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Equity Research and Investment Banking Recommendations

Posted on by Imarticus Learning

Equity research and investment banking are crucial in helping investors make informed decisions. Equity research provides insightful analysis and recommendations on stocks, while investment banking provides consultation services for capital raising and mergers and acquisitions. 

This blog will explore the importance of equities research and investment banking and help prospective finance employees gain a thorough understanding of these areas.

Understanding Equity Research

Equity research focuses on fundamental factors such as financial performance, industry trends, and competitive landscape. Here are a few key aspects of equity research:

  • Fundamental Analysis: Equity research analysts thoroughly analyse a company’s financial statements evaluating the company’s general health, profitability, and financial performance. They assess important measures, including profit margins, return on equity, and sales growth. This helps them understand the company’s financial stability. Analysts also consider the management team, the company’s position in the industry, and the marketplace it operates in. 
  • Valuation Techniques: Analysts employ various valuation techniques to estimate a stock’s fair value. They also perform discounted cash flow (DCF) analysis estimating the present value of a company’s future cash flows. It considers factors like growth and discount rates. 
  • Sector Research: Analysts conduct in-depth research on industry trends, regulatory changes, and macroeconomic factors that impact a company’s performance. They analyse market dynamics, competitive forces, and emerging trends within the sector. This helps them understand the opportunities and challenges a company may face and stay updated on industry developments and macroeconomic indicators.

The Role of Investment Banking

Investment banking is essential to the financial ecosystem, bridging the gap between businesses and capital markets. Investment bankers execute transactions and offer strategic advice to businesses, governments, and other organisations. Here are some key areas where investment bankers excel:

  • Capital Raising: Investment bankers play a crucial role in assisting companies with raising capital. They advise on the optimal capital structure, helping determine the appropriate debt and equity financing mix. Investment banks connect businesses with potential investors through private placements or public offerings. They guide the offering’s pricing, timing, and structuring, ensuring the company’s capital-raising objectives are met while maximising investor interest.
  • Mergers and Acquisitions (M&A): Investment bankers facilitate Mergers and Acquisitions transactions. They assist clients in identifying suitable acquisition or merger targets, conducting valuation analyses, and negotiating deal terms. Investment banks provide strategic advice on deal structuring to maximise synergies and shareholder value. They also conduct due diligence to assess the financial and legal aspects of the target company, helping mitigate risks associated with the transaction.
  • IPOs and Secondary Offerings: Investment banks manage taking a company public through an initial public offering (IPO). They guide companies through the regulatory requirements, ensure compliance, and coordinate with underwriters and legal advisors. Investment banks also handle secondary offerings, assisting companies in issuing additional shares to raise capital or enable existing shareholders to sell their holdings. They help determine the offering price, optimise timing, and execute the transaction, ensuring favourable terms for their clients.

Benefits of Equity Research and Investment Banking Recommendations

Equity research and investment banking recommendations offer several advantages to investors:

  • Informed Investment Decisions: Equity research and investment banking recommendations provide investors with a comprehensive and detailed analysis of stocks and investment opportunities. Thorough research, including fundamental analysis and valuation techniques, helps investors gain valuable insights into a company’s financial health, growth prospects, and intrinsic value. A clearer understanding of the rewards and dangers of particular investments supports these choices. It could involve purchasing, promoting, or keeping stocks.
  • Risk Management: Equity research is vital in identifying and assessing potential risks associated with specific stocks or sectors. Detailed analysis of financial statements, industry trends, and the competitive landscape helps identify company performance risk factors. This information facilitates informed decision-making and effective management of their portfolios. For instance, investors can diversify their holdings, adjust exposure to specific sectors, or implement risk mitigation strategies. 
  • Access to Expertise: Investors get access to industry experts possessing deep knowledge and experience in evaluating investment opportunities. These professionals thoroughly know the markets, sectors, and economic variables affecting investment choices. They can provide specialised guidance, unique insights, and access to information that may not be easily available to individual investors. 

