Investment Banking as a Career

September 22, 2013

Arif Khan M.Com MBA FCMA CFA

Commissioner, Bangladesh SEC

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?

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

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

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

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

Understanding the business

Industry overview and competitive positioning

Financial statement analysis

identifying investment risks

finding out the value, not the price!

Equity Research-Basics

Analysis of potential mergers or acquisition

Organizing leverage buy-out deals

Corporate restructuring

Divestitures

Enterprise valuation

Corporate Advisory

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

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

• “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

THANK YOUTHANK YOU