financial markets n institution, investment banking in pakistan
TRANSCRIPT
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Final project
Financial Markets and institution
on
Investment Banking
Submitted to
Submitted By
Miss Maria Faisal Ammara
hashmi
amna
Shabbir
sara
akhtarsund
as kehakshan
bba v
Date
Feb 1, 2012
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Fatima Jinnah Women University
ContentsFinal project ................................................................................................................. 1
Financial Markets and institution .................................................................................. 1
Contents ...................................................................................................................... 2
Introduction and Evolution .......................................................................... 3
Who needs an Investment Bank? ......................................................................... 4
Compensation for the Investment Bankers: .................................................................. 4
Size of the Industry: ..................................................................................................... 5
Organizational Structure of Investment Bank: .............................................................. 5
Services By Investment Banking..................................................................................7
Financial advisory services: .......................................................................................... 7
Raise capital through the issuance of securities: .......................................................... 8
Initial Public Offerings ................................................................................................. 8
Underwriting Stocks and Bonds: .................................................................................. 8
Syndication: ............................................................................................................... 10
Mergers and Acquisitions:.......................................................................................... 10
TYPES OF INVESTMENTS DONE BY INVESTMENT BANKS.............................................11
Risk involved in investment banking..........................................................................12
Risk Management for Investment Banking.................................................................13
Investment banks in Pakistan.....................................................................................14
References ................................................................................................................. 18
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Introduction and Evolution
An investment bank is the financial institution that assists individuals, corporations and
governments in raising capital by underwriting or acting as the client's agent in the issuance
ofsecurities. An investment bank may also assist companies involved in mergers and acquisitions,
and provide additional services such as trading ofderivatives, fixed income instruments, foreign
exchange, commodities etc. Unlike commercial banks and retail bank, investment banks do not take
deposits and do not make commercial and retail loans.
The history of investment banking dates back to ancient times. The crash of Stock market in 1929
and the Great Depression caused the U.S Government to regulate the financial markets moreclosely to protect the rights of the American investors. So, from 1933 (GlassSteagall Act) until
1999 (GrammLeachBliley Act), the United States maintained a separation between investment
banking and commercial banks and prohibited banks from both accepting the deposits and
underwriting the securities. Other industrialized countries, including European countries, have
historically not maintained such a separation. The Security act of 1933 outlined how the investment
bank would underwrite the securities in the markets. This act also established the practices ofdue
diligence, issuing a preliminary and final prospectus, and pricing and syndicating a new issue.
Investment banking involves two main lines of business. Sell side includes the trading of the
securities for cash or for any other securities, also the promotion of securities through underwriting
etc. whereas the buy side involves the public who consumes the services offered by the sell side to
maximize their returns including the pension funds hedge and mutual funds. Hedge and mutual
funds are not common in Pakistan.
http://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Mergers_and_acquisitionshttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Acthttp://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Acthttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Commercial_bankhttp://www.investopedia.com/terms/d/duediligence.asphttp://www.investopedia.com/terms/d/duediligence.asphttp://www.investopedia.com/terms/d/duediligence.asphttp://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Mergers_and_acquisitionshttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Commercial_bankhttp://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Acthttp://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Acthttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Commercial_bankhttp://www.investopedia.com/terms/d/duediligence.asphttp://www.investopedia.com/terms/d/duediligence.asp -
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An investment bank can also be split into private and public functions, which separates the two to
prevent information from crossing. The private areas of the bank deal with private insider
information that may not be publicly disclosed, while the public areas such as stock analysis deal
with public information.
In Pakistan investment banking started in September 1987 and IGI Investment Bank, Meezan Bank
Ltd, Escorts Investment Bank Limited, are the leading investment banks.
Who needs an Investment Bank?
Any firm that thinks of a large transaction can benefit from the advice of an investment bank.
Although large corporations often have refined finance and corporate development departments and
in seeing the transaction close. But small to medium sized companies do not have a large internally
developed financial department and in financial transaction they may be at a disadvantage as
compared to the large companies. A good investment banking firm can provide the services
required to initiate and execute a major transaction.
Compensation for the Investment Bankers:
An enormous amount of money is paid to the investment bankers based solely on their relationships
with the clients, clever thinking and experience of these professionals. An investment bank has to
do little with the profits it earns except to pay it to the professionals who produce it. Almost 50% or
more of the revenues earned goes to the salaries and bonuses of the investment banks employees.
