Equity Capital Markets

Introduction

London's importance as a centre for global equity trading is illustrated by the 418 foreign companies listed on the London Stock Exchange at the end of 2018. This interactive programme offers practical insight into today's equity capital markets from multiple participant viewpoints — investment banks, institutional investors, private equity houses and corporates. Coverage spans both primary new issuance processes and secondary trading & investing activity.

Learning Objectives

• What drives a corporate's decision on where to list?
• What does it cost to list on exchange, and how is this broken down?
• Why would a corporate use depositary receipts, and how do they work?
• Understanding who is populating the IPO pipeline — the unicorn club

Key Business Benefits

• How the investment bank syndicates organise and price the new issuance process
• What institutional investors are looking for with newly listed businesses
• The importance of exchange traded funds in the secondary markets
• Investing or trading? The rise of high-frequency trading and dark pools
• An understanding that valuing a business is driven by what it does, not where it lists
• Real appreciation of the advantages and limitations of modelling in Excel
• Understanding where to look in the absence of earnings or dividends

Skills Acquired

• Understanding the difference between order-driven and quote-driven price discovery
• Understanding how a new issue is priced in a tender offer
• Understanding how the mechanics of the Greenshoe option work
• Understanding the margin calculations behind short selling

Course Content (4 sessions, 6 hours total)

• Session 1: Structuring a new equity listing — the primary markets — public vs private offerings; pros/cons of going public; syndication; underwriting; the Greenshoe option; pricing methodology; Lead Manager / Bookrunner roles; costs; investor attraction; cornerstone investors case study
• Session 2: Cross-border listings — the case for cross-border listings; catalysts (valuation, liquidity, cost, reputation); dominant exchanges; depositary receipts; London's International Order Book; Shanghai–London Stock Connect; emerging vs frontier markets case study
• Session 3: Private equity in equity capital markets — IPO pipeline population; venture capital through buyout funds; PE fund structures, fees and hurdle rates; M&A involvement; public-to-private leveraged buyouts; private-to-public exits; unicorn club membership
• Session 4: Life as a listed entity — secondary equity markets — corporate actions; dark pool crossing networks; high-frequency trading; share turnover velocities case study; order- vs quote-driven trading; short selling; hedge funds' impact; wrap-up quiz