Investment Analysis And Portfolio Management

RIPHAH INTERNATIONAL UNIVERSITY FACULTY OF MANAGEMENT SCIENCES (FMS) AL MIZAN CAMPUS --------------------------------------------------------------------------------------------------Subject: Investment Analysis and Portfolio Management Course Code: ……… Credit Hours: 3 Cr Hrs Contact Hours: 3 Hours per week for 16 weeks = 48 Hours Faculty Name: Najam Us Sahar …….. [email protected] ---------------------------------------------------------------------------------------------------

1.1 Introduction to the Course This course provides students with the quantitative and qualitative skills necessary for the construction, revision and evaluation of financial portfolios. Students will first be introduced to the portfolio formation and asset allocation process. After revisiting the mathematics of portfolio construction and diversification, students will develop an understanding of equity portfolio management strategies and portfolio performance evaluation. The aim of this module is also to introduce you with analysis of Islamic investment including the traditional and modern approaches to analysis of some investments. You will be introduced to analysis of Islamic investment in general, but also Islamic Financial institution, instruments and types of investments. The focus will be on the difference between conventional and Islamic Investments, evaluation models and asset management of Islamic investments, and various methods of investment analysis and processes to make decision and choose an optimal project. You will also be familiarized with technical, technological, economic and financial analysis of Islamic investments. The emphasis will on investing in derivative Islamic instruments and Islamic bonds (Sukuk). You will also understand the processes of Islamic Investment projects, valuation and funding, and scope of AOIFI regulation

1.2 Learning Objectives      

To understand why Return & risk are the critical components of all investment decisions To identify the importance & mechanism of money market and capital market securities for investment decisions To distinguish between the direct & indirect investment opportunities To understand how the securities are traded? To recognize the modern portfolio theory To understand the valuation of securities for investment analysis purpose MARKS ALLOCATIONS a. Midterm Exam (After 8th week) b. Final Exam (After 16th week) c. Quiz Marks d. Class Participation e. Assignment f. Final Project Total

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20% 40% 10% 10% 10% 10% 100%

Recommended Books:

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Investment; Analysis & Management By Charles P. Johns Mc-Graw Hill, Inc., USA Essentials of Investment By Bodie, Kane Marcus Mc-Graw Hill, Inc., USA Security Analysis & Portfolio Management, Donald E. Fischer & Ronald J. Jordan Pearson Education Inc., USA

Investment; Analysis & Portfolio Management (IAPM) Week 01

Topics/Contents to be covered Understanding Investments & Investment Alternatives  Why investment decisions are important?  Investment Decision Process  Individual Investors Vs. Institutional Investors  Financial Markets  Fundamental analysis  Money Market Securities  Fixed Income Securities  Equity Securities

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Objectives Why investment decisions are important? To Introduce Markets and securities

Suggested Readings

Chapter 1,2 & 3 + Supplementary Reading Material

   02 - 03

04 - 05

06 - 07

08

Derivative Securities Mutual Fund Investment Direct & Indirect Investment

Investment Risk & Returns  Components of Return  Sources & Types of Risks  Measuring Risk  Realizing Risk & Returns from Investing  Managing & Diversifying the Risk

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To understand the relationship of risk and return How to measure risk and returns How to diversify in context of risk and resturn

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Investment Valuations & Analysis  Passive & Active Strategies  Fundamental & Technical Analysis  Equity Securities Valuation & Analysis  Fixed Income Securities Valuation & Analysis  Sector & Industry Analysis  Economy & Market Analysis  Efficient Market Hypothesis  Economic Value Added Portfolio Investments  Why Portfolios?  Types of Portfolio  Portfolio Risk & Return  Analyzing Portfolio Risk  Multi Securities Portfolios  Selection of Portfolio  How to build up an efficient Portfolio?  Portfolio Theories

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.Can explain the passive and active strategies Can perform Fundamental and technical analysis Can value and analyse investments

Understand the importance of Portfolios Can Classify, Nalyse and Build efficient Portfolios Can describe relevant theories

Chapter 6

Chapter 10 - 18

Investments;Analysis & Management By Charles P. JonesLatest Edition Chapter 7,8,9 & 21

09 - 10

11 – 12

13

14

15 16

Stock Market Investments  Importance of Financial Markets  Primary & Secondary markets  Equity, Debt & Derivative Markets  Stock Market Indexes  Mechanism of Trading  Investment & Brokerage Houses  How Orders work?  Margin & Short Selling  Investors Protection  Demutualization of Stock Exchanges Mutual Fund Investments  Fundamental concepts  Benefits of Investing in Mutual Funds  Role of Fund Managers  Open End & Closed End Mutual Funds  Money Market Funds  Fixed Income Funds  Balanced Funds  Equity Funds  Islamic Funds  Fund of Funds  Pension Funds Evaluation of Investment Performance  Risk-adjusted performance measures  Monitoring Performance  Performance Attribution  Problems with Portfolio Performance

Investment Perspective in Pakistan  Investment Regulators in Pakistan  General overview of Rules & Regulations for Local & Foreign Investment in Pakistan  Investment in Capital Markets of Pakistan  Investment in Mutual Fund Markets of Pakistan  Establishment of Investment Management Companies in Pakistan

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Can understand the Importance of Financial Markets  Can Explain the mechanics of Primary & Secondary markets, Equity, Debt & Derivative Markets, Stock Market Indexes and investments  Can apply the relevant knowledge  Can Explain Investors Protection Demutualization of Stock Exchanges 

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Investments; Analysis & Management By Charles P. Jones Latest Edition Chapter 4 & 5

Student can explain the importance, classification and application of mutual funds in investment context

Investments; Analysis & Management By Charles P. Jones Latest Edition Chapter 1 & 2

Student can explain Why to evaluate performance? Can apply the monitoring measures of performance. Can understand the related issues

Investments; Analysis & Management By Charles P. Jones Latest Edition Chapter 22 Supplementary Reading Material

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Students must be up to date about Pakistani context of Investments

Project Presentations Investment in Islam

.Halal and Haram .portfolios with options of Sukuks and Shariah Compliance .AAOFI framework