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  UNITAR / PFT Online Course on 'FUNDAMENTALS OF THE EQUITY MARKET'

  Course Information
 
Introduction and Background

The equity market is a prominent member of the capital market. The only other member is the long-term debt market. The money market does not feature here, but it does pair with the bond market to form the debt market.

The equity market plays a significant role in the economy. It provides perpetual capital (= ordinary / common shares and in some countries perpetual preference / preferred shares exist) and long-term capital (in most countries = the definition of preference / preferred shares).

Long-term capital is essential for the development of commerce and industry and infrastructure, and no country can develop sustainably at a high level without the existence of entrepreneurs who have access to long-term / perpetual capital. Capital is provided in the primary equity market and traded in the secondary equity market. The latter is more efficient if the market is formalised, listing requirements are adequate and surveillance of members and listed companies is effective.

The secondary equity market is significant in that it facilitates price discovery for shares. Price discovery has many dimensions, including acting as a consensus view of investors (ie a disciplinary function) and a price for new capital (ie a capital allocation function). Generally well-managed companies are rewarded with high prices (= cheap capital) and poorly-run companies are punished severely in terms of low prices (= expensive capital).

Investors compare the pricing of shares on the secondary market with their view on the fair value prices (FVPs) of shares, and this has a major further impact on price discovery. Furthermore, prices are also driven by less sophisticated investors who are prone to the herd behaviour. This of course leads to periods of over-pricing (compared with FVPs) and under-pricing (ie the cycle is created).

In conclusion, the equity market can therefore be summarised as: the mechanisms / conventions that exist for the issue of, investing in, and the trading of marketable equity instruments that represent the permanent or semi-permanent capital of the issuers (companies).
 

Registration Status: OPEN
Deadline for Enrollment: when slots are full
Course Dates: April 26 to May 28, 2010
Estimated learning time: Minimum of 35 hours
Format: Online/Internet-based (asynchronous)
Language of Instruction: English
Fees: US $ 400/-
Helpline: UNITAR Geneva (Course Administration and Technical Questions)
      
  Course Objectives  
 


The overall objectives of the course are to:

  • Expose the student to the place in the financial system occupied by the equity market.
  • Equip the student to gain an overall view of the equity market.
  • Provide the student with the means to analyse the essential characteristics of the equity market.
  • Provide the student with the ability to evaluate company shares. 
  Target Audience  
 


The intended audience is:

  • Members and employees of securities exchanges.
  • Dealers in other parts of the financial sector.
  • Financial market analysts.
  • Economists.
  • Company treasury managers and dealers.
  • Employees of treasury management (outsourcing) companies.
  • Private sector bankers.
  • Central bankers.
  • Government treasury officials.
  • Large investors, such as retirement funds.
  • Trustees of retirement funds. 
 
  Expected Course Outcomes
 


After completing the course the student should / should be able to:

  • Elucidate the environment of the equity market: the financial system
  • Understand the instruments of the equity market.
  • Discuss the significance of the primary equity market.
  • Analyse the ownership distribution of equity and be insightful in respect of return and risk in the equity market.
  • Elucidate the elements of the secondary equity market.
  • Evaluate the fair value prices of listed equities. 
 
  Course Structure / Outline  
 


Course Structure

This online course will involve a mix of self-study and online interaction culminating in a practical understanding of money market through online group work. Throughout the duration of the course, participants will go through theoretical and conceptual material prepared by UNITAR and will have an opportunity to relate it to real-life situations through online discussions and peer-to-peer interaction. There will be a quiz/assignment at the end of the course which is a requirement for obtaining a course certificate.

Course Outline

There are 6 sections to the course:

Module 1 Equity Market: Context & Essence
A description (including illustrations) of the elements that constitute financial system is presented. This is the setting of the equity market, the definition of which is dissected in some detail.

Module 2 Equity Market: Instruments
This module presents a detailed description of the characteristics of the two varieties of shares: ordinary shares and preference shares. It also covers the negotiable instruments that represent equity, such as letters of allocation and warrants.

Module 3 Equity Market: Investors
In this module the ownership distribution of equities in the generic market is presented, including the motivation for holding equity. The statutory environment is then touched upon, followed by the various measures of return and other concepts of return such as the risk-free rate and the required rate of return. The counterpart of return, risk, is then dissected.

Module 4 Equity Market: Primary Market
This module starts with the economic function of the primary equity market. The "listing" of equity is then given prominence, including issues such as motivation, advantages and disadvantages, requirements, methods, steps, the prospectus, underwriting and so on.

Module 5 Equity Market: Secondary Market
This is the market that (almost) everyone knows so well, and the market where human behavioural patterns are played out repeatedly, causing (with other factors) the inevitable cycle. Issues covered here include: economic significance, structure, participants, trading, clearing and settlement, indices, efficiency and so on.

Module 6 Equity Market: Mathematics (Valuation)
Valuation of equity is a significant issue because buying or selling equity is (or should be) based on the fair value price (FVP) of the relevant security. Here we cover the three approaches to valuation: balance sheet valuation approach, discounted cash flow approach and relative valuation approach.

 

  Other Course-related Information
 
This course will be conducted over the internet using UNITAR's e-Learning infrastructure for a five-week period. Participants will require a minimum of 90 minutes of study each day. The course pedagogy will allow for three levels of interaction. At the first level, the participants will interact with the training content. At the second level, the participants will interact with other participants to share experiences and learn in a contextual manner (using an online discussion board facility). At the third level, the participants will interact with a seasoned international negotiator (course mentor) who will moderate the course for its entire duration. At the core of this course is a set of online interactions and discussions, each of which will be coached by an expert.

UNITAR online courses attempt to create a networked learning environment, in which participants have the flexibility to learn at their own convenience and pace but also are able to interact with peers and experts through the discussion board facility.

This online course will be conducted in the English language.
 

  Pedagogy  
 


This course is designed as an online course in which participants will be primarily responsible for their own learning. Each lesson will consist of the following components:

1) Basic Reading Materials (Compulsory Reading Materials): these materials are intended to educate the participants about the basic concepts and principles applicable to the subject-matter of the lesson. It will include, where appropriate, sample materials. These materials will constitute the required reading materials for the lesson

2) Advanced Reading Materials (Optional Reading Materials): this will consist of optional reading materials for participants who wish to learn more about the topic than what is covered in the lesson.

3) External Links: This will refer the interested participants to additional books, articles, documents, and websites that deal with the issues raised in the lesson.

4) Glossary: A glossary of terms tailored to the online course will be provided to the participants and act as a learning support during the entire course.

5) Quizzes: At the end of each lesson there will be a set of quizzes for participants to answer. These quizzes are designed to test the participant's understanding of the lesson. Participants are required to pass each quiz and obtain at least 80% or more passing grade in order to be eligible for a certificate. All quizzes will need to be taken online.

6) Community Discussion Board: There will be a community discussion board available on which participants can post questions or comments that can be seen by the instructor and the other participants. This discussion board will be moderated by the course director and UNITAR. Structured discussion strings will be posted on a weekly basis.

All successful participants will be eligible to a certificate after completion of this online course.

     
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