Course Outline Introduction to Finance.

Course outline
Money, Banking & Financial Institution
Program & Course

Days & Time Sunday 12 00 – 15 00

Location

Quarters Fall Starts June 20, 2010---Ends Octoberr 11, 2007

Instructor Mrs Shagufta Kashif
Office Faculty 6, Basement
Telephone O42-5722670 Ext 2253
O300-401-3446 0321- 8430296
E mail shagufta.kashif@bimcs.ed Alternate e- shugufta_rashid@hotmail.c
u.pk mail om
Consulting hours by
appointments

Teaching Ms. Maryam Afzal Contact shall be communicated

Assistants
Ms Nadia Ahmed. Contact shall be communicated
Required Text Financial Markets and Institutions
By Anthony Saunders and Maricia Millon Cornett 2nd edition

Recommended  Money and Capital Market by Peter S. Rose Fifth Edition,

Additional  Financial Markets and Institutions, And Money by Fredric S. Mishkin
Readings, Books  Principles Of Money, Banking & Financial Markets By Lawrence S. Ritter,
and Other William L. Sliber and Gregory F. Udell, 10th or later Edition,
Material  Any other book on Money, Banking and Institution; State Bank of
Pakistan’s Publications

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 Course Outline Introduction to Finance.

Financial Press  Dawn, Business Section Economic and Business Review); Business
Recorder; Pakistan Economist etc.
 WSJ, FT or any other local & International newspaper or Journals; Various
publications of State Bank Of Pakistan
Course Pack Shall be made available through photocopier
Material
Students Laser 50 Pages
Printing Quota
Pre requisites of Principles of Finance 1, ACF 261/ECON 261: Intermediate Finance. Micro
the Course and Macro Economics

Methodology Primarily Lecture method based on assigned readings. Class discussions

on assigned topics. Various reports and; current developments.
Services of outside specialist speakers shall be arranged

Course Objectives The course is designed to equip students with knowledge of a financial system and its
Expected regulatory framework and environments in Pakistan, and as it exists in a developed
outcome & Policy economy. On completion of the course the students shall be able to demonstrate an
understanding of the subject matter and financial environments in Pakistan.
The course policy envisages positive learning environments in the class. A productive
participation conditional on attendance shall be rewarded judicially. Tardiness and casual
attitude shall be strongly discouraged. Zero tolerance for plagiarism and other unfair means
of securing credits.

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Course Evaluation and Rewards

Quizzes 25 %
There shall be total of 7 quizzes from the assigned and the last reading, Best 5 will be
counted.
No Makeup quizzes shall be allowed whatsoever. repeat whatsoever
Attendance and Class Participation 15 %
 Each absence in sessions 5 to 20 shall loose 1 mark for each day. Failing to actively participate
intelligently shall cost 5 marks. (To get full 15 marks a student should at least attend 15 (From 5-20)
sessions and participate in at least 5)
 An overall absence of 15 minutes or more, in a session shall be deemed as an absence for the
full session.
 The course is intended to be highly interactive. All the students are expected to participate in
the class discussions. In order to ensure a positive learning climate, only intelligent and
contributory observation and discussions shall be fully rewarded.
A Report & Presentation 20%
(A group project from a group size of 4-5 persons, depending on the size of the class).
 A report on comprehensive and critical analysis of a selected institution or a topic shall be
prepared and presented by each group. The groups shall be finalized in the second session. The
outline of the report shall be presented by 5th session for approval. The report must be
submitted by 12th session. The report shall not exceed 15 pages 1½ space 12 Times New
Roman excluding title index and bibliography etc.

(Each group shall select a Financial Institution or a topic of interest for the detailed analysis. Group members shall be
asked to remain abreast with the developments taking place in the marketplace, through financial press. The impact of
current developments taking place, which are pertinent to their selection of study, shall be monitored and compiled by
the group. The group is expected to apprise the class with their observations through class participation)
Article presentation 10%
A 10 minutes Article Presentation by a group of two, on one of the topics given or
suggested by the short group and approved by the instructor. The presentation should be
made in a regular session.
Final Comprehensive Examination 30%

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The examination could be mix of MCQ short exercise and short explanations. Students may
also expect a question or two from the assigned report or a case or a situation analysis.

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 Course Outline Introduction to Finance.