Challenges and Limitations

While equity research and investment banking recommendations provide valuable guidance, there are a few challenges and limitations to consider:

  • Bias and Conflicts of Interest: Analysts may face conflicts of interest or bias due to pressure from investment banking divisions, leading to potential inaccuracies in their recommendations.
  • Market Volatility: Rapid market changes and unexpected events can make it challenging for equity research analysts and investment bankers to predict stock performance accurately.
  • Regulatory Compliance: Both equity research and investment banking are subject to strict regulatory guidelines to maintain transparency and protect investor interests.

Conclusion

Equity research and investment banking recommendations are essential tools for investors looking to navigate the complex world of finance. Investors must rigorously assess advice, considering any potential biases and constraints. 

Enrol in the Certified Investment Banking Operations Professional course by Imarticus Learning to establish yourself better in equity research and investment banking. The investment banking course offers guidance from industry experts with industry-recognised certification to boost your CV. A certification in investment banking can help you a lot if you are looking for a career in investment banking or a career in banking.

Emerging Trends in Trade Life Cycle

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In recent years, the trade cycle has witnessed significant changes driven by emerging trends and evolving regulatory requirements. These developments have posed strong challenges to traditional technology, promoting the need for a more robust and flexible trade life cycle. 

Investment Banking Course

Trading technology, although not a new trend, is not a new trend, has a rich history that has profoundly impacted modern financial markets, surpassing legacy systems in terms of innovation and advancement. 

In this article, let’s learn in detail about the emerging trends of the trade life cycle and its history. 

What is a Trade Life Cycle? 

Trade life cycle refers to sequential events occurring through various trade procedures in financial markets. 

In a capital market, every trade goes through a life cycle. The trade life cycle starts with placing or buying or selling orders to execute the ends before the trade is even settled. It includes steps like trade initiation, trade documentation, trade execution, trade finance and payment, trade settlement, and trade post-settlement. The trade life cycle can vary in terms of complexity and duration, depending on the financial markets. 

In India, the T+2 settlement cycle is followed in the stock markets. It includes the time frame between the trade execution date (T) and the actual settlement date (T+2). 

Link Between ODH and Trade Life Cycle 

An ODH or Operational Data Hub is used to manage trade life cycles related data. It is an enterprise architecture pattern that helps to unify data from existing systems and breaks down various data silos to provide a single source of data authority. An ODH is capable of offering data authority to the entire organisation. 

There are many ways ODH is related to the trade life cycle. They are: 

  • When an ODH is connected with a trade life cycle, it typically becomes a trade data hub. 
  • Its robust architecture makes operational efficiency easier and makes a better way of data harmonisation, lineage and integration.
  • ODH has a faster and more accurate way of reconciling and reconstructing trade events. 
  • ODH incorporates advanced data analytics and predictive technology, which drives opportunities for effective sales, risk management and trading. 

Emerging Trends in Trade Life Cycle 

In the modern-day trade life cycle, there are meticulous steps to embrace emerging trends in the trade life cycle. Let’s see what they are. 

Risk and resilience

Enhanced risk management has emerged as a trend in the trade life cycle. Businesses now recognise the importance of comprehensive risk assessment and mitigation strategies to ensure the success of each transaction. Elements such as

This trend encompasses customary Know Your Customer (KYC) checks, where businesses can invest in thorough due diligence processes to build trust. It also includes an in-depth comprehension of geographical risks allowing businesses to develop tailored strategies and contingency plans. Businesses can withstand future shocks if they expand, diversify, and enhance their network of third parties, including suppliers, goods forwarders, transport logistics businesses, and technology providers.

Transparency

Another emerging trend in the trade life cycle is the focus on enhancing resource efficiency. It helps businesses in increasing visibility in supply chains and industry in general. 

By promoting transparency, businesses can easily build links between surplus materials and by-products in one supply chain that might be a precious resource in another supply chain, reducing waste. Companies that can automate and streamline their processes, and use platforms and technology to do so, will win, whether they are well-established players in the market or newcomers.

Data-driven Analysis

Nearly every industry has seen an increase in competition due to business globalisation. To stay competitive, leaders and management teams must embrace a data-driven approach and harness its strategic potential to achieve desired outcomes. 

Furthermore, efficiency and digitisation will also be important elements in the industry’s transformation. Firms can use data analytics and other technology advancements to transition from a crisis-driven, reactive approach to a more deliberate, proactive strategy.

