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Applied Equity Research & Report Writing

COURSE DESCRIPTION

Equity research involves gathering relevant information about a company, analyzing it, and coming up with a recommendation that investors and Financial Institutions can use for decision making purposes. These reports are used by internal and external stakeholders to make important investment decisions.

CERTIFICATION AWARDED

Our professional Equity Research program covers both qualitative (Economy, Industry & Company) & quantitative analysis (Financial Statements, Ratio analysis & valuation) using live cases. The program also shows you how to write a proper research report with detailed examples.

CERTIFICATION AWARDED

On successful completion of the program, you would be awarded the professional certification in “APPLIED EQUITY RESEARCH & REPORT WRITING” by Moody’s Analytics and EduEdgePro.

COURSE OBJECTIVES

  • Building a comprehensive financial model.
  • Understanding discounting concepts, cost of capital and discounted cashflow analysis
  • Understanding Absolute and Relative valuation techniques
  • Valuing a company or investment using Excel
  • Understanding complexities of Valuation including valuation for emerging companies, distress companies and take over or acquisition targets
  • Comparing and contrasting the various forecasting and analysis techniques
  • Understanding Ratio Analysis and creating ratio dashboards
  • Building Equity Research Reports and Giving Recommendations

WHO SHOULD ATTEND

This course is aimed at those with a solid financial background who wish to explore the more advanced aspects of Equity Research, financial modelling and valuation methodologies, including:

  • Investment Bankers
  • Equity Analysts
  • M&A Professionals
  • Fund Managers
  • Treasurers and Finance Directors
  • Commercial Bankers
  • Private Equity & Venture
  • Capital Specialists
  • Business Analysts

Fast Facts

Certified by : Moody’s Analytics and EduEdgePro

Broad Coverage:
  • Overview of Equity Research
  • Equity and Debt Financing
  • Understanding Financial Statements and Ratio Analysis
  • Macroeconomic Analysis – Economic Cycles and Inter-Market Analysis
  • Industry and Company Analysis
  • DCF Valuation and Cost of Capital
  • Multiples Based Valuation
  • Valuation Complexities
  • Valuations using Real Options
  • Valuing Distressed Assets
  • Valuing Fast growing companies
  • M&A Valuation

DETAILED CURRICULUM

This section introduces the concept of Equity Research that includes buy-side and sell-side research and also covers equity and debt financing. The section then elaborates on various financial statements such as Income Statement, Balance Sheet and Cash Flow Statement. This section also covers financial ratios categorized under Profitability Ratio, Solvency Ratio and Liquidity ratio.

Equity Research Overview
  • Overview of Equity Research
  • Types of Research: Buy side research and Sell side research.
  • Typical Day on the life of an Equity Research Analyst
Equity financing
  • Primer on Equity Markets
  • Minority interest- impact on equity financing
  • Common shareholders- forecasting dividends and retained earnings
  • Share buy-backs and rights issues
Debt Financing
  • Linking cash flow and debt requirements
  • Different types of debt financing

This section is designed to introduce bond market. The participants will understand yield, yield curve, bond pricing. The course comprehensively explains concept of Macaulay duration, modified duration and convexity.

Categorization of Bonds
  • Categorization by Issuer
  • Categorization by Coupon and Maturity
Characteristics of Bonds and Interest Rates
  • Present Value, Price and Yield
  • Relationship between Price and Yield
  • Yield Curves
  • Behaviour of Market Interest Rates
  • Characteristics of Spot and Forward Term Structures
Bond Prices and Yields
  • Introduction to Bond Pricing
  • Present Value Formula
  • Time-Value of Money
  • The Mathematics of Discounting
  • Nominal versus Real Interest Rates
  • Time Basis and Compounding
  • Frequency Conventions
  • Continuous Compounding
The Yield Curve, Bond Yield, and Spot Rates
  • Practical Uses of Redemption Yield and Duration
  • The Concept of Yield
  • Yield Comparisons in the Market
  • Measuring a Bond’s True Return
  • Implied Spot Rates and Market Zero-Coupon Yields
  • Spot Yields and Coupon-Bond Prices
  • Implied Spot Yields and Zero-Coupon Bond Yields
  • Determining Strip Values
  • Strips Market Anomalies
  • Strips Trading Strategy
Duration and Convexity
  • Macaulay Duration
  • Modified Duration
  • Convexity
  • Duration–Convexity Approximations to Bond Price Change

This section is a buildup on the previous section. It focuses on term structure of interest rates, PV01 hedge etc. Modeling of term structure of interest rate is also covered. Interest rate modeling is explained using Short-Rate Processes, Ito’s Lemma, One-Factor Term-Structure Models, Two-Factor Interest Rate Model.

