Module                        : FIN 202: Financial Markets and Services

           Programme                 : B.Com

Credit Value              : 12

Prerequisite               : FIN 201: Introduction to Corporate Finance and Financial Management

General Objectives:

·         Understand the basics of Financial Markets

·         Learn about the various modern financial institutions

·         Learn about the basics of workings and procedures of primary and secondary markets

·         Learn about the roles of various financial intermediaries such as merchant banks etc

·         Introduce students to  various investment vehicles such as mutual funds, venture capital etc

·         Understand the importance and working of Central Banks, Commercial banks and Other financial institutions

·         Introduce students to the latest financial services such as Credit cards etc.

·         Understand the roles and functions of various credit rating agencies in the economy

Learning Outcomes:

By the end of the module, students should be able to:

·         Describe the basics of primary and secondary markets.

·         Demonstrate comprehension of the workings of various financial intermediaries such as merchant banks, Mutual Funds, Venture Capital etc.

·         Demonstrate comprehension of modern financial services provided by various financial institutions.

·         Explain the basics functions of Central Banks and Commercial Banks.

·         Describe how healthy financial markets benefit all participants in an economy.

·         Explain why it is important to study money, banking, and financial markets.

CONTENT

Unit-I:  Financial System                                                                                                (6 Hours)

Concept of Financial Assets & Financial Markets, Functions of Financial systems,

Structure of Bhutanese Financial markets, Brief outline of development in Bhutanese Financial System; Money Market: Introduction to basic instruments of money markets, Introduction to Bhutanese Money Markets, Concept of Repo & Reverse Repo

Unit-II: Capital Markets                                                                                               (10 Hours)

Concept, Functions & types of capital markets, Primary Markets: Concept, methods of raising funds through equity (Public & Rights Issue, Private placements);

Secondary Market:   Introduction, evolution and functions of stock exchanges, Introduction to different important players of capital markets, Stock Exchange, Mutual Funds, Merchant & Investment bankers, introduction to commodities and debt market.

Regulatory Framework: Role of market regulators with respect to Public Issues, Listing and stock market trading with special reference to RSEB.

Unit-III: Banking and Insurance                                                                                 (10 Hours)

Central banking System: Introduction, Functions of RMA, credit control via reserve requirements, selective credit control, advances to priority sector, Qualitative Credit Control;  Commercial Banking System: Evolution, important products of commercial banks, Functions of Commercial Banks; Insurance Companies The nature of insurance, risk transfer concepts, introduction to Insurance Pricing, Government Regulation of Insurance.

Unit-IV: Merchant Banking, Mutual Funds, and Venture Capital                          (10 Hours)

Scope of Merchant Banking Services - Merchant bankers and Management of Public Issues –  Concepts of Mutual funds- Mutual Fund Schemes-Open ended & Closed Ended- Money Market mutual Funds-Private sector Mutual funds- Evaluation of the Performance of Mutual Funds; Concept of Venture Capital fund- Characteristics/Features- Venture Capital Schemes- Legal Aspects- Briefly about working of Venture Capital Funding Agencies in Europe, US and in Asia

Unit-V: Debit/Credit Cards                                                                                            (6 Hours)

Concept of Credit Cards- varieties of Cards- Operational Procedures - Utility of Credit Cards from the point of view of Bankers- Utility of credit cards in facilitating business, credit cards in the online transaction scenario.

Debit cards – utilities and benefits of debit cards – management of debit cards by banks.

Unit-VI: Credit Rating                                                                                                    (8 Hours)

Concepts and types of Rating- Mechanism- Criteria for Rating-Advantages of Credit Rating to Companies- Advantages to Investors- disadvantage of Credit rating- Credit Rating Agencies and Ratings.

Teaching Strategies

·         Lectures

·         Case studies

·         Tutorials

·         Presentations and Projects

Assessment

·         Project work and Assignments                  20%

·         Case studies                                               30%

·         End – Semester Exam                                50%

                                                       Total 100%

Essential Texts

1.    Khan, M.Y, Financial System, (Tata McGraw Hill: New Delhi)

References

1.  Fabozzi & Modigliani, Capital markets (Prentice Hall: New Delhi) .

2.  Pandian,P, Security Analysis & Portfolio Management (Vikas: New Delhi)

3.  Shekhar & Shekhar, Banking Theory & Practice (Vikas: New Delhi)

4.  Agashe, A., Capital Markets & Financial services (EPH:Delhi)

5. Financial Services Act

6. Royal Securities Exchange of Bhutan Ltd Regulations for stock market