Conclusion 

As today’s firms are reacting to various data challenges, there are always new regulations that are coming up to facilitate the overall trade life cycle. Even though these new regulations add various complexities and transparency that might not be cost-efficient, in the long run, it is going to help in making the trade life cycle much easier. 

If you want to learn about the trade life cycle and other components of the global economic market, check Imarticus Learning’s Certified Investment Banking Operations Professional course or CIBOP course. You only need to be a finance graduate to take up this course. After completing this course, you will have a basic idea of trade and its life cycle and understand crucial aspects of each of the stages. 

 For more details, check out the website right away. 

Learning investment banking has never been this easy

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Dreaming about securing a permanent position in the investment banking industry and achieving that goal can be pretty tricky. Since investment banking is a growing sector in finance and business, it is one of the most demanded career paths among students. The promising expansion in investing, selling and trading play a major role in the growth of investment banking. The year 2021 saw a massive upheaval in the Indian investment banking sector and deal-making businesses as there was unexpected flooding of IPOs and stock share sales.

The overall hike was more than three times that of 2020 when investment bankers made only 776.7 crores whereas they scored a whopping 2.000 crores in 2021. It is statistically possible that investment banking in India will grow by 8.5% in 2022. So learn investment banking in the easiest way ever to celebrate your dream and become more aware and skilled in finance.

Technical Skills Required to Become an Investment Banker

There are certain hard skills that an investment banker needs to hone before joining the industry. It is unavoidable to squeeze in the little space left for new bankers without highlighting essential skills on your resume. Investment banking courses that groom students to acquire these skills are the best. Here is a list of some technical skills that will make your investment banking career easier: 

Basic Excel

Learning a few basics of Excel like Pivot Table, Data Validation, Look-Up functions, and Macros proves handy when you are aspiring to become a banker. Skills like analyzing clients’ financial data, creating monetary models for them, and forecasting are must-haves in this field.

Python

One of the most suitable programming languages for banking is Python. Learning how to use this simple programming language might come in handy when you are planning to go ahead with investment banking. Python is used to handle tasks like security analysis, risk and trade management, asset management, automated trading, etc. 

JAVA

One of the core skills that an investment banking candidate must possess is knowledge and control of Java. Java is the most used programming language for banking tasks as this helps build software programmes that contain humongous volumes of data. Also, this programming language comes with a tight and powerful security management feature that aids in investment banking tasks. Credit, fundamental, or macro funds typically need Java to operate.

C++

C and C++ are two of the most pivotal skills one can acquire to step further above on the ladder of success in the investment banking sector. C++ is mostly used to handle low-latency applications related to automated trading or market making. Bankers deal with C++ when they have to process quantitative-driven funds, quantitative finance and analytics. C and C++ are popular because of their reusability and speed.

C#

C# is essential in building GUI (Graphical User Interface) for the client company. It also plays a major role in creating mobile apps and websites. For investment bankers, C-Sharp is thus a useful language to enhance their skills for brilliant job opportunities.

Ruby

An efficient candidate for an investment banking position would be expected to have a firm knowledge of Ruby. Ruby is a high-level programming language that is mostly used in financial sectors for making payment systems like e-wallets and payment gateways, and monetary dashboards. Also, it covers significant tasks like asset management and Big Data. 

Power BI

An important data analysis tool is Power BI by Microsoft. Any type of banking, including investment banking, would require this tool for creating data visualisation. So thorough control over this tool would be an effective skill to have as an investment banker. 

Soft Skills Required to Become an Investment Banker

It gets easier if a candidate works on gaining personal skills related to this field while also pursuing related technical skills. Below are the few soft skills that help an investment banker stay rooted in the industry in the long run:

Analytical and Problem-Solving Skills

Analytical and problem-solving skills can save a candidate from getting rejected in mass competition. Data analysis, data visualisation, research, and critical thinking are all part of analytical and problem-solving skills. These soft skills distinguish an amateur from a professional.

Project and Time Management

As an investment banker, one needs to work with investors and client companies to manage the projects given to them. It is crucial to have a balanced perception of how to settle the project within a limited time.

Mathematical Skills

Finance is zero without numbers. So it is compulsory to own a strong calculative mind when dealing with investments.

