Rhodes University Masters (Financial Markets)
Financial Markets
MASTERS DEGREE IN FINANCIAL MARKETS BY COURSEWORK AND DISSERTATION
This degree is aimed specifically at a specialised career in the financial/banking sector. A minimum registration of 5 students is normally required for the degree to be offered.
The normal requirement for admission is an Honours degree or a four-year degree, preferably with a strong background in Economics and/or Management. Professional experience will also be taken into account.
The courses are structured with the above career in mind and are all compulsory. The degree consists of:
CODE, COURSE, SEMESTER OFFERED
ECO 501, Dissertation, 1 & 2
ECO 507, Financial Institutions, Regulation and Monetary Policy, 1
ECO 508, Quantitative techniques in Financial Markets, 1
ECO 504, Debt & Foreign Exchange Markets, 1
ECO 505, Equity & Derivative Markets, 2
ECO 506, Portfolio Theory & Management , 2
COURSE CONTENTS
ECO 502 – Financial Institutions and Regulation
* The theories underlying the role of financial system,
* Institutions and their regulation – financial system and institutions
* Asymmetric information and uncertainty
* Principal-agent theory
* Adverse selection and moral hazard
* Financial intermediaries and portfolio choice
* Financial sector and macroeconomic performance
* Institutional aspects of financial sector development
* Regulation and supervision of financial intermediaries and markets
* Main regulators (South African Reserve Bank and Financial Services Board)
* Arguments for and against
* Evolution
* Regulators’ vital function in terms of financial stability and guarding against systemic and other risks faced by financial intermediaries
ECO 503 – Money, Banking and Monetary Policy
* The core theories underlying monetary policy formulation
* Analysis and implementation – central banking and monetary policy (goals, tool, targets, conflicts
* Independence and time consistency of policy)
* Monetary aggregation
* Empirical models of money demand and money supply
* Theory of interest rate and application
* Monetary transmission mechanism and international monetary system
* The practice of monetary policy formulation and implementation drawing extensively on the experiences of South Africa and other developed and emerging market economies
* Private sector banking
* Operation and management of banks- balance sheet and off-balance sheet activities
* Risk in banking; banking specialisations
* New developments in banking such as securitisation, structured finance
* Diversification of banking, financial consolidation and financial engineering
* International financial architecture
ECO 504 – Debt and Foreign Exchange Markets
* Financial econometrics: the application of statistical and econometric methods in financial market research, including multivariate regression models, ARCH and GARCH models, models of asset prices and volatility models
* Mathematics of the financial markets
* Economics of the money market, its instruments, its functions and developments
* Role of interest rates and monetary policy role of central bank via the two interbank markets
* Risk-free rate and the relationship between money market rates and other interest rates
* Microstructure of money market
* International aspects
* Bond market, its instruments, developments, importance and international aspects
* Economics of bond market
* Theory of pricing
* Term structure theories
* Emergence of the corporate sector in the bond market
* Role of the Bond Exchange of South Africa
* Microstructure of bond market
* Foreign exchange market
* Exchange rate theory and determinants
* Exchange rate systems
* Exchange rate policy in South Africa
* Participants, including importers, exporters, speculators, foreign sector
* Microstructure of forex market
* Derivatives – hedging tools, such as forex and currency swaps, forwards, futures
ECO 505 – Equity and Derivative Markets
* Equity market
* Primary and secondary markets
* Role of the regulator and the JSE as manager of the market
* Participants, mechanics of the market
* Microstructure of equity market
* Theories of valuation of shares
* Efficiency of equity market
* Behaviour of prices
* International aspects of the market
* Financial derivatives market – forwards, futures, options, swaps, hybrids such as swaptions, “other” such as weather and credit derivatives
* Valuation of derivatives
* Role of the exchange (Safex) and the regulator
* Use of markets – investors, hedgers, speculators, arbitrageurs; microstructure of derivative markets.
ECO 506 – Portfolio Theory and Management
* Macroeconomic analysis as it applies to the financial markets
* Asset class analysis and strategic asset allocation as the first level of analysis
* Sector / industry analysis and security analysis
* Aspects of security analysis: financial statement analysis and ratio analysis
* Behavioural finance
* Concepts, terminology and definitions in portfolio management
* Theory
* Modern approaches to portfolio management including resample efficiency
* Types of portfolio managers
* Asset classes
* Types of financial portfolios
* Life staging
* Portfolio monitoring including performance and risk attribution, statutory environment of the portfolio manager in South Africa.
EXAMS REQUIRED BY THE FINANCIAL EXCHANGES
The Financial Services Board (the regulator of financial exchanges) requires of financial exchanges in South Africa certain minimum education standards for traders and advisors. A number of the courses required by them have been included in the above-mentioned modules. Candidates who successfully complete the exchange courses will be recognised by the exchanges as traders and advisors, and by the Financial Services Board as portfolio managers. Successful candidates will receive certificates issued by the South African Institute of Financial Markets (SAIFM) and the JSE and their names will be entered into the registers maintained by the SAIFM and the JSE.
For more detailed information see the SAIFM’s web-site:www.saifm.co.za
The SAIFM is a body set up by the financial exchanges and it administers most of the exams required by the financial exchanges. The JSE administers the other exams. The following exchanges and/or divisions require the following modules to be successfully completed.
In order to become a stockbroker, ie a member of the South African Institute of Stockbrokers (SAIS) (ie to start a stockbroking firm), the SAIS exams have to be completed. The entry level for the SAIS exams is:
* CFA (Chartered Financial Analyst)
* CA (SA)
* Honours degree in investments
* RPE exams plus other exams (compliance officer, settlement officer, etc)(Rhodes has applied to have the Masters in Financial Markets accredited in this regard)
For more detailed information see the SAIS web-site:www.sais.co.za