Financial Markets and Instruments

In this week we make an overview of the global financial system. In this lecture we discuss the nature of financial markets and financial institutions and their role in the economy, introduce securities and other financial instruments and contrast two types of financial systems: Anglo-Saxon versus Continental. In the second lecture, we consider the definition of emerging and growth leading economies and understand why they are so attractive to investors and how they differ from each other. After this we explore what is common in investors' perceptions across emerging markets. Then we deep dive into the two largest emerging economies: China and India and understand the similarities and differences between them. Lastly, we will examine how the fourth industrial revolution affected global financial markets and what are the most interesting future trends in financial markets.

In these lectures, we will give 360 degrees overview of equity securities and equity markets. In the first lecture, we will focus on the fundamentals of equity securities, consider types of stock, discuss possible corporate actions and touch upon equity-based derivative securities. We also discuss equity indices and ways of their calculations.

In the second lecture, we will elaborate on the role that financial intermediaries play in financial markets. That we get to the core and learn how the primary and secondary equity markets are working. Then we will get acquainted with two exchanges – one from the developed market (NASDAQ) and the second is from the emerging market which is the Moscow Stock exchange. Of course, we will discuss the process of the initial public offering and consider the example from the Russian market. And in the last section, we elaborate on how the exchanges can embed sustainability within their operations. And do not forget to view the exciting interviews with equity market professionals from an emerging market.

This week is devoted to fixed-income markets. In the first lecture, we will give the definition of fixed-income securities, classify them, and consider the basic features of each type of them. In the second lecture, an expert from the rating industry will talk about his first-hand experience in assigning and maintaining credit ratings in international and national rating agencies. We will deep dive into the methodologies of rating agencies for various types of fixed-income securities as well as critique the international rating agencies, and discuss their regulations and the future. Be sure to watch our interviews. An analyst from Fitch Ratings will talk about the specifics of rating banks from emerging markets. And the director of KPMG will tell you about the interesting profession of a rating advisor.

We will start this week with a lecture by our graduate-the executive director of one of the largest Russian banks - on the topic of mezzanine financing. He focuses on the specifics of this type of financing, as well as the differences between mezzanine financing in emerging and developed capital markets.

In the second lecture, we will build the knowledge and explain the concepts needed to understand how managers and traders interact with markets and choose trading strategies and tactics. We will start with the refreshing of positions an investor can take in an asset. Then we discuss the market microstructure, get an understanding of elemental orders and see how various orders can be constructed from elemental orders. Then we will discuss the types of traders, their preferred order types as well as trade execution decisions and tactics. And as the world becomes more digital, we will discuss the features of algorithmic trading and will try to uncover the future of trading.

Now we are ready for the final course project. Good luck!