Investment Banking

Running head: INVESTMENT BANKING
Investment Banking
Name of the Student
Name of the University
Author’s Note

1INVESTMENT BANKING
Table of Contents
Requirement 1............................................................................................................................3
Requirement 2............................................................................................................................4
Risk Factors in Venture Capital.............................................................................................4
Private Equity Valuation Methods.........................................................................................4
Requirement 3............................................................................................................................5
Underwriting Risks Faced by Investment Banks in an IPO...................................................5
Auction Process for UK Government Securities...................................................................5
Requirement 4............................................................................................................................6
Requirement 5............................................................................................................................7
Six Tenets of Dow Theory.....................................................................................................7
Key Technical Techniques and Indicators for Successful Trading........................................8
Requirement 6............................................................................................................................8
Requirement 7............................................................................................................................9
How to Calculate Time-Weighted Returns (TWR)...............................................................9
Reason for Usefulness of Time-Weighted Returns..............................................................10
Requirement 8..........................................................................................................................10
1. Characteristics..................................................................................................................10
2. Settlement Method of Investment Transactions by Authorized Fund Managers (AFMs)
..............................................................................................................................................11
Requirement 9..........................................................................................................................11
Use of Derivatives by Investment Bankers..........................................................................11
Credit Default Swaps (CDS)................................................................................................12
Systematic Risk....................................................................................................................12
References................................................................................................................................13

2INVESTMENT BANKING

3INVESTMENT BANKING
Requirement 1
i. Historical Background: Tadawul is considered as the only stock exchange in Saudi
Arabia and it is also the main stock exchange in the Gulf Cooperation Council (GCC)
countries. Only 14 companies were listed as the market was informal through 1970s.
However, the government of the country developed a ministerial committee for
developing and regulating market. The Capital Market Authority (CMA) was
developed in 2003 as the sole regulator of the market and this led to the development
of Tadawul or the Saudi Stock Exchange in 2007 (tadawul.com.sa 2019).
ii. Structure and Operation: The Saudi Stock Exchange is a joint stock company as per
the structure and it is also considered as the sole entity in Saudi Arabia in order to act
as the Security Exchange. In case of the operations, the Saudi Stock Exchange
involves in carrying out listing and trading in securities, along with deposits, clearing,
transfer, settlement and registration of the ownership of the securities trade in the
Exchange (tadawul.com.sa 2019).
iii. Products and Markets: The products of Saudi Stock Exchange are equities, Real
Estate Investment Traded Funds (REITS), sukuk, bonds, ETFs and others. In addition,
Saudi Stock Exchange operates in certain market; such as energy, material, capital
goods, transportation, media, retail, food and beverage, banks, insurance,
telecommunication, utilities, real estate and others (tadawul.com.sa 2019).
iv. Role of Investment Banks in Capital Market Activities: The major roles of
investment banks in the capital market activities is to serve as kind of intermediaries
between the investors and companies with the use of IPOs (initial public offerings). In
addition, investments banks provide their clients with underwriting services for the
issue of new stock when a company takes the decision to go public with the aim to
seek equity funding (Webb and Martin 2017).