But the risk with the investment banker is that the bonuses they receive may reduce because of the
poor market conditions or the bad year of the firm.
As long as there is market economy, there are likely to be investment bankers coming up with new
ideas to make money.
http://en.wikipedia.org/wiki/Insider_informationhttp://en.wikipedia.org/wiki/Insider_informationhttp://en.wikipedia.org/wiki/Insider_informationhttp://en.wikipedia.org/wiki/Insider_information -
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Size of the Industry:
Global investment banking revenues increased to a record US $84.3 billion in 2007 that is 22%
more as compared to 2006 and double than it was in 2003. With 53% of the total proportion, the
United States was the primary source of income of investment banking in 2007 whereas Europe
generated almost 32% and Asian countries generated the remaining 15% of the total revenues. Over
the past decade the investment banking income from U.S increased by 80%, 217% in Europe and
250% in Asia. The industry of investment banking is concentrated in major financial centers
including London, New York, Hong Kong and Tokyo.
As investment banking is one of the most global industries so, it faces major challenges due to
continuous development and innovation in global markets. To win more clients, bankers have
constantly been inventing many new products that can provide higher profit margins.
Organizational Structure of Investment Bank:
The primary function of an investment bank is to buy and sell the products on behalf of banks
clients and the bank itself. Investment bank offer services both to the corporation issuing the
securities and the clients buying the securities.
An investment banker provides three basic services to the companies:
Advice and counsel (before and after sale)
Underwriting
Distribution
For a corporation the investment bank most importantly provides the advisory services about
pricing, size and timing of the offering, types of securities etc. Investment bank is divided into
Front Office, Middle Office and the Back Office.
Front Office:
Investment banking is the conventional aspect of the investment banks which involves helping the
clients to raise funds in the capital markets and also in the mergers and acquisitions through its
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advisory group. Investment banking is also termed as corporate finance. Investment banker made
idea pitch and bring it with them in their meeting with the client with the expectation that their
efforts would be rewarded and the client would be ready to make transaction decision. Once the
client would accept the offer, the investment banker would be responsible for preparing everything
related to the execution of the deal which may include subscribing the investor to the security
issuance and coordinating with the bidder etc.
Investment management is the management of the securities (shares and bonds etc) and other
assets (real asset etc) to meet specified investment goals for the benefits of the investors. Investors
may be the institutions like insurance companies, pension funds, corporations etc or private
investors through collective investment schemes like mutual funds. The investment management is
generally divided into Private Wealth Management and Private Client Services.
Financial Markets are divided into four key divisions that are:
Sales and Trading is the most profitable area and responsible of revenue generation for the
investment banks. In this process traders buy and sell financial products with the goal of making
additional money on each trade. Sale force call on the institution and other investors to suggest
trading ideas and to take orders. Sales desk then communicate their clients orders to the relevant
desks to structure new products that fits the investors need. Strategists advise the clients on the
strategies that can be adopted in market. The strategies affect the way firm will operate in the
market.
Research is the division that reviews companies and writes reports about their visions, often with
buy or sell ratings. The research division may or may not generate revenues, its resources are
used to assist traders in trading, the sales force in generating ideas to customers and investment
bankers by covering their clients. It also serves the outsider client so that they may execute the
investment advice given to them through sales and trading division of the bank and hence generate
revenues for the firm. The published analysis can affect the banks profits thus creating conflict of
interest. Therefore the investment banking and research has been separated using the Chinese wall
between public and private functions.
Structuring as the derivatives have been introduced in the market, structuring division has been
introduced. Highly skilled employees work on creating very complex products that offer high
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returns. In 2010, as a result of selling very complex derivatives contracts to the local area of Europe
and U.S, investment banks came under pressure.
Middle Office:
Risk management involves analyzing the markets and credit risk that the traders are taking in
conducting their daily trades as well as setting the maximum amount of capital that can be traded so
that bad trades can be prevented. Middle offices main function is to make sure that economic risk
is seen accurately, correctly and on time. In recent years the Middle Offices provides calculations to
deal with the operational risk.
Corporate treasury provides funds, manage capital structure and monitor the liquidity risk of the
investment bank.
Financial control monitors and analyzes the capital flow of the firm and the principal advisor to
the senior management on the key areas.