Conclusion

There are multiple online and offline investment banking courses with placement assistance. But choosing the right can be difficult. Have a firm grasp of the technical and personal skills to become a successful investment banker with the Certified Investment Banking Operations Professional programme.

This course will enlighten you with in-depth knowledge of various product lines, and a better understanding of trade life cycles. Land a precious job at the leading banks with this programme’s efficient placement services and prepare yourself better through mock interviews and resume enhancement.

Historic Returns: Money market instruments and functions

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Historic Returns: Money market instruments and functions

The money market is the set of wholesale markets where the exchange of short-term financial assets, up to 18 months, takes place; with a very low level of risk, largely thanks to the solvency of their issuers and high liquidity. This type of financial market includes the interbank market, the Treasury bills, and notes market, the certificates of deposit market, the bills of the exchange market, and, in general, the market for all short-term financial assets.

What determines the money market?

The main objective of the money market is to provide users and economic agents with the possibility of holding part of their wealth in the form of securities or bonds, with a high degree of liquidity and an acceptable return. The main economic agents participating in the money market, both offering and demanding short-term funds, tend to be mainly banks, savings banks, and public administrations.

Non-bank financial institutions, such as life insurance companies, also frequently use the money market as an outlet for surplus cash, although they usually invest their cash holdings in long-term securities.

Characteristics of the money market

The money market is characterized above all by the following features:

  • The participants in the money market tend to be specialized and well-resourced financial institutions.
  • The assets traded have a very low level of risk thanks to the solvency of the organizations. There is a high level of security.
  • They are highly liquid because they have a very short maturity. Investors will have liquidity at the moment they need it.
  • Transactions can be carried out directly or through specialized intermediaries.
  • They are very flexible: the money market investor has the flexibility to invest in a large portfolio of securities and securities, which will result in a diversification of risk even if the options for return diminish.

A distinction must be made between the primary and secondary markets. The primary market is where new securities, commercial paper, are issued and can be issued. The secondary market is where securities that have already been issued are traded. This implies that the purchasers of the securities buy them from the owners and not from the issuers. 

Types of money markets

There are several types of money markets, as detailed below:

  • Corporate asset market: corporate bonds stand out, where debt instruments are issued by a company on a short-term basis and have a payment obligation. It is a way of financing businesses and the guarantee of payment is the company itself.
  • Interbank money markets: in this market financial firms conduct credit and lending operations through short-term derivatives, interbank deposits, short-term interest rate swaps, and other financial assets, with a maturity period of either one day or one week.
  • Government debt money market: this market deals with government debt. Normally after notification of the calendar, the Treasury issues a series of auctions each year.

When to use it?

Money market investments should be made when you have the liquidity to invest, but you will need it soon and without being able to take excessive risk. This is when the money market is used because of its high liquidity and safety. In this way, the money is not tied up in the bank, but the investor knows that he can access it at any time and that it is safe because of the guarantees offered by the issuers.

Generally, money market assets can fulfill three roles in portfolios: 

  • to support planned (and even unplanned) expenses
  • to act as a buffer against unexpected liquidity events
  • to lessen the negative impact of future negative corrections in financial markets and to have an amount available to take advantage of future investment opportunities.

How do learn more about this?

The Certified Investment Banking Operations Professional of Imarticus equips you with the skills and knowledge necessary to enhance your career in investment banking. Realize your potential and enter the world of finance on the right foot.

Let’s Take a Look at Entry-Level Careers in Financial Markets

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Introduction

Finance is one such domain that will never lose its relevance. It can exist as a core or a subsidiary function in different organisations. This has given rise to several types of jobs in the financial markets. If you want to make a career in finance, you will have to be well-versed with how the industry works and the terms associated with the industry. We offer several courses for investment banking that will help you create a trajectory in finance. 

Career Options in Financial Markets

When it comes to careers in financial markets, there are several options. You need to pick one based on your area of interest, expertise and educational background. You can go for a generic role like a finance analyst or a specific function like a mergers and acquisitions analyst. Let’s check out some roles that you can take up after doing a course on financial markets:

  • Investment Banking Analyst

This is one of the most coveted occupations in the financial sector, where a professional evaluates and researches investment prospects with giant corporations, venture capital firms, and government agencies. The analyst is the entry-level position at an investment bank, venture capital firm, or hedge fund. Industry research, financial analysis of firms, and financial deal paperwork are among the responsibilities of an investment banking analyst.

