Capital Market Analyst

By: EconomyWatch   Date: 23 November 2010

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The Capital Market Analyst is required to have extensive knowledge of finances , risk management products and financial markets . The capital market analyst should have strong analytical and presentation skill. He should also be capable of negotiating.

The following is the list of functions by the capital market analyst:

  • The capital market analyst is supposed to assist his clients in the different capital market transactions and financing structures.
  • The capital market analyst is also responsible for assessing the structures and the financial products.
  • The capital market analyst analyzes financing and the financial risk management proposals.
  • The capital market analyst negotiates the finance related agreements.
  • The capital market analyst manages the bank relationship.
  • The capital market analyst analyzes the financial risk management products which includes the derivatives and thereby keeps the financial market under close watch.
  • The capital market analyst assists in projects and prepares presentations.
  • The capital market analyst should be skilled in collecting and documenting the business requirements.
  • The capital market analyst should be skilled in creating process and data flow maps and diagrams.

The capital market analyst should possess knowledge in the following areas of the global capital market :

  • Trading
  • Settlements
  • Custody
  • Compliance
  • Risk
  • OTC derivatives
  • Finance
  • Prime Brokerage

The role of the capital market analyst is also to develop capital market reports and recommendations on particular kinds of stocks. They study the company informations and based on them they formulate financial models . Such models are used to forecast the future trends . On the basis of such trend the capital market analyst decide on whether the specified stock should be bought or sold. The recommendations of the capital market analysts differ across the different firms. The analyst sometimes is caught between the employing company and the company whose stock they are studying.

The capital market analyst is also responsible for issuing the earnings estimates for companies. The earnings estimate is basically the estimate of the earnings per share . The earnings estimate has gained prominence in Wall Street. The companies that overshoot their estimates experience rising stock prices whereas in the reverse case the stock prices are seen to be taking a downturn.

The reports and the earnings estimates have conflicting objectives. The analysts are instructed by the companies to keep their earnings estimate lower than the figure that the company actually desires to report. Hence in most times overshoot their expectations which signals the less knowledgeable investors to buy. These are known as the earnings whispers . The earnings whispers are created using a number of methods.

For more details on the capital market analyst the websites worth viewing are investorguide.com, eurograd.org, capitalmarket.com etc.


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