Study On Investment Bank And Enterprise Financing

In recent years, the financing problems of enterprise are becoming more and more evident. The malpractice of the original financing system arise our attention. Under the new situation, the government changes its concept actively, and try its best to call for the enterprises to carry on the direct financing through the capital market, and this will provide the opportunity for Investment Banks that play an important role in the capital market. Therefore how to realize the relationship between Investment Bank and Enterprise Financing, and how to look on the important function that Investment Bank play in the enterprise financing process, will be of very important realistic meaning for solving the hard nut of our enterprise financing. A, The summary of Enterprise Financing Enterprise Financing, means a kind of economic activities that enterprise obtains the funds with certain approach and mode. It is the premise of the enterprise's production and operating, and it is also the assurance of the enterprise reproduction. Using different classification method, Enterprise Financing can be divided into internal financing and external financing, short-term financing and long-term financing, company financing and item financing etc.. Because the motive of the enterprise financing is not same, while given the investment opportunity, the enterprise needs to choose a suitable financing method according to their target function and the income cost, and to select a best financing structure. Through studying MM theory, Equilibrium theory, Pecking theory and Corporate strategic finance theory, we can have more deeply comprehension to enterprise financing. Enterprise financing actually is a process allocating enterprise, the channel, mode and scales of acquiring the funds actually reflect the efficiency of allocating social resource. Allocating limited resources to the enterprise or sections of high efficiency or help to develop the economy, not only can raise the efficiency of allocating social resource, but also will stimulate the section of low efficiency raising efficiency, otherwise they will disappear for no funds. Two, the objectivity and inevitability of Investment Bank participating in Enterprise Financing Investment Bank means a kind of financial institution that only deals in part or whole business of capital market. This is a best definition for Investment Bank according to the development and trends of Investment Bank by Robert Kuhn who is a famous American expert in finance and investment. Taking a comprehensive view of the development process of Investment Bank, we know the occurrence of Investment Bank is a very long history process, so we can say, it is the outcome of commercial economy's development, and it is also the symbol that the growth of financial market is gradually maturing. Along with the progress of science and technology and economy's specialization and socialization, by holding the dominance of huge funds channels, Investment Bank perform allocating resource function in capital market, and play a central role in operating long-term capital, and carry on a series of innovation of financial tool, that promote the development of securities business effectively, then Investment Bank have become the most active intermediary with a great influence. Therefore Investment Bank also is compare to "core", "soul"of the capital market. That promote Investment Bank participating in Enterprise Financing objectively. In addition, EnterpriseFinancing is a core business of Investment Bank, and it also indicates from a different side that Investment Bank will participate in Enterprise Financing by all means. Three, the status and function of Investment Bank in Enterprise Financing In the process of participating in enterprise financing, Investment Bank can't be substituted for its special status. Firstly, being medium of both sides of funds supply and demand, Investment Bank don't get involved in the rights and duties between the investor and the financing, and the investor and the one who raise funds get in touch each other, and they own the rights and undertake the relevant duties mutually. But the commercial bank who also play a role in relating the surplus and deficiency of funds is not like this. Secondly, the emphasis on the medium of the funds also is not the same. The commercial bank lay particular emphasis on short-term capital market, but the Investment Bank is the basic path of medium and long-term funds for enterprise financing. In recent years, although the one who raise funds and the investor can contact directly because of the extensive application of computer technology and the diversification of management way, but the function of Investment Bank participating in enterprise financing is still hard replaced. As a professional intermediary, Investment Bank can consult and discriminate the safety of investments for the investor, and it can also expand the path of financing for the one who raise funds, and its dominance lies in detached status, lofty reputation, timely information, abundant experience and bold innovative spirit. Therefore, for the market economy, as an important financial institution, Investment Bank holds the core function in participating in enterprise financing and its function still should not be neglected.Four, the status quo of investment banking's development in China Currently, the companies that are active in our country capital market like security firm, trust company, finance company...etc., don't yet become the genuine Investment Bank, so we can say that they are just dealing in the business of Investment Bank. And as regards the actual conditions of the domestic financial institution at present, only the comprehensive security firms with stronger strength have possessed of the foundation that our country fosters the modern Investment Bank. Firstly, their business mostly belongs to the origin business of Investment Bank in the primary market of the securities and secondary market, and they still manage the modern business of the Investment Bank at the same time. Secondly, they have the organization foundation of Investment Bank, in addition they have rich funds and extensive business sites, and their prestige and social influence power are relatively strong. Finally, they have already possessed certain ability in such aspects as talent, experience, research and development. But as a new and developing trade, there are still a lot of questions in the course of development in Investment Bank of China. Show: First, the kind of business is deficient, lacking the innovation. Second, the scale of assets is small, so its competitiveness and the expansion of business are limited. Third, the concept can not catch up with the development trend of modern Investment Bank, and the developing direction is single. Fourth, having not constructed and built up compounding and expert type talent's team of Investment Bank yet. The fifth, the trade reorganization waits for opportunity, and it needs state give clearly policies that the business is expanded and upgraded. Five, the realistic choice of Investment Bank of China launching the financing businessIn the process of China's economic system reform, the largest problem that enterprises face is shortage of the capital. This kind of state can be solved through enterprise financing. For a long time, the state-owned enterprise of our country developing by bank loan formed a bank-leading financing mechanism, and the dependence on bank is great. On the other hand, the volume of the whole external financing for small and medium-sized enterprises in our country is very small, not meeting the demands of their own development far, development relying on oneselves accumulation more. This kind of phenomenon is abnormal in a perfect capital market. With the transition of the economic system of our country, the reform of investment and financing system of our country is performed forward steadily, and the environment of enterprise financing gets high improvement. The channel and mode of financing are widened rapidly, and the direct financing has got development in certain degree. But for some problems in realization, there is greater gap with the developed country in the development of direct financing, and compared with one's own demand for economic development it lags behind apparently. As well as during the process of developing direct financing, because of holding one-sidedness that enterprises know stock financing, controlling corporate bond in administration, relatively low earning ratio, lacking authoritative agency in credit appraisal, lagging behind in building secondary market, etc., so enterprise have a partiality for stock financing but light corporate bond financing has been formed. The development degree of direct financing is one of the important mark of weighing the development level of the market economy. How to improve the current situation of enterprise financing in our country better, serving the enterprise financing, it requires the Investment Bank of our...