  • Credit Analyst

Credit analysts examine an individual’s or a company’s credit and financial data and history to assess the risk of lending money or extending credit to them. They fill out loan applications or examine financial data like income growth to determine a loan’s prospective profitability and repayment possibility. Credit analysts work for various industries, including banks and credit card companies, as well as mortgage, insurance, and investment corporations.

  • Entry Level Financial Advisor

An entry-level financial advisor helps a client’s financial goals. They evaluate a client’s present financial situation and describe the options and risks available to achieve their objectives. They also consider events that alter their clients’ financial circumstances, such as marriage or retirement.

  • Financial Analyst

A financial analyst examines current and historical financial data for a company. They collaborate with businesses to highlight investment decisions that boost profits. Analysts make investment portfolio recommendations to firms and discover trends that influence their suggestions.

  • Junior Tax Associate

Tax preparation services, for example, are constantly in high demand. Individuals can begin their professional careers as junior tax associates/accountants with professional banking courses. Companies that require a specialist to calculate taxes, analyse internal fiscal systems, create tax-related paperwork, and work on financial research for the company can hire them. This job description may appear mundane at first, but an individual can advance to positions such as accounting manager, budget director, or chief financial officer with time and expertise.

  • Risk Specialists

Risk specialists work for various organisations, including investment banks and corporations, mortgage and insurance companies, and corporate lenders. Risk analysts utilise both quantitative and qualitative methods to assess the risk of:

  • Existing and anticipated investments 
  • Earning potential
  • The success of businesses

Risk specialists must have a solid capacity to spot possible issues and strong inductive, deductive, and quantitative reasoning abilities. To work as a risk specialist, you’ll typically require a bachelor’s degree in finance, math, or economics, as well as an MBA. A degree or emphasis in international business is incredibly beneficial for risk professionals.

Conclusion

At Imarticus, we provide the best CIBOP courses. You can enrol yourself in any of these courses to make a successful career in the financial markets industry. You can go for a 

Certified Investment Banking Operations Professional course if you are keen on getting into the financial services market. The course will act as your all-in-one go-to guide for everything you might want to know about financial markets.

5 Ways How Technology Is Changing Financial Modelling and Forecasting

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5 Ways How Technology Is Changing Financial Modelling and Forecasting

For many decades, financial system modeling was based on the same traditional business models with very little innovation and integration. Later, the experts started to realize that when technology is combined with finance, it can make the financial market more efficient and highly accurate. Indeed, this has started to change the world of finance opening doors to versatility and quicker computations.

It has proven to be a revolutionary step for the companies as well. With our CIBOP program offered by Imarticus, you can have the opportunity to learn more about the money market and understand the impact of evolving technology on financial systems. 

  • Increased Efficiency

Technologies such as big data, the cloud, and robotics are contributing to greater agility and efficiency of the financial function, since their application reduces the time dedicated to traditional processes, increasing productivity. It also cuts the time spent on reporting, allowing a greater focus on analysis, decision-making, and risk management, creating value for the organization, as well as representing a change in the company and having an impact on people.

  • Fraud Detection

Since money is involved in financial markets at a global level, this sector is prone to fraud and cyberattacks. Frauds or fraudulent activities can have adverse effects on businesses. Thankfully, with Artificial Narrow Intelligence (ANI), it is now possible to detect data patterns and prevent fraud. Any abnormal behavior in online transactions can be precisely detected by modern Artificial Intelligence and Machine Learning techniques, which can help save loads of money on debugging the problem in other traditional ways instead.  

  • Sound Decision Making 

Modern Artificial Intelligence algorithms can help in modeling risk management scenarios, thus making sure that rational decisions are taken most of the time. Finance requires a very delicate task of sound judgment, which surely cannot be left unnoticed and ignored. Even a single bad decision might result in losing millions of dollars on the money market. But thanks to advancements in Artificial Intelligence and Machine Learning algorithms, proper decision-making is ensured, leaving the system more reliable than ever before. 