Compliance areas are responsible for keeping the check that the daily operations of the investment
bank are in accordance to the rules and regulations defined by the government and internal
regulations. It is also considered as a part of the back office.
Back Office:
Operations involve checking the trade data to ensure that it is correct and the required transfers of
the transaction is taking place. It is a vital part of the bank.
Technology involves the information technology department. Every major investment bank has a
built in technical support by the technical teams that make different software to help working
efficiently.
Services By Investment Banking
Financial advisory services:
Investment banker use industry knowledge, expertise and contacts to advise
senior executives and boards of directors. They guide institutions and firm
about market and market trend. They advise what to invest and when to
invest.
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The Identify and assess strategic opportunities. They evaluate the situation
and give advice according to needs and demand of clients. Interpret market
information and enhance shareholder value. They Provide general valuation
services (e.g., segment analysis, break-up valuations, fairness opinions)
Raise capital through the issuance of securities:
Investment banks help public and private institutions raise capital. Although many investment
banks manage money for institutions and wealthy individuals, they are very different from "banks"
that most people are familiar with. Investment banks do not have retail locations where they accept
deposits and create accounts for the average consumer.
Instead investment banks cater to companies and institutions, mainly by finding them sources of
funding. Their services include arranging equity and debt offerings, providing credit facilities and
"selling" securities to investors. They also advise institutions on a wide range of transactions,
notably mergers and acquisitions. The clients of an investment bank benefit from the bank's access
to investors, expertise in valuing assets and experience in executing transactions.
Larger investment banks, such as Goldman Sachs, have their own sales and tradingoperation which
allows them to generate additional revenue from market making and executing trades. Additionally,
many investment banks provideasset managementandbrokerage services.
Initial Public Offerings
Initial Public Offerings (IPO), is the first time when a company start to sells its stock to the public.
Usually IPOs are associated with very first-day gains; otherwise, when the market is cold, they get
flop. It's mostly difficult for an individual investor to get the huge gains. Mostly, only institutional
investors have access to specific stock at the offering price. General public can also trade the stock,
the very first gains of day will have already been made. Still investors should have information
about IPO market because it is the only opportunity to buy new stocks.
Underwriting Stocks and Bonds:
When company wants to get fund raising or to borrow, it may opt to issue long term debt or equity.
Then it hires an investment bank to provide facility to issue and sale of securities. It will underwrite
http://www.wikinvest.com/wiki/Securitieshttp://www.wikinvest.com/wiki/Securitieshttp://www.wikinvest.com/wiki/Assetshttp://www.wikinvest.com/wiki/Goldman_Sachshttp://www.wikinvest.com/wiki/Goldman_Sachshttp://www.wikinvest.com/wiki/Sales_and_tradinghttp://www.wikinvest.com/wiki/Sales_and_tradinghttp://www.wikinvest.com/wiki/Market_makerhttp://www.wikinvest.com/wiki/Asset_managementhttp://www.wikinvest.com/wiki/Asset_managementhttp://www.wikinvest.com/wiki/Asset_managementhttp://www.wikinvest.com/wiki/Brokeragehttp://www.wikinvest.com/wiki/Securitieshttp://www.wikinvest.com/wiki/Assetshttp://www.wikinvest.com/wiki/Goldman_Sachshttp://www.wikinvest.com/wiki/Sales_and_tradinghttp://www.wikinvest.com/wiki/Market_makerhttp://www.wikinvest.com/wiki/Asset_managementhttp://www.wikinvest.com/wiki/Brokerage -
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the issue. This whole process requires firm to purchase the issue at pre set price and again sell in the
market. Following is the process of underwriting.
Giving Advice: firms dont know the situation of market that which securities to buy, why
and when to buy. They dont know the right time of sell and right time to buy. Firms want to time
the markets to sell stock when when it will obtain the highest possible price. Because of dealing
daily in security market investment bankers should be able advise firms on time. Investment banker
can advice about time and price that on what price they should offer.
Filing Documents: investment banking has to assist the Securities and exchange
commission in filings. Activities operating by investment banking are regulated by SEC. In File,
there is a statement called registration statement. This statement gives information about firms
financial condition, management and all other factors. The firm also has to disclose what the funds
will be used for and management of risk in securities.
