Introduction to Capital Markets

In: Business and Management

Submitted By Josy1412
Words 3043
Pages 13

What is investment banking?

Investment banks act as intermediaries in capital markets, helping the matching of sellers and buyers of various securities and advising institutional investors, government and companies on their investment strategies, on their financing needs (helping them to raise money) and their acquisitions. Two main areas:

(1) Securities or capital markets divisions: trading in the equity, fixed income ,FX and commodities markets and advising and intermediating for institutional investors in those markets.

(2) Corporate Finance and public finance (often referred to as investment banking) advising corporations and governments on their financing needs, including the underwriting of securities, on their merger and acquisition activities, or on their restructuring.

Securities and capital markets divisions

Clients are usually * Institutional investors, corporates or public entities, not private clients; * Mutual funds asset managers; * Pension Fund asset managers; * The insurance companies; * Private Banks; * Hedge Funds; * The treasury departments of large banks or large companies.

Capital markets divisions * Equity division: equity research, equity sales, equity trading on cash, flow derivatives and structured products * FIRC or FICC (Fixed Income, currencies and derivatives): * Fixed income cash products, interest and credit derivatives, structured products; * FX: all currency transactions, from plain vanilla spot currency trades to sophisticated derivatives; * Commodities.

Investment banking divisions

* M&A (Mergers and acquisitions); * Advising on and underwriting securities issues; * Advising on restructurings.

Clients are usually government/public bodies, corporates (quoted and…...

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