MF schemes have an exposure value cumulatively of 5,336 Cr Rs on DHFL issued securities. Another 24 AM firms dealing in 165 MF schemes from DHFL MF, report exposure to it as on 30th April. Of this pool about 106 MFs report more than 5 percent exposure of their assets managed by them. According to insider sources the MFs have assessed the DHFL securities written-down values as 75 percent asset-value for most securities. The unsecured-bonds have a WDV of 100% according to them.

Medium-Term Fund DHFL Pramerica, is the most affected MF scheme with an exposure of 37.42 percent. The Floating Rate Fund DHFL Pramerica reports exposure of 31.94 percent, the %), the Short-term  Maturity Fund DHFL Pramerica of 30.47 percent, the Bond Fund of Tata Corporate a 28.21per cent and the Hybrid Fund of JM Equity a 24.61per cent exposure.

The NAV-drop of these MF funds is directly proportional to their DHFL MF exposure. Just as an example the Bond Fund by Tata Corporate saw a drop of 29.69 percent of its NAV on the night of DHFLs interest default.

The assessments:

In response to such drops in NAV the MF DHFL Pramerica, a conjoint-promoter of the AMC was considering funds inflow stoppage to the affected schemes of DHFL where interest payment obligations are unmet. In its written reply to a query by Mint,

The AMC spokesperson stated they were restricting the further purchases of the debt-affected schemes in a bid to safeguard investor interests in the MF schemes.

According to UTI Asset Management’s Fixed income head, Amandeep Singh Chopra, the regulatory guidelines were followed while the WDV and exposure were secured. A SEBI anonymous spokesperson added that it would assess the impact of the DHFL interest default on other MF schemes and if such MF securities were valued as per SEBI norms and guidelines. If the 25 percent exposure limit was breached SEBI contemplates penal action and asking the scheme affected to make good the losses and refund investors. The spokesperson also added that the MF DHFL Pramerica will be given a chance to explain why it breached and failed to limit the set investment limits of SEBI already communicated to them in writing.

Chairperson Dhruv Mehta of the Foundation of Independent Financial Advisors felt   SEBI should reassess the set limits for corporate groups and individual issuers. Plan Ahead Wealth Advisors’ Founder Vishal Dhawan cautioned investors to check the concentration risk- exposure of a particular group/issuer to arrive at the exposure of the MF.

Full Circle Financial Advisors and Planners Proprietor Kalpesh Ashar, says there is no information on how deep the impact of the problem is and that investors should refrain from trying to make a killing on such MFs when and if they recover. However, the DHFL Pramerica MF claims ignorance of any SEBI probe or violation of norms and SEBI guidelines.

In parting, such MF assessments can be learned best in a Capital Market Course at Imarticus Learning.

 

