Investment Bank

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Investment Bank helping IPO listing

• Group 8 members
• Tam Sio Peng, Pinky 033084
• Wong Ka Wing, Wing 043100
• Kwan Long Wai, Carlos 043130
• Chan Wing Hong, Terry 043099
• Yuen Chi Wing, Stephanie 043106
• Cheuk Ying Ling, Monique 043098

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Agenda
Introduction and investment bank introduce Wong Ka Wing, Wing
Investment bank business area Cheuk Ying Ling, Monique Yuen Chi Wing, Stephanie
ICBC Listing road show Chan Wing Hong, Terry Kwan Long Wai, Carlos Tam Sio Peng, Pinky
Forecasting and conclusion Cha Wing Hong, Terry Wong Ka Wing, Wing
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Concept of Investment Bank

• Europe
• No Division between Investment Banks and
  Commercial Banks
• All done by the so called Universal Bank, or
  Merchant Bank
• Eg. Deutsche Bank AG, ABN AMRO

I
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Concept of Investment Bank

• Concept of IB is different in US and Europe
• In US
• Clear division between Investment bank and
  Commercial bank, the functions are different
• After the Stock Market Crash of 1929

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What is Investment Bank ?

• type of wholesale financial institution
• firms-originate
• -underwrite
• -distribute
• new security issues of corporations and
• government agencies
• Unlike traditional bank X accept deposits from
  and provide loans to
• INDIVIDUAL

C
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Functions of Investment Bank

1. Assist Corporations in Raising Funds
2. Provide Strategic advisory services
3. Middleman

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Business Area

• 2006, Merrill Lynch Co. was ranked _______th in
  the list Fortune 500
• Offices in ______ countries
• About ______ trillion total client assets
• 2004, about ______ IPOs and raised gt 43 billion
• 2005, about ______ IPOs and raised gt50
  billion

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Business Area

• 1914, the business was started and named by
  Charles E. Merrill and Edmund C. Lynch.
• 2006, Merrill Lynch Co. was ranked 34th in the
  list Fortune 500

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Business Area

• Offices in 37 countries
• About 1.5 trillion total client assets
• As an investment bank, it is a leading global
  trader and underwriter of securities, a strategic
  advisor

B
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Business Area
B
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Business Area

• GMI(Global Markets Investment Banking)

Business distribution of GMI
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Business Area

• GMI (contd)
• 2004, about 216 IPOs and raised gt 43 billion
• 2005, about 250 IPOs and raised gt50 billion
• More consulting fees from underwriting and
  distribution services? ?revenue

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Business Area

• GPC(Global Private Client)
• Advice-based wealth management services and
  products to individual clients and businesses
• Support for their financial advisors
• e.g. private banking investment, global
  banking, marketing, investment wealth
  management, retirement and direct services

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Business Area
Net Earnings of the Merrill Lynch from 2002 to
2005
Increased 49.99 from 2002 to 2005
C
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Business Area

• Experience in China
• Joint Global Coordinator and the Main Underwriter
  of the IPO of SINOPEC Shanghai Petrochemical Co.
  Ltd. (????)
• Main Underwrite of the IPO of Shenzhen Expressway
  Co. Ltd. (??????) to raise 2.3 billions dollars

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Time line of the ICBC listing
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Time line for ICBC listing
March 9
July 12
Sept 21
Merrill Lynch became the underwriters of ICBC

• Shares and H-Shares to be decided listing at the
  same time

Passed listing listen
Oct 16
Oct 20
Oct 24
Subscribing information releasing for public
The upper limit price of H share to 3.07 was set.
Stop subscribing 76 times over subscribing
Oct 27
Oct 25
A-Shares and H-Shares listed same day. H-Shares
price reached 3.63, which was the daily high at
the first day listed. Merrill Lynch add-in the
clause of under-writing group not to issue
warrant during stable price period.
3.5 black market price
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Oct 16
???????????????,??????(????? ??? ?)
1
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ICBC ???
20
?????????,???????
3
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Oct 20
??????,???????????
???????,?????????????(??????)?
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Oct 27
??H??A????????????
???3.60 ???3.63 ???3.49 ???3.52
9
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ICBC listing information
A-Shares H-Shares
Price 3.12 reminbi 3.07
Capital Freeze 700 billions reminbi 491.8 billions
Over subscribing 13.97 times 74.74 times
Listing date Oct 27 Oct 27
Fund raise 5.9 billions US dollars 21.9 billions US dollars
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Forecast of Investment Banking

• Marco-environment
• Global IB ?
• CEPA and China enter WTO
• Corporation listed in Hong Kong ?

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Forecast of Investment Banking

• Expected Trend
• ?no. of Chinese Corporation IPO in Hong Kong ?
• ?Demand of IB service ?

8
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Forecast of Investment Banking
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Conclusion

• Set the share price,
• No. of share issued
• Assisting the processing of Roadshow,
  international Roadshow
• Attract more international investors
• Stablize the share price

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END