Associate Banking Diploma — Option Subject Investment
Objective To enable candidates: - To acquire sound knowledge of savings and investment opportunities available to the general public; - To identify customers’ problems and needs. Note: you are advised to study The Monetary and Financial System before sitting this paper.
SYLLABUS
1. Cash and Interest bearing Investments
	1.1	Cash and direct interest-bearing investments, National Savings investments, National Savings Bank accounts; the savings media of the banks and building societies. Other short-term savings media.
	1.2	Fixed-rate, floating/variable rate, zero-coupon, index-linked and convertible securities. Marketable government and other fixed interest securities traded on the Dar es Salaam Stock Exchange. The redemption of securities.
	1.3	The National Savings Stock Register.
2. Public Company Securities
	2.1	Loan capital, preference shares, ordinary shares, convertibles and warrants. Share options for directors and employees.
	2.2	Cash, script and foreign income dividends.
	2.3	Capitalisation and rights issues, vendor placings, etc.
	2.4	The capital market and new issues.
3. Other Kinds of Investment
	3.1	Indirect investments: unit trusts, investment trusts, unit-linked life assurance. Guaranteed income and growth bonds. Personal equity plans (PEPs). Guaranteed performance bonds. Life assurance: various types. Friendly society invest-ments. Annuities. Pensions: state, occupational and personal pension plans; AVCs.
	3.2	Real investments: property, chattels, gold, etc. Indirect investment in property and other real investments.
	3.3	Owner-occupation and the various types of mortgage available.
	3.4	Overseas investments: the markets; advantages and disadvantages. Offshore investment.
4. Dar es Salaam Stock Exchange - Procedures and Settlement
	4.1	Dar es Salaam Stock Exchange organisation and procedure. Functions of members. Dealing, contracts and settlement.
	4.2	Registered and bearer securities. Securities in ‘good marking names’ and depositary receipts. Certificates, dividend warrants and other documentation. Methods of transfer. Nominees.
	4.3	Methods of obtaining Dar es Salaam Stock Exchange quotation. Market requirements: Alternative Securities Market.
5. Investment Theory and Analysis
	5.1	Risk and return- systematic and specific risk. Liquidity, flexibility, stability, timing.
	5.2	Fundamental analysis. Cover, yields; price/earnings ratios; priority percentages. Cash flow; liquidity; gearing. Management and other factors.
	5.3	Technical analysis; charts; filters; etc. Efficient market hypothesis. Index funds.
6. Practical Investment Considerations
	6.1	Rights of shareholders. Meetings and resolutions. Disclosure of interests. Auditors.
	6.2	Assessment of take-over bids, tender offers, etc. City Code on Take-overs and Mergers. Compulsory acquisition of minority share-holdings.
	6.3	Taxation: a sound basic knowledge of the principles of: income tax and National Insurance contributions; capital gains tax; corporation tax; and inheritance tax - as they apply to investors.
	6.4	Portfolio planning, management and review, selection of investments. Sector spread and diversification.
	6.5	Sources of information including SEDOL - the Stock Exchange Daily Official List. Investment advice and professional management services. Indices and performance measurement. Yields and the reverse yield gap. Anomaly and policy switching.
THE EXAMINATION Time Allowed: Three hours. 15 minutes reading time is allowed before the start of the examination. Examination Format: The paper is divided into three sections. Section A (20 marks) contains compulsory questions. Sections B and C (80 marks) consist of four practical 20 - mark questions of which two questions from each section are to be attempted.
	RECOMMENDED READING 1. R G Winfield, Investment: Personal Course for Bankers (Northwick Publishers). 2. R G Winfield & S J Curry, Success in Investment (John Murray). 3. J Cowdell, Investment - Bankers Workbook (CIB/Sheffield Hallam University). 4. B J Beecham, Investment - Revision Card Pack (CIB/Bankers Books).