Investment Banks in Egypt and Ghana: A Case Study of EFG Hermes in Ghana Versus HC Securities & Investment in Egypt.
Investment banks serve as intermediate between providers and users of funds. The purpose of this study is to compare between small investments banks in Egypt and Ghana as part of the financial sectors to provide financial tools and advices for investors in the financial markets. This promotes economic growth by improving the efficiency of the financial sectors. This study compares the factors that affect small investment banks in Egypt and Ghana such as the types of investment banking, population, capital markets, competition, economic conditions, and political conditions.
Ghana is small in size in terms of investment banking as it has faced several problems over the last decades, while Egypt performed better over the same period. The objective of this study is to explore the difference in behavior, transactions between firms and companies, and to investigate the long run growth effects. Accordingly, the following is a comparison between different types of investment banks:
- Equity capital rising (through initial public offerings “IPOs”, follow on offerings, and equity – linked “convertible”).
- Mergers and acquisitions- M&A (through buy side, sell side, split offs, hostile defense, hostile takeovers, proxy fights, and joint ventures).
- Debt-capital-raising (high – grade or investment grade, high – yield, syndicated loans, and tax – exempted funds).
- Financial sponsors, leveraged finance, restructuring, ratings, securitized products, consumer retail and healthcare, technology , media, telecoms, natural resources and corporate finance.
These operations are done to match with the other tasks of investment banks including mainly client relationship management, idea generation and problem solving, financial analysis, communication, assessment of opportunities, negotiation and structuring transactions, identify of potential investors, due diligence, and documentation.
Allen, F and D Gale, (1995), "A Welfare Comparison of Intermediaries and Financial Markets in Germany and the US." European Economic Review, 39, pp. 179-209.
Allen. F., (1993), "Stock markets and resource allocation," in: C. and X. Vivcs, cds , Capital Markets and Financial Intermediation (Cambridge University, Cambridge), pp. 81-104.
Allen, F., and D. Gale, (1999), "Diversity of opinion and financing new technologies," Journal of Financial Intermediation, Vol. 8, pp68-89.
Ajayi, S. I. (2019). Foreign Direct Investment in Sub-Saharan Africa: Origins, Targets, Impact and Potential. African Economic Research Consortium Publication
Stromberg, (2004), "Contracts, characteristics, and actions: Evidence from venture capital analyses " Journal of Finance , Vol. 59, pp. 2177-2210.
Baker, M , and P Gompers, (2018), "The determinants of board structure at the time of the IPO," Journal of Investment and Economics, Vol. 46, pp. 569-598.
Barth et al (2000) "Policy Watch: The Repeal of Glass-Steagall and the Advent of Broad Banking Bolton, P and D. Scharfstein, (1996), "Optimal Debt Structure and the Number of Creditors," Journal of Political Economy 104, pp. 1-25.
Boot, A. and A Thakor, (2000), "Can Relationship Banking Survive Competition?," Journal of Finance, Vol. 55, pp. 679—713.
Booth, J and R Smith, (1986), "Capital Raising, Underwriting and the Certification Hypothesis," Journal of Financial Economics, Vol. 15, pp. 261 —281.
Carosso V, (2019). Investment Banking Africa In 2018, Central Bank of Kenya: The Launch of Suntra Investment Bank Unit Trusts, April 7, 2019
Chemmanur, T. J., Fulghieri, P., (1994), Investment bank reputation, information production, and financial intermediation, Journal of Finance 49, pp. 57-79.
Chu, F.J. (2019), "The challenge and the myth of global investment banking", Journal of International Securities Markets, autumn, pp.219-23
Dewatripont, M and E Maskin, (1995), "Credit and Efficiency in Centralized and Decentralized Economies", Vol. 62, 541-555.
Dow, J., and G Gorton, (1997), "Stock market efficiency and economic efficiency: Is there a connection?," Journal of Finance, Vol. 52, pp. 1087-1129.
Gatsi, J. G. and Agbenu, D., (2006). A case of Cross- Boarder merger and acquisition in Ghana, Center for Finance. School of Business, Economics and Law, Goteborg University.
Geisst C, (1995). Investment Banking in the Financial System. Harvard University Press, Cambridge, MA., p p. 191-195.
Government of Ghana (GOG) (2003). National medium term private sector development strategy Ghana Government Policy Document. Government of Ghana.
Goar, J St (2019), "Salomon Inc: trading up to investment banking classy, but wise", International Investment & Banking Report, March, pp 1-6
Granger,(1973) Investment-banking contracts in tender offers: An empirical analysis, Journal of Financial Economics, Vol. 28, pp. 209-232.
Harjoto M., Mullineaux, D and H C. Yi (2019), 'Loan Pricing at Investment versus Commercial Banks: Competition in the Investment Banking Industry, Working Paper Hayes, S L III, Spence, A M., Marks, D V P. (2019), Harvard University Press, Cambridge, MA.
Hellmann, T, and M Puri, (2000), "The interaction between product market and financing strategy: The role of venture capital," Review of Financial Studies, Vol. 13, pp. 959-984.
Hellmann, T, and M Puri, (2002), "Venture capital and the professionalization of start-up firms: Empirical Evidence," Journal of Finance, Vol. 57, pp. 169-197.
Hochberg, Y., (2004), "Venture capital and corporate governance in the newly public firm," Working paper, Cornell University
Hoekman, B., and P. Messerlin. (2002). Trade for Development Growth in the Middle East and North Africa. New York: Council on Foreign Relations.
Hunter, W. C., Jagtiani, J., (2003), An analysis of adviser choice, fees, and effort in mergers and acquisitions, Review of Financial Economics, Vol. 12, pp. 65-81.
International Monetary Fund- IMF (2018). Annual Report. Washington DC: International Monetary Fund..
Kaplan, S., and P Stromberg, (2001), "Venture capitalists as principals: Contracting, screening, and monitoring in Australia,", IBSA Papers and Proceedings.
Klein, B , Leffler, K B , (1981), The role of market forces in assuring contractual performance, Journal of Political Economy ,Vol.89, pp. 615-641
Kochan, N. (1991), "Privatization is the new wave in (public sector-style) M&A", International Investment and Banking Report, August, pp.9-10
Kroszner, R , and P Strahan, (2001), "Bankers on boards: Monitoring, conflicts of interest, and lender liability," Journal of Financial Economics, Vol. 62, pp. 415-452
Lerner, J., (1995), "Venture capitalists and the oversight of private firms," Journal of Finance, Vol. 50, pp. 301-318
Lindsey, L., (2004), "The venture capital keiretsu effect: An Empirical analysis of strategic alliances among portfolio firms," Working paper, Arizona State University Marc Steinberg, pp. 355-359.
Maskara, P K (2005) Do Trade and Capital Flows complement each other? Evidence from the US Syndicated Loan Market, American Economic Review, Vol 19, pp.246-251..
Obwona, M. and Egesa, K. (2019). Foreign Direct Investment Flows in Sub-Saharan Africa Country : A Case Study, Working paper, University of Arizona.
Subramanian, A., A. Mattoo, and D. Roy (2019), "The Africa Growth and Opportunity Actions and Its Rules of Origin: Generosity Undermined '. Working Paper No. 2908, World Bank, Washington, D.C.
Copyright (c) 2019 IJRDO JOURNAL
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Author(s) and co-author(s) jointly and severally represent and warrant that the Article is original with the author(s) and does not infringe any copyright or violate any other right of any third parties, and that the Article has not been published elsewhere. Author(s) agree to the terms that the IJRDO Journal will have the full right to remove the published article on any misconduct found in the published article.