THE ACADEMY OF FINANCIAL MARKETS WELCOME TO THE PRESENTATION! - - PDF document

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Feb 10, 2023 108 likes •220 views

THE ACADEMY OF FINANCIAL MARKETS WELCOME TO THE PRESENTATION! Summary - Application Overview Client needs Risk profile FM overview Solutions 1 Client needs Funding Retail vs. Business Investment Clients Risk

SLIDE 1

1

THE ACADEMY OF FINANCIAL MARKETS

WELCOME TO THE PRESENTATION!

Summary - Application

Overview

Client needs Risk profile FM overview

Solutions

SLIDE 2

2

Client needs

Funding Investment Risk protection

Retail vs. Business Clients

Risk protection – Controls, derivatives ,

insurance, etc

Risk Profile

Corporate Individual (Ex 1)

SLIDE 3

3

FM Overview

Cash Bonds Property Equity

Individual Funding solution

Debt instruments

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4

Individual Solution: Investments

Steps after needs analysis Active vs. Passive Active example (next slide)

Bus Cycle ->Asset Allocation

Phases of Econ Cycle

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5

Bus Cycle ->Asset Allocation

Interest rates phases over the Econ phases

Bus Cycle ->Asset Allocation

Equities allocation over phases

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6

Bus Cycle ->Asset Allocation

Cash allocation over phases

Bus Cycle ->Asset Allocation

Bonds allocation over phases

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7

Bus Cycle ->Asset Allocation

All Assets allocation over all phases

Individual Solution: Investments

Passive guidelines

Ex 2 Ex 5 Rebalance for passive investors

Your behaviour more NB than those of your investments Your view of the problem (volatility) is more NB than

the problem

Protect yourself against yourself (greed & fear)

Emergence of BF Active vs. Passive Active example (prev. slide)

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Individual Solution: Investments

Overconfidence Mental accounting Loss aversion (Ex 6, 7) Framing (Ex 8) Gamblers’ fallacy (Ex 9) Regret aversion BF = We are wired with character flaws

Corporate Funding Solution

A client approaches you to explain the pros and cons of funding his new business via: a) Shares (equity) in a CC

b)

Debt (loans, debentures, etc)

c)

Convertible debentures

d)

Combination of debt & equity Discuss the factors that must be considered to make each alternative viable.

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9

Corporate Investment solution

Sasol decides to invest its retained earnings in 1

f 3 alternatives:

a) Standard Bank shares

b)

Gas-to-fuel plant in Qatar

c)

Buy back its own shares Discuss the factors that must be considered to make each alternative viable

CIS Solution

UT Definition Overview Types

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Unit Trusts

R-, A-, B-funds Pricing Break-even price % Capital loss How many units can you buy with R3000? Value of unit trust investment (say 1200 units) How many units needed to sell to get R3000? Cheapest unit trust ito charges? Other collective investments (e.g.ETFs, PUTs)