The glamor of investment banking may have worn off after the demise of Lehman Brothers and the recent capital market crash, the public backlash against bankers’ mega bonuses, and recent layoffs. But investment banking remains an important part of the finance industry.

 

Investment bankers help clients find financing solutions and opportunities as they grow their businesses or economies. A company wishing to expand market share may consider a listing on the stock exchange, a merger, or an acquisition. Investment bankers advice clients on their best move and how to execute it. They help corporate clients tap equity capital markets through initial public offerings (IPOs), placements, rights issues, and other equity or equity-linked products. They can also help governments raise funds via sovereign bonds.

 

Also in Africa, IPO transactions have fallen in recent years, but debt capital market transactions have bounced back. Investment banking is a demanding job that typically involves long hours, a lot of meetings, and negotiations with clients, bankers, lawyers, regulators, consultants, and other parties to a transaction. Investment bankers must have excellent interpersonal and organizational skills to handle with different parties and parts of a transaction. “Investment banking is a high-volume, high-risk, high-reward profession,” says Ha Trung Hieu, CFA, head of corporate finance at Vietcombank Securities. You have to be prepared for moments of frustration where you are stretched too thin and moments of exhilaration when everything clicks into place.” Timing when to go to market and pricing the product are critical in any transaction. “The way you structure a transaction for a client is where the skills of an investment banker are tested,” says Bhadra Kanaiya, CFA, associate vice president at Euromax Capital in India. Competition for client mandates is stiff; hence, innovative financing ideas count the most.

 

Investment banks are expected to shrink in size over the next few years. In Africa now, possible M&A and debt capital markets are faring better than equity capital markets. Competition is high for entry-level investment banking jobs. Strong analytical and quantitative skills are important; so are multitasking and communication skills

 

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