Investment banking as a career september 22, 2013 (du)
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Transcript of Investment banking as a career september 22, 2013 (du)
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Investment Banking as a Career
September 22, 2013
Arif Khan M.Com MBA FCMA CFA
Commissioner, Bangladesh SEC
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Three functions:
Investment banking (Merchant Banking in Bangladesh context-mostly corporate finance deals) Research and trading -mostly equity research and trading Advisory services for mergers and acquisition and enterprise valuation
What an Investment Banker Typically Does?
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Corporate finance deals with raising money for firms to maximize shareholders wealth. Common areas are:
Initial Public Offerings (IPO)
Debt offerings, private placement and public offerings
Equity, private placement & right offer or repeat public offer
Corporate Finance Activities
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Understanding the whole process of issuance of shares and corporate debt
Underwriter provides advice for issuer, distribution of securities, sharing of risks of issue and stabilization of aftermarket
Underwriter also “certifies” the issue by putting its reputation behind the issue
Huge Role of Investment Banker as Underwriter
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Advise issuers about their choices
Agreement among underwriters, designates manager, fees
Cooling off period- distribute prospectus
Organizing road show for prospective investors
The Underwriting Process- Prefiling Period
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Filing with Bangladesh SEC
Decide on offering price, electronic book running
Price discovery for IPO
Opening the issue for public subscription
The Underwriting Process- Second Phase
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Understanding the business
Industry overview and competitive positioning
Financial statement analysis
identifying investment risks
finding out the value, not the price!
Equity Research-Basics
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Analysis of potential mergers or acquisition
Organizing leverage buy-out deals
Corporate restructuring
Divestitures
Enterprise valuation
Corporate Advisory
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Positive attitude in problem solving
who are comfortable with numbers
who likes to work with people
almost all jobs in i-banking are people oriented
What Type of People Do Well in i-Banking
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Basic knowledge in economics A broad understanding of business understanding the operation of financial market A strong understanding of accounting, and financial statement analysis capability Backgrounds in corporate finance and investment Marketing skills, enthusiasm and people skill Good written and oral communication skill
What You Need to Make it in i-Banking
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• “The only place where success comes before work is in a dictionary”
“ If I am interested in a company, I’ll buy 100 shares of all its competitors to get their annual report”
“We should pay to Have This Job”
“ Find out your area of interest and think and work with it passionately for 24 hours”
Final Note-Continuous Learning and Hard Work
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THANK YOUTHANK YOU