  • Blockchain Transaction Enhancement

With the beginning of the era of blockchain technology, advancements in financial modelling have taken a big leap. When coupled with an Artificial Intelligence algorithm, blockchain technology blends more easily in the market, causing huge benefits. While on one hand blockchain technology enhances transparency and builds safe transactions amongst peers, Artificial Intelligence, on the other hand, can further improve system security. 

  • Automation of Tasks

Automation in technology can help to avoid many repetitive and tedious tasks. Many software packages are available which can display loads of information and data with just a click of a button, thus avoiding long waiting hours for results. So instead of spending time creating the tasks, the investment banker or any other financial professional can focus more on evaluating the results and their correct interpretation. 

Conclusion

After having understood the various ways in which technology is changing financial modelling systems, it is clear that big data and finance are going to be synchronous. Be it Artificial Intelligence, decision-making processes, blockchain, or automation of systems, technology plays a crucial role in deciphering information correctly and quickly. But there is some downside involved as well.

Inaccurate or improper use of these technologies can disrupt the system completely. It is necessary to make sure that these technologies are developed and maintained by experts and professionals who can

How is Digitalization Impacting Investment Banking?

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Everyone is aware of how the entire banking sector is advancing. In order to keep up with the industry, rapid adaptation of digitalisation is one of the main priorities of the banks. Digital transformation in all forms is the current global movement faced by all the banks. There are some of the major strategic priorities like Customer experience, Data intelligence, Operational efficiency and Financial insights and almost all the banks are treating transition with utmost importance. A bank has different divisions like Investment Banking, Retail Banking, Commercial Banking, Global Banking, etc and you will come across digital transformation in every division of the banks. 

One of the most profitable fields in the financial industry is investment banking and to understand what is investment banking all about, here are some broad pointers to keep in mind before you go through the rest of the article. Investment banks advise governments and organisations on how to raise money, how to merge or take over companies, and how to reshape the business most effectively. An investment banking division will have five key areas: – Equity Capital Markets (ECM), Debt Capital Markets (DCM), Leveraged Finance, Restructuring, Mergers & Acquisitions. While M&A focuses on business advisories related to mergers and takeovers, ECM and DCM focus on advising organisations and governments on raising capital. Leveraged finance is fairly like DCM but there is an involvement of larger risks. Restructuring is where bankers analyse the structure of a business. For example, debt/equity ratios. Once the scrutiny is over the company is restructured in the most effective way to run the business successfully. 

An investment bank is responsible for taking care of underwriting stocks, managing M&A, and also being the financial advisor of the organisations, governments or other financial institutions. For them, their scope of growth and making a profit depends on the contacts that an investment bank has firmly established over the time period. Start looking at the list of leading investment banks; how they have evolved over the years and what they are today, you will have a sketch of what is investment banking all about. 

Now since the coronavirus pandemic, the need to adopt digital transformation has doubled and to put up with today’s competitive market, the banks are left with no choice but to accept changes brought into the system. Upon completion of digitalisation in the investment banking division, the services become seamless with the help of emerging technology and the services are shifted to online platforms with lots and lots of data stored and driven from the backend. With the advancement in technology, investors and investment bankers are now prone to the usage of Artificial Intelligence, the Internet of Things, Blockchain and other technologies as a part of their everyday job. There is a reason why investment banking industry is known to pay a handsome salary and it is all the nerve-wracking hard work and extra hours of dedication that counts for it. 

As mentioned earlier, this banking division is one of the profitable fields and hence, the career in investment banking is also positive and growth-oriented. The range of an investment banker’s salary starts anywhere from Rs.2.46 lakhs per annum and goes up to 70 lakhs per annum. To understand why investment banking and how you can establish a reputable career in this field, you can start by doing a professional course in a program called CIBOP (Certified Investment Banking Operations Professional). This course offers you an above-the-line experience you would require to sustain and succeed in this industry, that is if you pick a career in investment banking.  