Underwriting: when all the paper work is completed, the investment will go through the
process of underwriting of issuance. At the predetermined time and date, issue will sell off the
stock. Now, investment banker should deal out to public price at greater price to earn its own fee.
Public trust the investment banks opinion, investment banker recognize the responsibility they have
to report information accurately, since when they lose investors confidence , they will unable to
deal in market.
Investment bankers are actually dealing with risk. , this risk can be reduced in form of syndication.
It is a group of investment banking firm each of which buys a portion of security issue. Then each
firm is responsible for reselling share of securities in syndication. Mostly securities are issued by
syndicate to spread risk in different way effectively.
Best Efforts: It is an alternative to underwrite offering, it offers the securities under best
offer agreement. In this agreement the investment banker sells the securities on a commission basis
with no guarantee regarding the price the issuing firm will receive. This gives benefit to investment
banker that there is no risk issue of mispricing the security. Investment banker can simply marketthe security at price at which customers asks. And if security fails to sell, the offering can be
cancelled.
Private Placement:private placement, securities are only sold to restricted number of
investors rather than to public. The advantage of this placement is that the security does not need to
be registered with SEC.
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Buyers must large enough to purchase large amount of securities at one time. Their usual buyers are
insurance companies, commercial banks, pension funds and mutual funds. They are common more
for bonds rather than stocks.
Syndication:Due to size of many new securities, it Is often necessary for the originating investment banker to
form an underwriting syndicate, which is a group of investment banking firms. The use of an
underwriting syndicate lessens the risk of loss to any single firm. Each underwriter in the syndicate
must sell its portion of the issue. This is likely to result in a wider distribution of new securities.
The originating underwriter with the assistance of syndicate members puts together a selling group,
which distributes the new issue to investing public.
Fulfilling Legal Requirements: through the securities and exchange commission,the federal government regulates the initial and subsequent trading of securities.
Registration Requirements, issuer must obtain approval of the SEC, the registration statement must
be filed with the sec for at least 20 days before approval is granted.
Prospectus, it details the firms operating and financial position. Red Herring is a statement in
prospectus, printed in red ink, indicating the tentative nature of a security offering while being
reviewed by the SEC.
Trading requirements: there are different regulations for investment. Many countries also have
aimed at regulating the sale of securities within their borders. These blue sky laws protect investors
the sale of securities within the state.
Pricing and distributing the issue: After approval of registration statement,
the issue is publicized, by advertising. When the security is formally placed on market orders are
accepted from selling group. If the issue is sold out it is considered as oversubscribed issue, if not
all shares are sold out immediately, it Is undersubscribed issue.
Mergers and Acquisitions:
Investment banking are also active in mergers and acquisitions. Combination of two companies to
form a one company is called merger. Both companies contribute to new management team.
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Stockholder turn in their stock for stock in new firm. In acquisition, one firm acquires ownership of
other by buying its stocks. They combine their resources.
Investment banker serves acquirers. Acquiring firms require help in locating attractive firms to
pursue, soliciting shareholder to sell their shares in process called tender offer and raise the required
capital to complete transaction.
This kind of job need many skills and expertise. These investment bankers are highly trained
TYPES OF INVESTMENTS DONE BY INVESTMENT
BANKS
Equities
These securities represents ownership in a company. They are traded in stock
markets. They can also be purchased through initial public offering. Equity
investment is a long term investment, and returns on equities are higher than
other investments. The possibility of greater return comes with greater risks.
Mutual funds
Type of investment in which group of people pool their money together, with a
pre determined investment objective. This investment is popular because it is
cost efficient, risk diversified and sound regulation. There are different type of
mutual funds with different risks and return possibilities according to demand.
Bonds
Bonds are fixed income instruments which are issued for the purpose of raisingcapital. Both private entities, such as companies, financial institutions, and the
central or state government and other government institutions use this
instrument as a means of garnering funds. Bonds issued by the Government
carry the lowest level of risk but could deliver fair returns.
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Deposits
Investing in a bank or in post-office deposits is a very regular way of securing
funds. These instruments are at very low risks with low returns.
Cash equivalents
These are relatively safe and highly liquid investment options. Treasury bills
and money market funds are cash equivalents.
Real estate
With the ever-increasing cost of land, real estate has come up as a profitable
investment proposition.
