Well, first and foremost, merchant banks Singapore are specialized banks. When it comes to traditional banking facilities, you have loan and deposit facilities. Whereas in the case of merchant banks, they offer lots of services focusing mainly on capital markets like IPOs, shares and underwriting bonds. Merchant banks also deal with trading and brokerage. It is designed to assist institutional investors. They will assist in managing the risk coverage for their firm’s portfolio. Also, they offer assistance in governing clients’ assets and financial instruments.
How merchant banks in Singapore function?
- The very first activity is investment banking services (strictest sense). Traditionally, merchant banks take care of such matters. Merchant banks offer support to business customers. They advise on managing and deciding their financial activities. It is managed by issuing debt securities and shares. And there are 3 phases to this process.
- Now let’s learn more about their second activity – corporate finance. They help the client firms in optimizing their financial choices. And there are various phases attached to it.
- Services in structured finance are another important service offered by them. There are different phases to this. Project financing, securitization, leveraged finance operations are important phases.
- Merchant banking services are the 4th most important area. It simply means acquiring holdings in the equity of companies that are non-financial in nature. It is a comprehensive service offered to the clients.
- Risk management is another important area they focus on. And there are two main subdivisions of it. In the first division, they refer services and products for risk management. Well, credit, foreign exchange, interest rate are few examples we can think of. In the second division, it is about research on models for managing and measuring market risk. They also deal with credit risk.
Choose the right one
We have seen what merchant banks in Singapore are capable of. Since you have plenty of options in Singapore, you have to be really careful with your choice.