Steps Investment Banks are Taking to Cope with the Covid-19 Crisis

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The world never saw what was coming. The Covid-19 pandemic has impacted the global economy and the Indian economy. The downsizing and disruption of small and medium-sized enterprises, establishment of new business model and the business continuity plan, excessive demand and adoption of digitalisation and introducing a high standard of digital transformation like AI, Cloud computing, SaS and many more such trends were visible for quite some time in 2020 and also extended to 2021. The services like loan advancements, remittance, credit and debit cards, payments, investment management, risk management, raising capital and others were massively affected which resulted in crises of banks. This forced the possibility of revolution. The banks had to come up with alternative actions to regain the profitability margin.

Several operating divisions like commercial banking, retail banking, investment banking transformed to cope up with the Covid-19 crisis. Multiple challenges have affected revenue generations because of interruption in services, social distancing and digital mode of service offering. The investment banks specifically needed to take immediate actions as specified below.

  1. The services and offerings have to be digital, also known as touchless mode of operations
  2. Introduction of Artificial Intelligence and software that offers quality data and insights to drive company growth
  3. Offering self-service and smooth interface to enhance the experience of online platforms making it easier for customers to access
  4. Strong Infrastructure that can withstand or foresee risk also known as resilience

Based on the mixed impact on the Investment banking platform and how different firms responded or continue to respond to the Covid-19 crisis, it is expected that this division will undergo some permanent changes like the adoption of Cloud Technology and mutualisation of services through partnering with fintech companies; risk management which is majorly taken care of by the digital technologies; adaptation of new client engagement models because of a hybrid working ecosystem- virtual collaboration is trending.

To keep up with these permanent changes in the business model and succeed in the post-covid era, investment banks need to accept and adopt digital transformation and build resilience to avoid such global attacks in the future.

Just to have an idea of how investment banking works, we will highlight the top two ways to give an overview of their functionality.

  1. Mergers and Acquisitions: An investment bank will evaluate the companies and identify the strengths of each division which allows the M&As to happen at a fair price and in return the bank gets a certain percentage of the deal as their fees.
  2. Initial Public Offering (IPO deals): An investment bank helps set the price of the offerings going public for the first time and get enlisted on the stock market. They market it proactively to their clients and earn a commission on the raising capital.

There are other ways of how investment banking works such as Private Wealth Management, Prime Brokerage and Proprietary trading and these are as popular and revenue generation oriented as the other ones. 

Investment banking is one of the highest paying jobs in the world of finance. Investment bankers usually make 30-40% higher salaries because such banks are more profitable compared to other management firms.  Investment banks deal at an institutional level with big tech firms, global or national banks. Having a curiosity to know about this industry is good but also is important to know what do you learn in investment banking. You do not require any specific degree to learn investment banking but having said that, some skills in economics, mathematics, business and finance will add to your benefit when you are in an interview. An investment banking certification course will introduce you to several subjects like financial modelling and accounting, risk management and market analysis.

You may enrol yourself for a program like Certified Investment Banking Operations Professional that offers you investment banking certification which will help seek clarity on what you learn in investment banking. Once you have an entry into the industry, you can only see yourself flourish and achieve a future that you dreamt of.

How Does an Investment Bank Work?

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What is an Investment Bank?

Investment banks are special divisions in the banking sector that specializes in providing advisory-based financial services to help their client with large scale financial transactions. It leverages its large network and financial expertise to raise capital for its clients who are generally large corporations or high net worth individuals. From a broader perspective, investment banks play a major role in effectively channeling funds in the economy by connecting the borrowers and lenders.

The investment banks act as mediators in large-scale complex financial transactions to ensure that their clients get a fair share in the deal and remove any anomalies in the process. Investment banks are popular for providing their financial expertise to companies raising funds from the public through IPOs. In addition to valuing the company and finalising the stock price, the investment banks also act as underwriters in most cases and hedge the risk for companies to some extent.

Functions of an Investment Bank

Let’s understand the functions of an investment bank in the context of the work carried out by it.

