The importance of infrastructure and Investment banking in 2017

by Pooja Late so cut

Many people haven’t recognized the fact that the modern economy is a huge global network. Banking is comprised of commercial banking, consumer banking, investment, asset management, global corporate and investment banking. Infrastructure Investment requires banks to render financial demand or services for clients, such as foreign exchange, fixed income, trading of derivatives, commodity, equities or advisory services for acquisitions and mergers. Infrastructure investments are done by investment banks. These banks are defined as firms that assist other companies in growing their financial capital in the capital markets. Moreover, this is done through bonds and stock. They perform initial public offerings, act as brokers and trades on bonds and securities. In this write-up, we will give you the seven importance of investment banking.

The importance of investment banking are numerous to mention, but the following are some of them.

· Investment management: Investment Bankers provides advice to investors to manage and trade various securities such as bonds and shares, to purchase securities and other assets like mutual funds, hedge fund, real estate etc. Those known as an investor may be big fund houses, financial institutions or private investors. In the investment banks, there is the investment division and it is divided into different groups, namely private client services, and private wealth management.

· Research: This is another importance in investment banking. They review companies and write reports about their prospect with buying or selling ratings. There is not any direct revenue generation through research, instead, the information produced or gathered by them is used in guiding investors and for acquisitions and mergers.

· Risk management: This activity is continuous and involves the analyzing of the credit risk and market, which buyers are taking onto the balance sheet in carrying out their daily trades. With this, they are able to set limits on the amount of capital.

· Boutiques: Boutiques are small investment banking companies that provide financial services. They are specialized in the trading of bonds, provision of technical analysis, advising for acquisitions etc.

· Mergers and Acquisitions: Another importance of the investment banking include the corporate finance, mergers, and acquisitions, which comprises of coordinating with bidders, subscribing to a security insurance or the negotiation with a merger target.

· Structuring of Derivatives: This is a recent division comprising of highly technical and proficient workers working on the creation of a complex structured derivate products. These products normally render much greater returns and margins than basic cash securities.

· Initial Public Offerings: They are responsible for facilitating private and public corporation’s initial public offering through the provision of underwritten services. Other services include foreign exchange management, acting as intermediaries in trading for clients.

Author’s Bio

Raphe Timothy in this post enlightens his ardent readers’ infrastructure finance. He also explained how investments banks are important in providing the asset management banking require by those in need of funds.