Term Structure of Interest Rates
  • Definition and Properties of the Term Structure
  • Bootstrapping spot rates and forward rates
  • The Pure Expectations Theory
  • The Pure Risk Premium Theory
  • The Market Segmentation Theory
  • The Biased Expectations Theory
Present Value of Basis Point
  • PV01 and Value Duration
  • Approximations to PV01
  • Understanding Interest Rate Risk
Modeling The Term Structure Of Interest Rates
  • Modeling the Yield Curve Dynamics
  • The Binomial Interest-Rate Tree Methodology
  • Continuous-Time Models
  • Arbitrage Models
Interest Rate Modeling
  • Basic Concepts
  • Short-Rate Processes
  • Ito’s Lemma
  • One-Factor Term-Structure Models
  • Two-Factor Interest Rate Model
  • Vasicek Model
  • Hull-White Model
  • Cox-Ingersoll-Ross (CIR) Model
  • Brennan-Schwartz Model
  • Extended Cox-Ingersoll-Ross Model
  • Heath-Jarrow-Morton (HJM) Model
  • The Multifactor HJM Model
Inflation-Indexed Bonds
  • Basic Concepts
  • Choice of Index
  • Indexation Lag
  • Coupon Frequency
  • Type of Indexation
  • Index-Linked Bond Cash Flows and Yields
  • TIPS Cash Flow Calculations
  • TIPS Price and Yield Calculations
  • Assessing Yields on Index-Linked Bonds
  • Which to Hold: Indexed or Conventional Bonds?
  • Analysis of Real Interest Rates
  • Indexation Lags and Inflation Expectations
  • An Inflation Term Structure
Convertible Bonds
  • Characteristics of Convertible Bonds
  • Pricing Models for Convertible Bonds

This section is aimed at explaining the concept of swaps. Concepts of The Key Principles of an Interest Rate Swap Generic Swap Valuation, Zero-Coupon Swap Valuation, Calculating the Forward Rate from Spot-Rate Discount Factors are some of the many concepts covered.

Swaps
  • Interest Rate Swaps
  • Market Terminology
  • Swap Spreads and the Swap Yield Curve
  • Generic Swap Valuation
  • Intuitive Swap Valuation
  • Zero-Coupon Swap Valuation Calculating the Forward Rate from Spot-Rate Discount Factors
  • The Key Principles of an Interest Rate Swap
  • Valuation Using the Final Maturity Discount Factor
  • Non–Plain Vanilla Interest Rate Swaps
  • Swaptions
  • Valuation
  • Interest Rate Swap Applications
  • Corporate and Investor Applications
  • Hedging Bond Instruments Using Interest Rate Swaps
Forward Rate Agreements and Interest Rate Swaps
  • Forward Rate Agreements
  • Interest Rate Swaps
  • Cash Flows on Vanilla Swaps
  • Cross-Currency Swaps

The objective of the section is to explain hedging using fixed income. Hedging Framework is introduced the participant. Also Hedging INR Floating-rate Liability and Hedging USD Floating-rate Liability is explained. Hedging Interest Rate Risk through caps and floors is covered as well.

Hedging through Fixed Income
  • Hedging Bond Instruments Using Interest Rate Swaps
  • Hedging INR Floating-rate Liability
  • Hedging USD Floating-rate Liability
  • Managing Rates and Currency Risk
  • Hedging through Cross Asset products
Hedging Interest Rate Risk
  • Caps
  • Floors

DETAILED CASE STUDY AND EXCEL IMPLEMENTATION

Let us bring our classes to you! Our in-house training are ideal for groups of 10 or more people. We can provide Off-the-shelf training in the form of our classic courses, or we can provide bespoke training, tailored to your organisational goals and objectives. Please contact us for further details.