GROUP MEMBERSSIDRA ALEEMAILIA BATOOL

GHAZI REHMAN ZAID HASSAN

INVESTMENT BANKfinancial institution that assists or helps

corporations and governments to raise capital by underwriting and acting as the agent in the issuance of securities.

assists companies involved in mergers and acquisitions and derivatives

Investment banks do not take deposits.

Investment Banking Division Industry coverage groups: focus on a specific industry such as

Healthcare or Technology, and maintain relationships with corporations within the industry to bring in business for a bank.

Product coverage groups: focus on financial products, such as Mergers

& Acquisitions, Financial Sponsors, and Leveraged Finance.

SECURITIES UNDERWRITINGPrivate placement securities issue placed with one of a few

large institutional investors

Public placement may be underwritten on a best efforts or firm

commitment basis and offered to the public. 

Cash Management

Securities firms and investment banks offer bank deposit-like cash management accounts (CMAs) to individual investors

Services offered by investment banks V/S Securities FirmsInvestment BanksService entities who wish to raise funds

through sales of debt and equity securities, including corporations or governments; services include

Originating, underwriting, and placing securities in money and capital markets

The wholesale side of the business

Securities FirmsServices involve assistance in the trading of

securities in the secondary markets (brokerage services or market making)

Purchase, sale, and brokerage of securities The retail side of the business

ORGANIZATIONAL STRUCTURES

MAIN ACTIVITIESInvestment banks offer services to both

corporations issuing securities and investors buying securities.

Investment bankers offer information on when and how to place their securities in the market for corporations.

It offers protection against unsafe securities for investors.

FRONT OFFICE Sales and trading

Large investment bank's primary function is buying and selling products.

  Market making

In this trader will buy and sell financial products to get incremental amount of money on each trade.

Involves the creation of a secondary market in an asset by a securities firm or investment bank

FRONT OFFICE Research

This is the division which reviews companies and write reports about their prospects, often with “buy” or “sell” ratings.

Investment management

Professional management of various securities (shares, bonds, etc.) and other assets (e.g., real estate), to meet specified investment goals for the benefit of investors is investment management.

Merchant banking

It is a private equity activity of investment banks

Middle office1) Risk management

It analyzes the market and credit risk that traders are taking onto the balance sheet in conducting daily trades.

2) Corporate treasury

It is responsible for an investment bank’s capital structure management, funding and liquidity risk monitoring.

3) Financial control

It tracks and analyzes the capital flows of the firm.

Back office1)Operations

involves data-checking trades that have been conducted.

2) Technology

investment bank has considerable amounts of in-house software, created by the technology team, who are also responsible for technical support.

Technology has changed considerably in the last few years as more sales and trading desks are using electronic trading.

Investment banks in Pakistan

There are 35 banks listed on Karachi Stock Exchange (KSE), with a total paid-up capital of Rs. 10462.39 million.

Out of these 16 are investments banks with a paid-up capital of Rs. 3730.842 million,

13 are commercial banks having Rs. 6218.92 million as paid-up capital,

and the remaining 6 banks are engaged in the securities business with a paid-up capital of Rs. 512.628 million.

Investment banks in Pakistan

Under SECP investment banks are classified as Non-Banking Financial Companies (NBFCs) and are regulated by the NBFC (Establishment and Regulation) Rules of 2003 which provide an enhanced framework of operations for investment banks and have considerably widened their scope of business.

Investment banks

Atlas Investment Bank Limited Asset Investment Bank Limited Al-Towfeeq Investment Bank Limited Crescent Investment Bank Limited Escorts Investment Bank Limited Fidelity Investment Bank LimitedFirst International Investment Bank Limited, KarachiFranklin Investment Bank LimitedIslamic Investment Bank, Peshawar