Outline and Daily Agenda On the side Agenda

(Article Presentations)
Week 1, Day 1, Tuesday, August 28,
Part I

Introduction Invitation to form groups. Some of

Introduction to Money banking Course- a course overview; Why Study Financial the topics to be assigned.
Markets and Institution; Overview of Financial System;

Week 1, Day 2, Thursday August 30, 2007

Financial Markets Names of group’s
members, group
Financial Markets; Financial Institutions; Globalization Of Financial Institutions and
coordinator, and the
markets. An overview of Financial Institutions in Pakistan
institution is selected is
Week 2, Day 3, Tuesday, September, 04, 2007 submitted.
Determination of Interest Rates; and Security Valuation
Interest rate fundamentals; Loanable funds theories; Movement of interest rates over
time; Determinants of interest rates; Term structure of interest rates; forecasting
interest rates. Impact of interest rates on bonds prices. ; The concept of Value
and Duration

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Week 2, Day 4, Thursday, September, 06, 2007 Regulatory Framework Scope of

Financial Markets
Introduction and
The Central Banking (Federal Reserve System), Monetary Derivative Markets in Pakistan
Overview of
Policy, and Interest Rates Need and scope of FSA of England
Monetary Type Institutions; Role of a Central Bank; Money supply & interest rates; like authority in Pakistan
Monetary policy tools; Other issues related to Monetary policy; Central Banking in
Pakistan; Monetary Policy in Pakistan
Chapter 1, 2 , 3, 4 ,5
&6

Week 3, Day 5 , Tuesday, September, 11, 2007 Week 2, Day 4 , Thursday,

Part II

September, 12, 2007 Bonds Market in Pakistan; Islamic

Money Markets & Capital Markets (Fixed Income Securities) Bonds (Sakuks)
An overview of Money and Capital Market and Instruments; FIS and MBS
Money Market and Bond market in Pakistan.

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Chapter 7’ 8, 9 & 10Securities Week 3, Day 6 , Thursday, September, 13, 2007

Markets
Capital Markets (Stock Markets) & Other Financial Markets A brief study of Stock Market in
Stock Markets & Other Markets (Foreign Exchange Markets & Derivative Securities Pakistan; Inefficiencies in Stock
Markets) Market
An Overview of the stock markets around the world and in Pakistan. Some issues
pertaining to Stock Market in Pakistan. An Overview of Forex market and Interest
rates,. International quotations conventions; Foreign exchange rates and
transactions. An overview of Derivative securities and markets; Forwards futures;
Options; Swaps and Caps floor and collars etc.

Outline and Daily Agenda On the side Agenda

(Article Presentations)
Week 4, Day 7, Tuesday , September, 18, 2007 Islamic Banking in Pakistan
Depository InstitutionsPart III:

Commercial Banks Saving Institutions

Definition of a Commercial Bank; Balance sheet and recent trends; Commercial Cooperative banking experience in
Banking as a sector of Financial service Industry; Structure and composition of Pakistan
Industry;
Week 4, Day 8, Thursday, September , 20, 2007 Analytical framework of
Commercial Banks (Continues) Statement Analysis of financial
Technology in commercial Banking; Regulations; Global issues. sectors in Pakistan
Commercial Banking in Pakistan SMEDA and Microfinance.
Week 5, Day 9, Tuesday, September 25, 2007
Grameen Bank Of Bangladesh vs.
Thrift Institutions
Khushhali Bank. of Pakistan
An Overview Of Thrift Institutions; Saving Banks And Saving Association; Credit
Unions. Directorate of National Savings in Pakistan. Postal banks or saving
Derivative Markets in Pakistan
Institutions.
Presentation on Securitization In
Week 5, Day 10 , Thursday, September 27, 2007 Pakistan
Financial Statement Analysis of Banking Industry
Depository Institutions' Financial Statement Analysis , Financial statements of a
commercial bank; Return on Equity and its components

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Chapter 11,12 and 13 Week 6, Day 11, Tuesday, October 2 , 2007 Recent Developments and Role of
Regulation of depository institutions. Investment Banking in Pakistan.
Regulatory environments of commercial banks in USA and i Pakistan; Pakistan
banking council and scope of Pakistan banking association. Some Important Pension Funds and Employees
Regulations Welfare Fund

SECP regulation on Insurance

Islamic Insurance (Takuful)
Risk Management in Pakistan

Leasing Scenario in Pakistan.

