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AIBC 2015 Newsletter Issue 1
AIBC 2015 Newsletter Issue 1
A conference organised "for students, by students", the AIBC seeks to provide a holistic platform for the
exchange of ideas among established professionals and student delegates from renowned universities
worldwide. The 7th edition of the conference will see 300 student delegates come together at the Hong
Kong Convention & Exhibition Centre (HKCEC) once again from the 3rd to 4th September 2015. This years
conference will cover four broad themes:
Participating firms this year will include traditional bulge bracket banks, boutique investment banks, and
firms providing financial support services. Do take a look at our Speakers page on our website for the list.
Besides the various Keynote Speeches and Panel Discussions by our distinguished speakers, this years con-
ference will feature Interactive Learning Sessions (ILS) spearheaded by professionals who are experts in
their respective fields. The ILS will allow greater interaction between professionals and our delegates, and
equip delegates with valuable career and technical skills. There will also be plenty of formal and informal
networking opportunities that delegates can look forward to.
In addition, we strongly encourage all delegates to participate in the M&A Case Study Competition and Eq-
uity Stock Pitch Competition, both of which simulate real-life scenarios in the investment banking industry.
Attractive prizes including a fast-track opportunity to a summer internship with the platinum sponsor or
AIBC 2015 - Credit Suisse, awaits the winners of the competitions.
Best regards,
The Asia Investment Banking Conference 2015 Executive Committee
Like us on Facebook: http://www.facebook.com/aibc2015
Issue 1 1
Mergers & Acquisitions
Mergers and Acquisitions (M&A) involve companies that aim to purchase another, normally smaller, com-
pany (Acquisition), or combine with another company to form a single larger entity (Mergers). This is a very
lucrative business for investment banks, accounting for 31% of the total fee pool in 2014.
Objectives of Buyers: There are two main par- Objectives of Sellers: The reasons for shareholders of
ties who may seek to engage in the acquisition businesses to sell out are fewer than those of acquirers.
of a firm. There are Financial Buyers, normally They could do so to achieve a Liquidity Event, selling
buy-side investment firms, who acquire com- their shares so as to monetise their value and cash out
panies to realise a return on their investment their investment. They could also wish to do so for per-
by selling it later, after improving the busi- sonal reasons, especially for businesses dominated by a
ness through various operational or strategic sole founder, the owner wishing to retire or lacking fu-
changes. This could be made more lucrative by ture successors. They may also have not solicited a sale,
the availability of cheap capital to finance a po- but rather accepted an extremely lucrative offer, or been
tential acquisition. forced to do so due to a poor future outlook for the busi-
ness.
There are also Strategic Buyers, which are
generally firms who seek to buy or merge with
another firm to integrate it as part of its own
operations. There are many benefits to doing
so, such as achieving cost savings from reaping
economies of scale and eliminating back office
redundancies (also called Cost Synergies), di-
versifying a firms sources of revenue, combin-
ing products to offer better value to customers,
expanding market share to increase market
power, or even taking out a potential compet-
itor.
Issue 1 2
Mergers & Acquisitions
Role of the Investment Bank Brief Glossary of M&A terms
Issue 1 3
Mergers & Acquisitions
Issue 1 4
Mergers & Acquisitions
companies to shift
their listings back to
the domestic market,
an influx of capital into
the technology sector,
many of whose mem-
bers had listed on the
US market to raise cap-
ital in the past, and the
greater availability of
domestic capital.