Gold
The metal is a preferred investment option, particularly when markets are
volatile. Today, beyond physical gold, a number of products which derive their
value from the price of gold are available for investment. These include gold
futures and gold exchange traded funds.
Risk involved in investment bankingInvestment banks are consistently faced with variety of risks that have a potentially negative consequence
on their business. Risk management in investment banking has to identify and minimize risks that may
have negative effect on finance and capital of firm. Therefore investment banks must have special
organizational unit for risk management. They define procedures for identification of risk its measurement
and its assessment.
Investment bank is dealing with following risks.
Liquidity risk- is the type of risk, when a bank is unable to fulfill demand of due obligations
causing negative effects on capital of bank and its financial results.
Credit risk - is the risk caused by borrowers default on its obligations to the bank causing
negative effects on financial condition of bank.
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Market risk this risk includes interest rate, foreign exchange risk.
1. Interest rate risk this risk is caused by fluctuation in interest rates.
2. Foreign exchange risk fluctuation in exchange rates cause foreign exchange risk.
This risk is also associated with changes in the market price of securities, commodities traded andfinancial derivatives
Exposure riskswhen a bank is exposed to single entity like when it is exposed to one firm
only or a group dealing with same business
Investment risks - include risks of banks investments in entities that are not entities in the
financial sector and in fixed assets.
Risks relating to the country of origin of the entity to which a bank is exposed -(country risk)
When a bank is unable to gain claims from such a group that is facing economical, political or
social condition causing bad results for banks financial condition.
Operational risk-. It occurs due to omissions in work of investment banker, improper processes
and procedures mismanagement of information and other systems and other external factors.
Legal risk it is the risk of failure due to penalties or sanctions from court orders due to
violation of contractual or legal obligations, and penalties and sanctions pronounced by a
regulatory authority or agencies.
Reputational risk- risk in the loss caused by wrong market positioning of the bank.
Strategic risk - is the risk of loss caused by a lack of a long-term development factor in the
banks managing team.
Risk Management for Investment Banking
There are different methods to manage risk. An investment banker, in order to maximize price,
might recommend to sell the stock during certain periods when interest rates are higher. Investors
may use technique like diversification as a way to reduce their risk exposure.
Investment risks are the risk that are a part of putting your money into financial markets. When we
have to do with some amount of risk, we can manage it in a number of ways. following are
different ways to manage risk in management.
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Diversification
Diversification of your portfolio is the best way to manage the investment risk. Usually investors
invest their all money in same market or company, because it is growing and yielding good profits,
but what if the company gets out of particular business. There is a chance that you will lose your all
portfolio. Therefore, instead of putting whole amount in one company, you should invest in
different so you will have lower risk for overall portfolio.
Asset Allocation
You need to utilize the asset allocation, for your portfolio. This concept deals with division of your
money with different types of assets. For this, you will invest some amount in stock and some
amount in bonds. By this allocation, you will not lose all your amount when stock market is notdoing well. But when you practice this asset allocation, you have to assign specific percentages to
each security. For example 40:60 or 60:40. It depends on requirements.
Research
Research is another way to manage risk. Before putting your money, you should go thorough the
results and procedures of whole process. You should study the whole market to give advice to
customers. By using comprehensive research we can potentially lower the risk.
Investment banks in Pakistan
As compare to other develop countries investment banks in Pakistan is a modern phenomenon
when government of Pakistan permitted the private sector to establish investment finance
companies and investments banks on September 17 1987.
Investment banks in Pakistan play a vital role in the process of capital formation which is essential
for breaking the circle of poverty we are faced with. A conventional investment bank drum up the
saving and make them available in longer term projects for investments. It also provides a number
of supplementary services which include securities underwriting, stock and trading of bond,
facilitating mergers, arranging and funding syndicated loans managing public issues, money and
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capital market activities, corporate financial services, project financing and providing advices to
businesses.
Investment Banks Association of Pakistan:Investment banks association of Pakistan (IBAP) is a newly introduced phenomenon of investment
banking in Pakistan. Along with its partners IBAP is carried out high wave of investment banking
and adding new professionalism and vitality to it.
The IBAP was incorporated on May 14, 1997. The Government of Pakistan registered this
company as Guarantee limited. Its membership is open to all companies dealing with business
investment banking or investment advice in Pakistan.
