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Financial markets & financial instruments

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Financial Markets presentation by Farid Sattarov, Qrant Invest director....

Financial Markets presentation by Farid Sattarov, Qrant Invest director.
Qafqaz University, Aze

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  • 1. Short information about Qarant Invest  Facts:  1) was established on August, 2011;  2) staff – 7 workers (3 CFA candidates);  3) has brokerage license;  4) offers trainings;  5) offers brokerage services on foreign financial markets;  6) on September, 2011 signed Memorandum with American Alumni Association;  7) on November, 2011 signed Memorandum with Qafqaz University;  8) already launched offline brokerage services;  9) will launch Qarant FX online trading platform in January, 2012.www.qarantinvest.az
  • 2. Financial market – what’s that?  Financial market is a mechanism that allows to buy/sell financial instruments.  Almost every person (and almost all types of organizations) can become participant of the financial market (domestic and foreign markets).www.qarantinvest.az
  • 3. Financial marketsCurrency market Capital market Money market Derivative market Equity market Short-term Futures market FOREX debt obligation Bond market Options market marketwww.qarantinvest.az
  • 4. For what we need financial markets?  Financial markets give the next mentioned opportunities:  1) opportunity of borrowing money from the market with low interest rates through issue of debt obligations;  2) opportunity of attraction money through initial public offering (IPO);  3) opportunity of risks lowering for existing financial operations;  4) opportunity of investing money in financial instruments for getting future profit;  5) etc.www.qarantinvest.az
  • 5. Participants of financial markets List of participants: 1) banks; 2) investment funds; 3) pension funds; 4) insurance companies; 5) corporations; 6) brokerage companies; 7) individuals.www.qarantinvest.az
  • 6. What does financial instrument mean?  A financial instrument is a tradable Investor asset of any kind, either; evidence of an ownership interest in an entity; or a contractual right to receive, or deliver, cash or another financial Broker instrument.  Investors buy/sell financial instruments through brokers. Exchangewww.qarantinvest.az
  • 7. History of trading methodswww.qarantinvest.az
  • 8. Currency market Currency market is very famous as a FOREX (foreign exchange). Financial instruments available for trading on this market are the currencies of different countries (currency pairs). The main financial instruments on the FOREX market are: 1) EUR/USD 2) GBP/USD 3) USD/JPY 4) USD/CHFwww.qarantinvest.az
  • 9. Main currency traders Rank Name Market share 1 Deutsche Bank 15.64% 2 Barclays capital 10.75% 3 UBS AG 10.59% 4 Citi 8.88% 5 J.P.Morgan 6.43% 6 HSBC 6.26% 7 Royal Bank of Scotland 6.20% 8 Credit Suisse 4.80% 9 Goldman Sachs 4.13% 10 Morgan Stanley 3.64% Other traders 22.68%% of overall volume, May 2011www.qarantinvest.az
  • 10. Stock market Basically stocks and bonds are traded on the equity and bond markets accordingly. Stock’s opportunities: 1) Voting right; 2) Opportunity of getting capital gain; 3) Stock represents a part of net assets of entity. Bond’s opportunity: 1) Fixed income; 2) Privilege during bankruptcy.www.qarantinvest.az
  • 11. Stocks – short information  Stock of a business entity represents the original capital paid into or invested in the business by its founders.www.qarantinvest.az
  • 12. Stocks – short information  There are two main types of stocks: common and preferred.  Common stock:  Preferred stock:  1) gives a voting right  1) does not give a voting right  2) pays non-fixed dividends  2) pays fixed dividends  3) can not be convertible  3) can be convertiblewww.qarantinvest.az
  • 13. Stocks – short informationwww.qarantinvest.az
  • 14. Stocks return examples Company name January 2009 June 2011 Apple 85.88 335.67 +290.85% Ford 2.30 13.79 +499.56% J.P.Morgan 31.19 40.94 +31.26% Caterpillar 44.91 105.15 +134.13% McDonald’s 62.38 84.32 +35.17% Figures in US dollarswww.qarantinvest.az
  • 15. Resources for stock analysis  There are some very interesting web-sites with qualitative information about stocks.www.qarantinvest.az
  • 16. Bonds – short information  In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obligated to pay interest (the coupon) to use and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals.www.qarantinvest.az
  • 17. Bonds – short information Bonds List of sub-types of bonds: Fixed rate bonds Floating rate bonds Government bonds Zero-coupon Corporate Treasury bonds Municipal bonds etc.www.qarantinvest.az
  • 18. Bonds – short information I want to invest 1000 USD in corporate fixed rate bond We can offer You 5,00% 3-year bond for 1000 USDwww.qarantinvest.az
  • 19. Bonds – short information Third year – 1000 + 50 USD (nominal and 5,00% of 1000 USD) Second year – 50 USD (5,00% of 1000 USD) First year – 50 USD (5,00% of 1000 USD) 1000 USDwww.qarantinvest.az
  • 20. NYSE New-York Stock Exchange stock Number of world’s largest NYSE is thelistings --- 2317 exchange by in 1817. Currently was founded market capitalization (15,97 is located at 11 NYSE trillion dollars as of December 2010) Wall Street, New-Yorkwww.qarantinvest.az
  • 21. NASDAQ NASDAQ islistings --- 2872 Number of the world’s second Stock Exchange largest stock exchange by market was founded in 1971 capitalization (4,93 trillion dollars as of December 2010)www.qarantinvest.az
  • 22. Tokyo Stock Exchange Tokyo Stock Exchange2292 world’s Number of listings --- is the was foundedstock exchange by third largest in 1878 market capitalization (3,82 trillion dollars as of December 2010)www.qarantinvest.az
  • 23. LSE London Stock Exchange is the world’s Number of listings --- 2966 fourth largest stock was founded in 1801exchange by market capitalization (3,61 trillion dollars as of December 2010)www.qarantinvest.az
  • 24. Futures market Types of futures contracts: 1) Futures for is a derivative financial instrument Futures oil; 2) Futures for gas; (contract) with future delivery. 3) Futures for currency; 4) Futures for interest rate; instruments of the The main financial 5) Futures formarket are contract based on futures wheat; 6) Futures for meat; financial items and commodities. 7) Futures for gold; 8) Futures for silver; 9) Futures for stock indices; 10) etc.www.qarantinvest.az
  • 25. Futures – short information  In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date.  The contracts are traded on a futures exchange.  In many cases, the underlying asset to a futures contract , may not be traditional commodities at all – that is, for financial futures the underlying asset or item can be currencies, securities or financial instruments and intangible assets or referenced items such as stock indexes and interest rates.www.qarantinvest.az
  • 26. Futures – short information 41 Sell 40 39 38 37 36 35 Buy 34www.qarantinvest.az
  • 27. Options – short information  In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the corresponding obligation to fulfill the transaction.www.qarantinvest.az
  • 28.  Thanks for Your attention