Issue 1 5
The AIIB
The Asian Infrastructure Investment Bank (AIIB) has and Italy. Of the numerous countries that applied to
been a recent hot topic, with many heralding it as a be founding members of the AIIB, only North Korea
marker of Chinas ascent as a dominant force in the and Taiwans applications have been denied.
global economy. But what exactly is the AIIB, and
what does it mean for Controversial-
financial markets in ly, the AIIB was
Asia going forward? created with the
knowledge that
Formulation a similar bank
The AIIB is a multilat- already exists:
eral development bank The Asian De-
(MDB) aimed at fi- velopment Bank
nancing infrastructure (ADB). The ADB
development in Asia. has been around
As compared to other since 1966 and
MDBs, AIIB promises serves a similar
to focus on a single as- objective - to pro-
pect of Asias develop- mote economic
ment: infrastructure. It development in
aims to provide the re- Asia. While exist-
quired funds for the development of railways, roads, ing banks such as the World Bank, ADB and Inter-
airports and other infrastructure projects in Asia. Ul- national Monetary Fund (IMF) have voiced concerns
timately, the Bank would promote interconnectivity over its creation, the AIIB has promised that it will
and economic integration in Asia. collaborate with and work alongside its counter-
parts. As a matter of fact, the World Bank has begun
History cooperation with AIIB in areas such as institutional
It was first proposed by China in 2013 in response to standards and framework formulation.
the slow pace of reforms in other MDBs, as well as
to create an additional financial institution to satis- Implementation
fy the demand for infrastructure loans in Asia. The The AIIB will begin with an initial capital base of
AIIB has since received widespread support from 57 US$50bn, eventually to be increased to US$100bn
nations as of 15 June including developed western (via a US$50 billion contribution from existing finan-
economies and staunch US allies such as the United cial institutions and private capital).
Kingdom, Germany, France, South Korea, Australia China will hold a 30% stake in AIIB, making it the
Issue 1 6
The AIIB
banks largest shareholder, followed by India with a gion lacking the necessary financial framework to
10-15% stake. The prominence of Asias fastest-ris- facilitate such investments (Such as ratings agen-
ing economies (i.e. China and India) at the helm of cies, financial regulatory laws, liquid bond markets).
AIIB leadership represents a potential consolidation Thus, there exists a major structural financing gulf
of soft economic influence in the region. However, for infrastructure in developing Asian countries,
notably, China does not hold any veto power, having and the persistence of the problems that impede
only 26.06% of the institutions voting rights, unlike the flow of funds to infrastructure projects will hin-
the IMF and World Bank which have the US holding der economic development. Hence, the role of AIIB
a limited veto over decisions. serves to bolster financial leverage in infrastructure
Essentially, AIIB plans to create a three-tier organ- projects across the region and improve interconnec-
izational structure, including a council, board of di- tivity among Asian countries, thus potentially mak-
rectors and management, alongside the introduc- ing significant achievements in satisfying infrastruc-
tion of a supervisory mechanism to ensure sufficient, ture investment needs.
transparent and open policy-making. The AIIB seeks
to build a reliable organization that has a small and Potential Impact on Finance in Asia
efficient management team, with zero tolerance for While it is premature to come to any decisive conclu-
corruption. Amongst many other benefits, the par- sion about the AIIBs influence on Asias future, it can
ticipation of advanced European countries would be safe to assume that its introduction would boost
bring good governance and a strong focus on devel- investment activity in the Asian financial industry.
oping high-quality projects, while adhering to strin- The introduction of AIIB would create an influx of ac-
gent environmental standards. tivity within the financial services industry in Asia. As
The combination of reliable bureaucracy, transpar- the number of infrastructure development projects
ent open policy-making and dynamic pluralism could in the region increases, the volume of fund-raising
potentially encourage the opening of profitable for- activities organized by the various member states
eign investment channels, essential to AIIBs core would similarly increase. Financial institutions in
objective of satisfying Asias growing infrastructure Asia, especially the ones from prominent hubs like
demand. Hong Kong and Singapore, can provide a full range
of financial services and expertise to the member
Potential Impact on Asian Economy states of AIIB. This could come in various forms,
The ADB estimates that the region requires US$8 such as issuing bonds and raising funds from inves-
trillion in financing by 2020 for infrastructure pro- tors and providing project evaluation services. In ad-
jects, particularly for energy and ports, in order to dition, AIIB will coordinate numerous private-public
build the infrastructure necessary to sustain the banking interactions that could facilitate the tech-
growth trajectories of the regions economies. How- nological catch-up required to bring about greater
ever, Asia lacks existing platforms that can channel efficiency and effectiveness.