IBAP acts as a representative of the relationship of its member companies with the Federal andProvincial government, local, municipal and other public authorities, trade associations and the
media. It also helps to promote enactment of legislation and issuance of governmental notifications
beneficial to the investment banking business by legal means.
Investment banks:
Name of Investment Banks Abbreviations
Escort Investment Bank Limited EIB
First Credit and Investment Bank Limited FCIB
First Dawood Investment Bank Limited FDIB
IGI Investment Bank Limited IGIIB
Invest Capital Investment Bank Limited ICIB
Security Investment Bank Limited SIB
Trust Investment Bank Limited TIB
Innovative Investment Bank Limited IIBL
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J.S. Investment Limited JSIB
In Pakistan the leading investment banks include IGI investment bank, Meezan investment bank
limited and escorts investment bank limited, among other.
IGI investment bank:
In Pakistan IGI investment banks is one of the leading bank and in 1990 the part of the IGI
Financial Services Group was founded. It is licensed to carry out leasing activities and investment
financing under the securities and exchange commission of Pakistan. IGI investment banks has
awarded long term credit rating of A and short term credit rating of A1 by The Pakistan Credit
Rating Agency (PACRA). This rating ensures a strong capacity of risk absorption. The services
offered by IGI investment bank includes cash and treasury management, commercial financing,
corporate financing and leasing and mutual funds advisory.
Meezan Bank Ltd (MBL)
The investment banking department of Meezan Bank limited (MBL) proposed distinctively
structured transactions based on various Islamic modes of Islamic finance for its customer. The
mode of Islamic financing includes ljarah, Istisna and Diminishing Musharakah. According to
Islamic Finance News of RED money group, Malaysia, Meezan bank has been awarded Best
Islamic Bank in Pakistan for 2010 by CFA Association of Pakistan. JCR-VIS maintained the bank
long term to medium rating at AA- (double A minus) with stable outlook and upgraded short term
rating from A-1 (A-One) to A-1+ (A-One Plus) on June 1, 2011.
Escort investment bank (EIBL)
Escort Investment bank was founded in 1996, and become one of the most progressive investment
banks in Pakistan in term of services and products offered return on equity and assets size.
According to JCR-VIS Credit rating company limited the entity rating of EBIL has revised to
A-/A-1 (Single A Minus/A-One) from A/A-1(Single A/A-One)
Efficiency test Model:
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There are nine points that have been used to test the performance of listed investment Banks in
Pakistan.
1. Market Share
2. Par value
3. Paid up Capital
4. Historical Growth
5. Turnover
6. Share in GDP of Pakistan
7. Distribution as return
8. Market Price Compare to Par Value
In Pakistan the corporate sectors has lasting needs for services such as investment advisory,
distressed assets acquisition and disposal, equity and debt financing and corporate restructuring.
With the growing of financial markets and economy the need for these services will more
strengthens this will increase the prospects for the investment banks in these areas. In these areas or
fronts the commercial banks will not be able to compete with investment banks because of lack of
expertise and specialization in these areas. So the investment banks will have to change their
current strategy of emulate commercial banks they should put their efforts on developing
competitive advantage in specialized areas of advisory services and corporate finance. Once they
development these competencies they can control it by forming strategic alliance with commercial
banks which lack these capabilities but investment banks also have a edge in the form of wider
outreach and ability to mobilize nationals savings with greater efficiency. This strategy will not
only provided well paid growth to the investment banks but will also add additional value to the
society.
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References
http://www.fcibank.com.pk/
http://www.igiinvestmentbank.com.pk/
http://www.pakistanbanks.org/links.html
http://financelearners.blogspot.com/2011/05/investment-banks-in-pakistan.html
http://thismatter.com/money/stocks/investment-banking.htm
http://en.wikipedia.org/wiki/Investment_banking
http://www.fcibank.com.pk/http://www.igiinvestmentbank.com.pk/http://www.pakistanbanks.org/links.htmlhttp://financelearners.blogspot.com/2011/05/investment-banks-in-pakistan.htmlhttp://thismatter.com/money/stocks/investment-banking.htmhttp://www.fcibank.com.pk/http://www.igiinvestmentbank.com.pk/http://www.pakistanbanks.org/links.htmlhttp://financelearners.blogspot.com/2011/05/investment-banks-in-pakistan.htmlhttp://thismatter.com/money/stocks/investment-banking.htm