Investment – Process & Analysis

Main topics of study:

The Financial Services Act (1986):

  • Aims of the Act
  • Authorisation & Regulation of Financial Institutions & Advisors
  • Regulatory Organisations & Penalties Under the Act
  • Current Proposals for Improving the Regulatory System

The Analysis of Share Returns & Yields:

  • Profit & Risk Assessment
  • Return on Shareholders’ Capital
  • Understanding the Balance Sheet & Cash Flow Statement
  • Basic Ratios Used to Analyse a Company’s Solvency
  • The Concept of “Gearing”
  • Gearing Ratios
  • Profitability Ratios
  • Technical Analysis of a Share’s Performance
  • The Use of Charts

Indexes & Their Use:

  • The FTSE Index
  • Other Indexes
  • The Concept of Efficient Market Hypothesis

The Concept of Options:

  • Types Including Traded Options
  • Options as a Process of Hedging
  • Financial Futures (LIFFE)
  • Warrants

New Issues:

  • Procedures Including “Offer for Sale” by Fixed Price, or by Tender
  • Private Placings
  • Costs & Timing of New Issues
  • Underwriting
  • Allotment Procedures
  • Stagging of New Issues
  • Rights Issues
  • Scrip Issues

The Stock Exchange Dealing System:

  • The System Before October 1986 (Big Bang)
  • The Need for Change
  • The “New” System – Broker Dealers, Market Makers & Their Respective Roles in the Equity Market
  • Computerised Dealing – SEAQ & TOPIC
  • The Operation of the Gilts Market – Bank of England
  • Inter-Dealer Brokers
  • Broker Dealers etc.

The Settlement Procedure:

  • The New “Account” System
  • Contract Note
  • Stamp Duty
  • Transfer of Securities (Talisman)
  • Certificates & Their Future “Abolition”