capital to satisfy these financing needs, due to tra- With the AIIB, the RMB is likely to be further inter-
ditional commercial banks having less appetite for nationalized with an increase in RMB-denominated
such project finance, and many countries in the re- loans, increasing the use of the RMB as a medium in
Issue 1 7
The AIIB
international financial transactions. In conjunc-
tion with the creation of AIIB, there have been
an increasing number of countries including
China, India, Russia and Turkey that are avoid-
ing the use of the USD as a means of carrying
out transactions. This potentially bodes well for
Chinas attempts to achieve the internationali-
zation of the Chinese Yuan, to compete with the
USD as the worlds primary reserve currency and
medium of exchange, which would boost Chi-
nas economic power and prestige.
Issue 1 8
Competitions
Interested in joining investment banking and keen to understand this industry better? Heres your
chance to work on a real-life example by participating in the AIBC 2015 Investment Banking Case Study
Competition.
Simply form a team of 3-5 people and present a strategic review for a company in the form of a pitch-
book. The details of the company will be provided by the committee. The finalists will be shortlisted
and invited to present to a panel consisting of committee members.
Always had a passion for equities or interested in Sales and Trading? Take part in the Equity Stock Pitch
Video Competition to showcase your stock pitching skills and stand a chance to be fast tracked to
Credit Suisses 2016 Summer Internship!
Simply create a video to pitch a buy or sell call based on the scenario given. The video does not
have to be professionally filmed and you can use visual aids to supplement your presentation. The
winner will win a chance to be fast tracked for first round interviews for the 2016 Credit Suisse Equities
Sales and Trading Summer Internship.
The competition will be opened to delegates who have registered and paid for AIBC 2015 from 13th July
2015. For more information, please refer to http://lseaibc.com/index.php/competitions/equity-compe-
tition.
More details about the competitions will be released nearer to the date.
Do take note that only AIBC delegates are allowed to participate in the above competitions.
Issue 1 9
An Interview Feature
Describe, in your opinion, the type of person most suited for a role in IBD?
We look for candidates who have strong analytical ability and intellectual curiosity,
and display a strong willingness and ability to learn. They should be hardworking
and discipline, and be able to multi-task under pressure. Given how a bank is struc-
tured, it is important that they can work well in teams and get along with other
colleagues. Being passionate about what they do will help a long way in terms of
establishing a long term career in banking.
What do you think is the most important attribute that enabled you to arrive Zi-Kuan Lim
at where you are today? Investment Banking Department
I do not think it is easy to just pinpoint a single most important attribute. Similar Singapore, Credit Suisse
to what I have highlighted above, the key is to be passionate about what you do,
and to maintain a strong intellectual curiosity to keep challenging myself. Investment banking is a very dynamic profession, and
even after 12 years in banking, I came to realize that there is always something new that I can learn and that is the only way I keep
myself motivated in my career. It certainly helps that we have a great team at Credit Suisse which has reinforced the enjoyable
and enriching experience I have had in my career.
What advice would you give to someone who is interested in the investment banking industry?
The key is to get a strong understanding of what investment banking is really about, and this does not only mean reading up
transactions in the news but also finding out from your alumni or other network what an investment banking career really entails.
I usually advise students to apply for an investment banking internship as I strongly believe it is the best way for someone to truly
assess whether investment banking is something they want to pursue as a long term career.
What expectations do you have for your business field in the next couple of years?
M&A continues to remain very active in this region as we continue to see both inbound and outbound interest. With the strong
demographic and economic profile of Southeast Asia, there will be continued interest from corporates looking to expand and
improve their platforms and growth profiles.
Issue 1 10
Sponsors & Partners
Platinum Sponsor:
Gold Sponsor:
Strategic Partners:
Analytics Partner:
Education Partner:
Issue 1 11