6. The Financial System – at a glance Personal Corporate Government Savings = Investment Money & Capital Markets Intermediation Personal Corporates Government Savings = Investment Corporates Government Banks Brokers Insurance/Re-Insurance
23. Financial Institutions Financial Institutions are intermediaries that channel the savings/deposits/investments of individuals, businesses and governments to productive use. Financial Markets Made up generally of: · Money Markets - short-term funding Markets · Capital Markets - long-term funding Markets Money & Capital Markets
24. MAJOR FINANCIAL INSTITUTIONS IN NIGERIA - Banks -Insurance Companies -Discount Houses -Pension Funds Administrators -Fund Custodians -Stockbrokerage Houses -Mortgage Finance Companies Money & Capital Markets
25. INTERMEDIATION ROLES OF FINANCIAL INSTITUTIONS IN THE FINANCIAL MARKETS Money & Capital Markets Banks - Accept demand, savings and time deposits, and make loans directly to borrowers or through the financial markets . - Act as issuing houses for companies raising funds in the capital market . - Act as underwriters for new issues in the capital market
26. Insurance Companies Receive premium payments from insured parties. Premiums received are invested for capital preservation and growth. Discount Houses Their main role is to make two-way market for Government securities. Act as underwriters for all government securities not sold in the market. Pension Funds Administrators Set up so that employees of various companies and governments agencies can make contributions and receive income after retirement. Accumulated Funds are usually invested via the financial markets. Mortgage Finance Companies Similar to banks (take deposits and book loans) except they do not operate current accounts. They lend funds primarily to individuals and businesses for real estate mortgage loans. Funds are also invested in financial and real estates Markets. Money & Capital Markets
27. Stock Broking Firms They buy and sell securities on a recognized Exchange on behalf of their clients. Investment Trust Companies Their business is investing in the stocks and bonds of other companies and the government. Unit Trust Companies Pool funds from savers through sale of shares, and bonds issued by various businesses and governments. Create a diversified and professionally managed portfolio of securities to achieve a specified investment objective, such as capital preservation, liquidity with a high return. Venture Capital Companies They specialize in raising funds for new business ventures. Money & Capital Markets
38. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Features of Financial Assets & Liabilities
101. Attributes of Some Popular Stock Market Indices Not Included value-weighted 33 stocks trading on Hong Kong Stock Exchange Hang Seng Not Included price-weighted 225 stocks trading on Tokyo Stock Exchange NIKKEI 225 Not Included value-weighted 40 stocks trading on Premier Marche CAC 40 Included value-weighted 30 stocks trading on Frankfurt Stock Exchange DAX Not Included value-weighted 100 stocks trading on LSE FTSE 100 Not Included value-weighted 100 stocks trading on major markets of Europe Eurotop 50 Not Included price-weighted 30 stocks trading on NYSE & NASDAQ DJIA Not Included value-weighted 500 stocks trading on NYSE, AMEX & NASDAQ S&P 500 Dividend Weighting Components
113. INVESTORS IN CSCS & TRANSACTION FLOW VIA CERTIFICATES VIA THE SECONDARY MARKET WSP Deposit certificates with NSE licensed Stockbrokers Broker forwards relevant information (electronically) to CSCS CSCS issue CHN and Investor account to investors Stockbroker sends Certificate Deposit Form, original certificate to company registrar for verification Complete relevant KYC forms & Transfer forms: as transferor If signature okay, registrar sends verified item to CSCS for lodgment If signature or documentation error, registrar sends unverified item to stockbroker for reprocessing Complete relevant KYC forms, CSCS Shareholder Particulars Form (R005) & Transfer forms: as transferee Broker forwards relevant information (electronically) to CSCS CSCS issues CHN* and Investor account to investors *One CSCS CHN serves for multiple accounts with stockbrokers Stockbroker executes BUY mandate using Investor account number into CSCS Depository Stock settles on T+3 Days into CSCS Stockbroker forwards completed Transfer Form( Transferee) to Registrar CSCS Client info Broker info Securities info Broker “A”
114. NSE-CSCS Trading Connectivity Identity Verification Broker “A” CSCS Processor Server Brokers Record Clients Record NSE Trading Engine Broker “B” Broker “C” Broker “D” Broker “E” Brokers Record Clients Record Clients Record Securities Record Securities Record
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116. Netting of CSCS Trades Mechanism Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Dr /Cr Broker “H” NIBSS Settlement Bank “Z” Broker “F” Broker “D” Broker “B” Broker “A” Settlement Bank “Y” Settlement Bank “X” Broker “C” Broker “G” Broker “E”
186. TECHNICAL ANALYSIS S/N PRICE FIELD FIELD DESCRIPTION 1. LCLOSE This the previous day closing price of the security. OPEN This represents the first trade done at the open of the market. The consensus price agreed upon by two or more traders as orders begin to be matched. 2. HIGH The highest price for which brokers traded the security during a trading session. The maximum price should not exceed 5 per cent of the previous day closing price . This is also the highest price at which any buyer was willing to buy during the trading session (resistance beyond this point). 3. LOW The lowest point at which brokers traded the security during the session. The lowest price should not be less than 5 per cent below previous day closing price . This also represented the lowest point sellers were willing to consummate trades with buyers in the market. 4. CLOSE The last price at which buyer(s) and seller(s) consummated a trade just before the close of the trading session. This is the price often reported to the investing public by the media!
187. TECHNICAL ANALYSIS S/N PRICE FIELD FIELD DESCRIPTION 5. CHANGE The difference between the previous day closing price and today closing price. This change should be within the band of –5.0% and +5.0% of the previous day closing price. 6. DEALS/TRADES This is the number of deals carried out between buyers and sellers during the trading session. Note that deals are counted on the basis of trading between clients’ accounts and not on broker basis – a broker can be a buyer and seller simultaneously using different accounts (case of cross deals). 7. VOLUME This is the total number of security (shares) traded during the trading session. 8. VALUE This is the value of trade carried out on a security during the trading session. Always difficult to determine on the face of the price report.
212. It is all about determining the future price of securities today .
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Notes de l'éditeur
Value of recording data in a consistent / standard format – losses, audit, KRI’s, external events – concentrations Once set up standard categorisation, it is important to then define what you mean, with examples, so that you get a consistent interpretation. Important if rolling out program across many branches / business groups
53 51 Discussing the US requirements here, but most jurisdictions follow this approach to a greater or lesser extent
