Securities Company information
1- What is the nature of the securities industry is? What is capital market? What is the primary market and the secondary market?
Always I wanted the work he has done (Securities IT) to do a comprehensive description, but do not always know where to start. Today, more free, relax, fight begins to write. The title of this series of long to be good: called "securitization company information panorama." I want to give just graduated from university, workplace or wandering, or interested people in this industry to make a fundamental, inspiring, easy to understand description. If you can say after watching one: Oh, this line is so, then my purpose even if achieved.
The securities industry in the end is what to do? The most simple question, but the most difficult to answer. When the news reports Shanghai stock index rose another how much, when a report said a large company acquired another big company, when your neighbor tells you he started investment funds last year how much money, when people around you say he the stock 4 years down 100% loss dead, when TV drama Wall Street financier intrigues describe how, when you see people of Hong Kong in the morning to queue up for ICBC listing of the subscription application form, in fact, these are related to the securities industry .
For the securities industry in the end is what to do, in fact we are more or less have some idea, but you really want to grasp its core characteristics really is not an easy task. Let me try to do this:
First, the main body of the securities industry, securities companies, investment banks named in the US securities firm. With respect to commercial banks mainly engaged in currency, mainly engaged in investment banking bonds and stocks. Currency in circulation in the money market, bonds and liquidity of the stock market in the capital. Note: The money and capital markets of these two concepts, defines the different functions of banks and securities firms fundamentally, a detailed analysis below.
Whether individuals or businesses, if you need to store the money, the cash is not safe in his hands, so you generally on the commercial banks, which form a personal deposits and corporate deposits, banks need to pay interest on your pitiful; On the contrary, if you (natural or legal) need the money, you can usually find a bank, the bank will give you a loan, you must pay the bank interest; at the same time, may also have complementarity between the Bank and the Bank of time , mutual borrowing some money and also have to pay interest. Note that these money borrowing and lending behavior is often short-term financing, both in money for the subject matter, scholars call money market, this market is the main bank. Our country has "inter-bank bond market", "Foreign Exchange Trading Center" This is the money market, mainly huge amounts of money in the bank inside borrow and loan, obtain so-called "overnight interest." The interest is counted in days, attention: to the capital markets to benefit from a much longer period may
Some companies (so-called legal person) sometimes need long-term financing, term often higher than five years, they came to get the required funds through the issuance of corporate bonds, or stocks, this time they can not find a bank, but to find investment bank ( It is a securities company). So they designed a securities company for securities scheme, may be a five-year corporate bond, or is the stock. Then securities companies have to find a group of people (possibly legal person may be a natural person) to buy these securities. Then securities company acts as an intermediary in the middle: the enterprise issuing stock investors to buy stocks. Associated with these securities market called the capital markets.
Let us remember: short-term financing and long-term financing is the difference between the bank and the most essential business functions of investment banks difference!
User correction:
The most essential difference between the difference between banking and investment banking functions are : indirect financing and direct financing.
Now most countries do not allow banks and investment banks Mixed (ie: both investment banks also operate banking business), such as Morgan, the investment bank Merrill Lynch to Citigroup bank.
The main function of the investment bank is to provide investors with the investors direct financing , namely the shareholders, whether it is the first offering (IPO listed) or secondary market trading, are direct investment, the investor is a shareholder, is the investor, stock performance of listed companies on the balance sheet as an asset rather than a liability, ie after financing, corporate assets increased.
The main business of banking , indirect financing, providing investors and indirectly financing the investment side, the performance of depositors put money in the bank, and bank loans from lenders, depositors and lenders rather than directly signing agreement financing, but through intermediaries to reach let this bank financing. Enterprises by banks to raise the funds, the performance of liabilities on the balance sheet, shall be payable at a certain time in the future.
Explain the details , let us look at the difference between two blocks of the financial industry.
In theory the core characteristics of the securities industry did describe later, let us from a more microscopic perspective (two stories) to say something about the core business of securities companies.
1, Metersbonwe is a private enterprise, after after 10 years of rapid expansion, cash flow difficulties, hoping to get a lot of money (long-term financing) for the expansion of production base and more stores in the country. It now has five shareholders, is Wenzhou, the total share capital is 20 million shares, they want to issue 30 million shares, 5 per share, a total can get there from the new shareholders 150 million yuan, with the money to do these many business expansion thing.
CESL is an investment bank (securities firms), after obtaining commission Metersbonwe, to help it to produce a detailed IPO (initial public offering IPO) plan, approved by the SFC (Securities industry regulators) after CESL first in dozens of fund companies (Metersbonwe is the seller of securities, these funds are buyers, CESL is an intermediary) in asked how many companies are willing to buy a lot of how much the price of the number of US special Si Bangwei shares, after bottom of my heart, CESL again ask the country's individual investors through the trading system of the Shanghai stock exchange: "you this tens of millions of investors who in Metersbonwe Yeah interested in stocks, a surge of about five Oh, subscribe as soon as possible, without waiting. By the way, when you purchase money should come first hit Oh, Duotuishaobu!. "
After the end of the subscription period, China and Europe to international equity funds count how many busy, how many of those shares to individual investors, if too many people subscribe far exceeds the total value of shares issued, then draw lots to decide who to buy how many shares. Busy for a few days, well, finally over the issue, a total of Metersbonwe help get 160 million yuan, leaving three percent of the 500 million hard costs (underwriting fees, more than enough of it, so that investment banks make money thing) . (Note: the issuance of securities market (also called primary market) is the core investment banking business , which most people tend to not understand, within the securities companies, the highest wages paid too, the most glamorous group of people is to do business Waiting List IPO's.)
2, Wang is a Shanghai Health Bureau of retired workers, particularly the stock market 96 years began to hear to make money, in securities companies (investment banks) opened the account (fund shareholder accounts and accounts) to start stock. So he ran to the hall every day securities business department's. The first few years made a lot of money, laugh in a good mood, since 2001 the mood to laugh. It fell 5 years, 01 years to buy Shenzhen Development from 15 down to five. Life savings are now lost, and they knew a great risk of the stock market. Not long ago, the purchase of new shares in Metersbonwe but did not sign. Alas, 0.5% success rate at this level the market is too low, or doing it in the secondary market. (Note: The primary market refers to the stock issue market, the secondary market refers to the stock market in general population exposure to primarily the secondary market, the so-called stock business people tend to notice only on the secondary market of securities companies while ignoring its stock. distribution business.)
In short, today to find out two things:
1, the difference between money market and capital market, securities companies (also known as investment banks, investment banks broad sense) is the main body of the capital market;
2, the capital market is divided into primary and secondary markets, narrow the investment banking business is the primary market (issuance of securities market), the masses are more exposed to the secondary market business, the so-called stocks.