L&T and Mindtree – Hostile Takeover or Investment Strategy

Posted on by Imarticus Learning
Reading Time: 3 minutes

Understanding the market trends and bids for hostile takeovers or investment strategy is of prime importance in investment banking and financial careers, which are evidence and data based on their forecasts. The L&T case study is an interesting example of how one can use the strategy effectively in takeover bids or in placing investment bids based on smart predictions and forecasts of the capital markets.
The L&T group is well known in the capital markets with L&T‘s construction division securing the order for the 2nd phase of Bangalore Metro and L&T Infotech completing the acquisition of four companies including Neilson and partners of Germany. L&T Infotech went public in the year 2016, and its latest move to spur its growth by the acquisition of MindTree is hotly debated in trading circles.
Markets are abuzz with rumours of VG Siddhartha the Cafe Coffee Day founder and largest stakeholder in Mindtree striking a deal for selling his 20% stake in MindTree to L&T Infotech. For L& T the Mindtree acquisition will give it global presence and the much-needed portfolio expansion of its investment strategy and a potential area for expansion into IT services, media and technology industries the forte of Mindtree which reported a Q3 profit with a 35 percent increase in consolidated and net profit.
Is it a hostile take-over?
According to Mint, its inside sources claim to have knowledge of India’s giant construction and engineering company, and that Siddhartha is all set to seal a binding deal closure in the nearby future which triggered a hostile bid for the takeover of MindTree. L&T has offered to up its stakes to 51 percent to ensure a loss of control by the current management team of Mindtree.
The promoter’s of Mindtree and its founding members Subroto Bagchi, Krishnakumar Natarajan, Rostow Ravanan and N.S. Parthasarathy is an unhappy lot, with a collective stake of a mere 13.32 percent and are set on resisting such a move which is evident from their resistance to the M&A offers in the recent past. Large fund operators in the private equity market like Baring PE Asia and KKR & Co are also not so shy in showing interest in acquiring MindTree.
CCD founder VG Siddartha’s story:
Early investor Siddhartha acquired an interest in Mindtree in 1999 and systematically built up his investments to a large holding of 3.3 percent of the stakes with 54.69 lakh shares by 2018 Q4.
His firms Coffee Day Enterprises Ltd owned more than a 10.63 percent stake of 1.74 Cr shares of  MindTree and Coffee Day Trading Ltd, accounted for 6.45 percent of the shareholding. Ashok Soota, the former chairperson and shareholder, were effectively bought out by systematically planned buying of a stake in MindTree by Siddhartha. It is of interest to note that management rights are not included in the large stakeholding and Siddhartha vacated the MindTree board last year.
Is it just a smart investment strategy?
Per the daily Mint’s reporting, Siddhartha the CCD founder borrowed a sum of 3,000 Cr Rs by pledging his entire personal and firms holdings in Mindtree to various foreign and domestic lenders. His repayments of loans have been irregular, and it is anticipated that lenders may invoke the share pledges if he fails to repay and regularise his borrowings from the capital markets.
This move will impact the bid by L&T to take over Mindtree’s control. L&T hence quickly offered to step in with a letter-of-comfort providing a two-month moratorium on the pledge invocation measures initiated by the lenders. L&T Infotech, which is into digital and technology consultancy solutions, is making a smart move in getting market antitrust approvals from its market represented areas like the US, India and European Union countries.
Conclusion:
Mindtree, with its profitable and robust presence in the fields of technology and media, was ripe for a potential sale of stake by Siddartha. It could be an ingenious investment strategy to bail him out with the two-year moratorium. But the resistance of stakeholders and voting partners of MindTree add credence to a hostile takeover bid.
Whether it is a hostile take-over or investment strategy, these trends are best evaluated by doing a Capital Market Course with reputed training partners like Imarticus Learning. It is crucial that you know how to use predictive analysis, data analytics and big data if you are a career aspirant in the investment banking field of capital, equity, and debt markets. Hurry and enroll!

India and Japan Enter into A $75 Billion Swap Contract

Posted on by Imarticus Learning
Reading Time: 2 minutes

 
October 29th 2018 marked one more important event that took place between India and Japan. After the meet between the prime ministers of the two countries, it was decided that India and Japan enter into a 75$ Billion bilateral currency swap agreement. This agreement is deemed to strengthen the foreign exchange and capital market in the country. This bilateral swap agreement was a result of serious discussions pertaining to the issues faced by India. Such $75 Billion bilateral agreement is the largest swap agreement in the globe said the Economic Affairs Secretary Subhash Chandra Garg.
This major decision was made during a meet between Prime Minister of India Narendra Modi and the Prime Minister of Japan Shinzo Abe. This agreement ensures the cost of assessing the foreign capital market will be improved for India along with the availability of use of foreign capital when needed during a crisis.
Economists foresee that these bilateral agreements will help India in tapping foreign capital developments better than before. In order to develop an interest in investment in infrastructure, the RBI will relax hedging requirements for Japan.
India and Japan creates history
Finance minister Arun Jaitley tweeted in connection with this news that this swap agreement is 50% higher than the previous swap agreements between India and Japan. It is to be noted that in 2013 Japan had offered a %50 Billion swap agreement and a $3 Billion swap agreement for 2008. These swap agreements depict that such agreed amount of foreign capital will be available to India if the need arises in future. Which also means India can get dollars in exchange for rupees under these agreements. These agreements are considered as a means of short term liquidity when the situation demands. Business analysts also state that the bilateral swap agreement between Japan and India is also a means to boost confidence in the Indian market overseas.
Prime Minister of Japan Abe addressed the media stating that the relationship between India and Japan is one of the most potentials in the globe. Abe further added that A strong Japan benefits India and vice-versa. Joint operations of the army, navy and airforce among the two countries have been fostered by Narendra Modi and Abe by means of cross-servicing agreement.
A super-express railway agreement between India and Japan has been signed in its second phase to further encourage the strong ties between the two countries. Adding to this is the joint infrastructure projects by India and Japan along with Srilanka.
The better future relationship between India and Japan
These swap agreements add a wall of defence surrounding the foreign exchange reserves which accounts more than $300 Billion that the Reserve Bank of India has at its disposal. It is to be mentioned that India had more than
$500 Billion foreign reserves which reduced as the Foreign Portfolio Investors have pulled out more funds. Amidst other Asian currencies, the rupee has depreciated the most which also accounts the high price of crude, increased interest rates of the US and other trade wars.