CaseStudyICBC-HongKongShueYanUniversity.ppt

1、Econ 310 Financial Institutions in Hong Kong,Investment Bank Merrill Lynch,The Nature of Investment Bank,- intermediary that help corporations raise funds,Role of investment banks,- underwrite the initial sale of stocks and bonds- a deal maker in mergers, acquisitions, and spin-offs- a middleman in

2、the purchase and sale of companies- a private broker to the very wealthy,The revenue of investment banks,- Commission- fee income- Spread- principal activities,Global investment banking revenue increased in to $52.8bn 2005.- This was up 14% on the previous year- The recovery resulted in an increase

3、in M&A activity,The US was 51% of the totalEurope (with Middle East and Africa) generated 31% of the totalAsian countries generated the remaining 18%.,Well-known investment banking firms,- Morgan Stanley- Merrill Lynch- Salomon brothers- First Boston Corporation- Goldman, Sachs.,The Background of Me

4、rrill Lynch,1914 - Charles E. Merrill & Co. opened for business at 7 Wall Street in New York Cityon January 6. A few months later, Edmund C. Lynch, joined him 1915 - The name was officially changed to Merrill Lynch & Co. in,1941 Merrill Lynch became the first company of announcing annual report at W

5、all street1955 It gained a underwriting contract of 100million in the first time1960 and 1961 It set up in London and Tokyo separately1993 It became the first securities firm of Beijing,- with offices in 37 countries and territories - total client assets of approximately $1.5 trillion- ranked No.34

6、in Fortune 500 from the April 17th 2006 issue- topped Barrons annual Top 100 Financial Advisers again in April 2006, with the largest number on the list of any firm 22,Two core businesses of Merrill Lynch,- Global Private Client - Global Markets & Investment Banking Group,Services of Merrill Lynch-

7、Securities origination, brokerage, dealer and related activities- Investment banking- Securities clearance, settlement, equity financing and services, including prime brokerage- Wealth management products and services, including financial, retirement and generational planning- Banking, trust and len

8、ding services- Insurance and annuity products and annuity underwriting- Private equity and other principal investing activities- Global investment research- BlackRock,Major locations- New York City, New York, U.S., global headquarters - Jacksonville, Florida, U.S., corporate center, supporting North

9、 America operations - Hopewell, New Jersey U.S., corporate center, supporting North America operations - London, UK, European headquarters - Hong Kong, PRC - Tokyo, Japan,Other Services of Merrill Lynch,Two global business- global private client - global markets,Global private client,Main Services p

10、rovidedGPC business modelTarget Customers,Global private client,Four main services of small and mid-sized businesses :- integrated cash management - flexible financing - retirement & benefits - personalized advice,Global private client,Role of GPCTotal MerrillSMAwards,Global Markets,Services provide

11、dFixed Income, Currencies and Commodities group (FICC) Global Equities Award,Performance of Merrill Lynch,2005 Financial DataTotal Revenue : $ 26.0 billion USDChange : 18% Net Profit Margin : $ 5.1 billion USDChange : 15%Total Asset : $ 681 billion USDChange : 8.4%,Revenue from : - Asset management

12、fees- Portfolio service fees- Commissions of Equities and Mutual Funds- Principal transactions- Underwriting- Strategic advisory,Key Event in 2006 Merger Merrill Lynch Investment Managers with BlackRock, Inc.- 49.8% shareholdingmore than $1 trillion in assets under management,Stock Performance of Me

13、rrill Lynch (MER),Primary Sponsor（保薦人) of IPO,Morgan Stanley :凹凸科技 (457)中國建材 (3323)湖南有色 (2626) 世茂房地產 (813)中煤能源 (1898),Goldman Sachs :上海先進半導體(3355)中國銀行 (3988)建滔積層板 (1888)中國通信服務 (552),Merrill Lynch : - ICBC (1398)- 中國交通建設 (1800),Case Study: ICBC,210 hundred million US dollars ICBC will purchase in Hon

14、g Kong and Shanghai, distribute 483 hundred million for A shares and H shares Hong Kong release partially approximately composes for 3/4 ICBC can become the stock which goes on the market in Hong Kong and China.,Feburary,2006 ICBC gathers capital the amount 100 hundred million US dollars the bank ch

15、oice goes on the market sells on consignment business certainly to have to enjoy a higher well-knowingness in the local capital market, and has a stronger comprehensive strength.,March 2006requested them to make the suggestion estimate and the detailed plan book,July 2006 ICBC incurs the stock price

16、 approximately 2.76 dollars the independence buyers should have 3,000 dollars,September 2006, ICBC in the preliminary of raising capital which submits to Securities and Futures Commission,the ICBC can distribute 130 hundred million of A shares, but H shares achieved 353 hundred million public shares

17、 are partial initially only accounts for 5%,The ICBC amounts between 180 to 210 hundred million US dollars ICBC of stock price possibly lies between 2.6 dollars to 3.05 dollars,On 27 of October, 2006 (1st Day)All independence buyer totaled gains approximately 16 hundred million dollars. ICBC of H sh

18、ares receives nearly 15%, reports 3.52 dollars each independence buyers gain 319 dollar,ICBC,Merrill set the right price Over subscribe exist,ICBC,- 1st day (opening) Share price $3.60 Higher than listing price ($3.07 $3.6) 17%$450/1000 share,ICBC,China Merchants bank 24.9%Bank of China 15.3%ICBC 14

19、.6%Bank of Communication 13.2%China Construction Bank 0%,ICBC,- Professionals expectation Long term - Trend is going upward (share price),Competitors,Short term,Great competition in local market58 banks providing investment banks services many choices to choose underwriting IPO e.g. ICBC case,Compet

20、itors,local banks are expanding their business to different categories, e.g. HSBC,Competitors,1. Commercial bank the Hongkong and Shanghai banking co-operation2. Investment Banking - HSBC Investment (Hong Kong) Limited3. Insurance4. Leasing, Finance and Factoring5. HSBC Securities Services6. Global

21、Payments and Cash Management7. Trade Services8. Corporate, Investment Banking and Markets9. Property Services10. Shipping,Competitors,Long termMerrill is not a local I-bank, cannot share the benefit of CEPACompetitors doing more advanced Market predicted is negative to Merrill,Conclusion,The End,Group membersNg Sin Kwan 043057Chiu Pui Ming Stephanie 055012 Or Chung Ching 035165 Lai Man Yan 043012Fan Man Kit 043022Wong Ping Yiu, Brian 043195,