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Category: Merchant Banking


Ever imagined how risk free derivatives trade actually is :

Quoting from the famous book traders guns and money :

Breaking down the hierarchy of the trading, “There are salespeople-they lie to clients. Traders lie to sales and to risk managers. Risk managers? They lie to people who run the place-correction, think they run the place. The people who run the place lie to shareholders and regulators”.

Here is self-explanatory poster how these different department see each other. To ease things out, you have to read from right. How the research department see themselves visa-vis other departments like Syndicate, DCM, Trader, Sales

global markets

 

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Kotak Bank will buy ING Vysya bank in an all-stock transaction that gives ING Vysya shareholders 725 shares of Kotak blogBank if they own 1000 shares of ING Vysya.

This will create a larger bank in assets; the new Kotak bank will be about 50% larger. However, the price increase in Kotak’s shares (to Rs. 1200) might have fully factored in the growth increase, without allowing for any issues in the merger going forward.

All ING Vysya branches and employees will become Kotak branches and employees” after the deal is completed,” the banks said in a statement yesterday. “Congratulations @udaykotak on a brilliant merger move. The enormous synergies are obvious,” industrialist Anand Mahindra tweeted after the deal was announced.  Continue reading

India being emerges as one of the big market for (M&A) Mergers and acquisitions, in the last decade. The market for M&A is expected to bloggrow at a very rapid pace and sooner we may see many hostile bids by the Indian companies, as they are very uncommon in India. Hostile takeovers must be recognized as manifestations of a market for corporate control. Advanced economies regulate M&A activities only from competition angle.

Private equity continuing to invest capital into India Inc,  Hope that there would be some hostile takeovers because that is something Indian market badly needs to ensure good value creation for the shareholders.

Few of the cases which I can recall for hostile take over in India are Abishek Dalmia on Gesco and Arun Bajoria on Bombay Dying. Both were medium-sized barons outnumber their bigger peers, and follow quite different paths when it comes to running their businesses – owning substantial stakes in their business and thus less vulnerable to takeover. Continue reading

Investment Bankers Pitch

The weekend was adventurous for India; last night PM Mr Modi did the hard selling for India, obviously learning by itself for blogInvestment bankers. The pitch was very strong in the economic sense.

I was reading Traders Guns and money over the weekend and found some interesting jargon and pitches made by the Investment bankers.

Statement: As a Leading dealer with a global platform, we are the major player in the market.

Translation: We have spent a fortune to build this business and are now prepared to spend millions more subsidizing your requirements.

Statement: We have one of the most talented teams in this space.

Translation: Our staff are vastly overpaid and on huge guaranteed bonuses. Continue reading

Who is a Rogue trader? Every one of us has a rogue in us. Trading is such a profession where the set rules procedures are not blogfollowed if you are making money for the firm. It would not be harsh to define rogue trader as a lone-wolves, because they are being covered by the rogue managers.

But, even lone-wolves belong to a group. They just prefer to avoid the assistance of others in certain matters. The rogue trader’s pack is the howling, fierce management for which he works. Lone-wolves always have alpha members they take orders from, don’t they? Lone-wolves are sometimes excluded from the pack to protect that alpha-male, thus preventing ‘in-breeding’ in the pack. It’s exactly the same in the trading world of finance. The rogue trader is excluded from the pack, forced to work alone, shunned so that if caught, there will be no ‘inter-breeding’. The alpha-male manager won’t be caught and be brought down if the rogue falls!   Continue reading

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