.Presentation on Modarabas;
Chapter 14, 15, 16 17&18Other Financial InstitutionsPart IV:

Week 6, Day 12, Thursday, October 4, 2007

Islamic Modes of Financing
Insurance Companies
The categories of insurance companies;, A brief overview of the non banking
financial Sectors; Securities Firms and Investment Banks; Investment Bankers
Association of Pakistan
Week 7, Day 13, Tuesday , October 9, 2007
Other Non Banking Financial Institutions
Development Financial Institutions, Role of DFI,s in Pakistan; Finance Companies;
Mutual Funds; Pension Funds; ; Mutual Funds association of Pakistan
Week 7, Day 14, Thursday,, October 11, 2007
Other Non Banking Financial Institutions (Continues)
Study of Modarabas; Islamic Banking in Pakistan; Leasing Association of Pakistan

Outline and Daily Agenda

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Week 8, Day 15, Tuesday,, October 16, 2007 Presentation Group 1, 2 & 3
Presentations
Week 8, Day 16, Thursday, October 18, 2007 Presentation Group 4, 5 & 6
Group

Week 9, Day 15, Tuesday, October 23, 2007 Presentation Group 7, 8 & 9

Week 9, Day 16 , Thursday, October 25, 2007 Presentation Group 10, 11& 12

Week 9, Day 17, Tuesday, October 30, 2007

Risk Management in

Types of Risks Incurred by Financial Institutions Managing Risk on the Balance Sheet I: Credit
Risk
Why Financial Institutions need to manage a risk; A brief discussion on different types of risks.
Chapter overview; Credit analysis; Lending to Small and Medium size business.
Week 9, Day 18, Thursday, November 1, 2007
Managing Risk on the Balance Sheet II & III : Interest Rate and Insolvency Risk
Liquidity risk as it exists in different Institution; Interest rate risk measurement and management; Repricing and duration
models.
Insolvency risk Managements
Week 10, Day 19 Tuesday, November, 6, 2007
Managing Risk with Derivative Securities.
Risk Managements with Forward and Futures contracts; Option feature and its use as a risk management tools; Swaps;
interest rate swaps, currency swaps and credit swaps;

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Institutions Week 10 Day 20 Thursday, November 8, 2007

Securitization.
Managing Risk through Securitization.
Loan sales and securitization; Securitization of other assets; Securitization in Pakistan
Financial
Chapter 20 & 21, 22 & 23
, 24, and 25.

FINAL EXAMINATION

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Some Of the topics

Swift and other Basel Accords I & 2 Risk Management Islamic Banking in Insurance industry in
payment systems Compliance in Process, and Risk Pakistan Pakistan;
Pakistan Management in
Pakistan
Syndication in Regulatory agencies Rating in Pakistan International rating of IMF conditionalities.
Pakistan in Pakistan (PACRA & JCR-VIS) Pakistani Banking and its impact on
Sector Pakistan financial
System.
Securitization in Islamic Insurance, Trends in commercial Consolidation and Privatization of
Pakistan ( Takuful) Banking mergers in Banking Banking sector
Sectors in Pakistan
Shape of Emerging Islamic Bonds, Central Depository Trend in -use of modern Trends in Lending
Financial System Sakuks Scope of a other technology in Pakistan policies in Banking
Custodian Banking Industry
Fixed Income Role and Scope of Micro credit in Impact of oil prices on Ability of Pakistan
Securities Market in SMEADA Pakistan, banking industry Banking to absorb the
Pakistan SME Banking Successes and possible exogenous
Failures shocks
Grameen vs.
Khushhali Bank
Associations of non Need for Financial Money Laundering Postal Saving and Mutual Funds Industry
Banking Financial Service Authority in And Hawala System insurance in Japan in Pakistan
sector Pakistan like FSA of
UK
CFS, Badla and Foreign Exchange Any other topics Yield curve of Pakistan Forensic Report on
Margin Financing Market in Pakistan proposed by a debt market Stock Market /
students and Efficiencies and
approved by the Inefficiencies in capital
instructor Markets of Pakistan
Insiders trading Rules Housing Finance by The State and scope Merger Wave in Pension Funds and
and Role SBP and HBFC and Commercial of Consumer Banking Industry and Employees Welfare
SECP in controlling it Banks in Pakistan, Financing in Pakistan its future course Funds in Pakistan
Scope of REITS

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Derivative Markets in Presentation on

Pakistan Securitization
In Pakistan

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