Assisting individuals, corporations and government in raising capital
Decisions related to merger and acquisitions
Valuation - Finding out the fair market value of a corporation
Market making – company or individual that offer both buy and sell price
Derivatives and equity shares trading
FICC (Fixed income instruments, currencies and commodities) services
Issuance of security by acting as underwriter or/and by acting as the client’s agent
Acting as broker for the clients
Two lines of business in investment banking:
Sell side – securities trading or promotion, for example research, underwriting, etc
Buy side – advising institutions in matters related to buying investment services, for example life insurance, mutual funds, etc
Role of investment in IPO (Initial Public Offering) - The investment bank finds out the value of the client corporation, helps the client in developing its red herring prospectus, offers shares to a select group of investors and comes to a fair market price per share which should be offered. The investment bank helps the client at each stage so as to maximize the client’s gain out of IPO.
The top global investment banks are Goldman Sachs, JP Morgan and Morgan Stanley.