金融英语教案（修改版） - 图文

Chapter One Investment Banking

Lecture I Investment Banking

Inspiring Question:

Imagine you are the CEO of Sinopec Petroleum. Now you are planning to build a pipeline from Xingjing to Shengzhen, the investment of which will be as much as 10 million Yuan. How Can you get so much money for the pipeline project? The ways of financing a project: Traditional ways:

(1) bank loans ?Commercial banking (2) debt securities ?Investment banking (3) equity securities ?Investment banking Non-traditional ways: (4) Venture Capital (VC) (5) Private equity (PE) (6) Angel Investment (AI)

（7）credit derivatives, such as CDS(credit default swap信息违约互换) and CDO（Collateralized Debt Obligation，担保债务凭证）

Part I Introduction

Section A—The basics

1. investment banks/ banking/ bankers

(1) Investment banks are intermediaries between people who have money and people who need money. (Textbook)

An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting(承担) and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary(辅助的，附加的) services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.(Wekipedia)

投资银行，简称投行，是一种以经营证券业务为主的金融机构。现代意义的投资银行基本不属于银行的范畴，而是一种专业证券机构（大陆称为券商）。根据国家和时代，投资银行一词的具体内涵也有所不同。通常，一个完整的投资银行包括了重组并购、企业融资、证券发行、承销、研究、投资咨询、经纪、资产管理、财富管理等一系列业务，但也有的只专精于某几个方面的业务。在中文语境中，较狭义的投资银行仅指证券承销和并购业务。（维基中文）

Top 10 banks

The ten largest investment banks as of December 31, 2011, are as follows (by total fees from advisory).[11] The list is just a ranking of the advisory arm of each bank

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and does not include the generally much larger portion of revenues from sales and trading and asset management. Rank

Company

Fees ($m)

1. JP Morgan Chase $5,517.62 2. Bank of America $4,945.45 3. Morgan Stanley $4,066.30 4. Goldman Sachs $3,852.95 5. Credit Suisse $3,434.32 6. Deutsche Bank $3,178.15 7. Citigroup 8. Barclays 9. UBS

10. Wells Fargo

富国银行

$3,166.33 $2,793.70 $2,362.69 $1,597.99

(2) investment banking

Investment banking is the process of getting and managing money. (3) investment bankers

Investment bankers are the people, the experts, who work for investment banks and help individuals, business and governments to reach their financial goals. 只要是为投资银行工作的专业人士，都统称投资银行家。

2. investment bank’s business(P130) (1) providing advice and guidance ① helping you set realistic and appropriate financial golas and ② developing strategies to reach them;

(2) arranging for the money you need at the lowest possible cost, including: ① drafting prospectus(起草招股说明书) ② Road show ③ IPO

(3) helping you manage financial risk; and

(4) buying and selling financial instruments like stocks and bonds. In addition: (5) Research:

① making researches on companies (for selling or buying their securities) ② setting mathematic models for hedging. 设计对冲的数学模型 (It is said this is the time of hedging rather than portfolio现在已经从“投资组合时代”进入了“对冲时代”)

(6) technology: making electronic trading software

Section B—Setting Goals

We only talk about business or government who are in need of investment banking.

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1. What may be the goals of a business to raise money ? (1) money for investment, such as:

building a new factory

buying the latest equipment,

developing a gold mining property, doing advanced scientific research, constructing a major oil pipeline, (2) money for mergers and acquisition (6) buying out a competitor

2. What may be the goals of a government to raise money?

Attention: ―buy‖ is different from ―buy out‖ (1) develop infrastructures, such as ① roads, highways and bridges

② mass transit (buses, subways, light rails) ③ water treatment facilities, ④ power generations

⑤ communication networks (2) building new schools

(3) provide tax and investment incentives

Section D – An Overview of Markets

A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties(交易各方) engage in exchange.

Three Main Markets:

① Markets for Goods,

② Markets for services, and

③ Markets for use of money ? financial markets A market can be ACTUAL or VIRTUAL. 1. The financial marketplace

① Demander (Buyers) in financial marketplace: individuals, families, companies and governments (who are in need of money);

② Suppliers (Sellers) in financial marketplace: People or organizations who have surplus money to their current needs and are willing to make it available to those who need it.

Actual financial marketplace: stock exchange

Virtual financial marketplace: any electronic trading system

2. Supply and Demand

Price: the mechanism that markets use to

Price of a balance supply and demand and to have the

bond/ stock transaction take place. The price here may

Supply of money refer to:

(1): price of a bond: (2): price of a stock

P*

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Demand of money Quantity of money Market Equilibrium (Read the last paragraph of P135) 3. Matching buyers and sellers

Who make the matching: An intermediary

How to match: via financial instruments (specifically underlying financial instruments)

4. Primary and secondary markets

Case Study: How to Cash a certificate(or a security, or a draft) before it’s maturity?怎样提前兑现（有价）凭证（或证券或汇票）。 Read the Case : Paragraph 2, P138. Solution: the certificate holder sell it to another investor, (usu. by discount or by settlement of the due interest.)

Definition of Primary and secondary market The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain bonds through the sale of a new stock or bond issue. This is typically done through a syndicate[disambiguation needed] of securities dealers. The process of selling new issues to investors is called underwriting. In the case of a new stock issue, this sale is an initial public offering (IPO). Dealers earn a commission that is built into the price of the security offering, though it can be found in the prospectus. Primary markets create long term instruments through which corporate entities borrow from capital market.

The secondary market, also called aftermarket, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. Another frequent usage of \market\is to refer to loans which are sold by a mortgage bank to investors such as Fannie Mae(房利美，美国联邦国民抵押贷款协会) and Freddie Mac（房地美）.

Section E How Suppliers Make Their Money Available?

(1) Loans

Supplier Demander Lender borrower Creditor债权人 debtor债务人 (2) Investments

The three most commonly used investment instruments are: real estate, loans (or debts) and shares.

Distinguish between loans and shares Loan holders Share holders Revenue from Interest and dividend and fluctuation of debt fluctuation of stock price price ownership N Y Repay of principal Y N Consequence of Force issuer into Can not get default bankruptcy principal back

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