  1. Initial Public Offering: Investment banks play a key role in assisting the Initial Public Offerings (IPOs). They help new organisations with good potential to raise funds from the public by offering their shares through IPOs. Investment banks have a major role to play when it comes to deciding the optimum share price by valuing the company based on their revenue and profits. Investment banks have to conduct all the due diligence and research work to find out the financial standing of the business and provide a fair valuation.
  2. Mergers & Acquisitions: Another important role played by investment banks can be highlighted in the mergers and acquisition deals. Mergers and acquisitions are fruitful for companies who want to reduce the competition and profit collectively from improved synergy. Mergers and acquisition can also help companies to venture into new markets and serve new customers. It helps them leverage the network, customer base and expertise of the other companies and benefit from it. The mergers and acquisition process requires a fair valuation of the companies being acquired or those who are acquiring. Investment banks act as a mediator in the merger and acquisition deals to ensure that their client’s interest is being protected.
  3. Advisory services: Another major function of an investment bank includes providing investment guidance to its clients. Investment banks work with big corporations and high net worth individuals and guide them on profitable investment opportunities. Generally, those investments are a little complex in nature and need professional guidance and oversight to reap profits. This includes alternative investments such as private equity, venture capitals, hedge funds, commodities, etc. Investment banks provide various advisory related services to their clients that help them improve their financial decision making.
  4. Market Making: Investment banks functions are generally categorised under two divisions; the advisory related services and the financing related ones. Apart from this, the investment banks also have a sales and trading division that serves the purpose of market-making. Selling and buying stocks on the exchanges also involve investment banks and they act as middlemen in the process. They buy and sell stocks frequently on the secondary exchanges whenever someone is looking to sell or buy stocks. This is why they are also responsible for market making.

The investment banking career is one of the most prestigious ones in the financial services industry and there are many who work hard to be successful investment bankers. Working in investment banking requires a lot of dedication and perseverance, you need to put in extra hours and do the job. Getting into the investment banking industry can be even harder, you can opt for an Investment banking course by reputed institutions like Imarticus Learning to boost your career prospects as it even guarantees job assurance with top-notch companies in addition to providing you with the required knowledge and skills.

Also Read: What are the Best Investment Bank to Work For

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How Imarticus Learning Helped Me Become An Investment Banker – Neelam Chauhan’s Story!

Posted on by Imarticus Learning

Like so many before her, Neelam Chauhan was fresh out of college and armed with a bachelor’s degree in Commerce, eager to take the leap into becoming a full-time working professional in the field of banking and finance.

But she knew that her degree alone would not be enough to convince potential employers to take a gamble on her. She had to amplify her industry-specific knowledge and skills, especially if she was serious about becoming an investment banker like she wanted to be since her college days.

It did not take long for Neelam to come across Imarticus Learning’s flagship Certified Investment Banking Operations Professional (CIBOP) program online, and after speaking with an Imarticus counselor, she was convinced that enrolling in the program was the best career move to make. Her decision was rewarded handsomely, with Neelam crediting Imarticus Learning’s CIBOP program for her immense professional development and preparing her for a life as a modern-day investment banker.

When asked to rate Imarticus Learning’s CIBOP program, Neelam did not hesitate to give it a score of 5 out of 5, citing the depth and efficacy of the course content, the vast experience of the teaching faculty, and the real-world applications of all that she learned during her tenure with Imarticus Learning as factors influencing her positive judgment.

Additionally, she highlighted the importance of guest lectures from working industry professionals that provided her with extremely valuable insights into the functioning of current investment banking practices, products, and procedures that she would not have received from traditional textbooks or other mediums.

The resume building section of the CIBOP program was another massive benefit for a fresher like Neelam, as she did not know how to draft a professional resume before joining Imarticus Learning. This gave her further leverage in her pursuit of becoming a distinguished investment banker.

Neelam reserves very high praise for Imarticus Learning’s CIBOP teaching faculty, particularly for Mrs. Lourdes Miranda, who she says “has been a great teacher and understands the needs of students very well. She has a vast spectrum of investment banking knowledge, and I’m grateful for the way she shared it with us.”

Neelam believes that any young professional aiming to boost their career in investment banking should look no further than Imarticus Learning. The comfortable and nurturing study environment, the world-class staff, the numerous job placement opportunities provided after successful completion of the CIBOP program, and her overall learning experience and personal journey make Imarticus Learning the obvious choice for budding investment bankers like herself.

To find out more about Neelam Chauhan’s experience at Imarticus Learning, please click here.