Summer Intern at Haitong Securities Company Limited - Term Paper Example

?INTERNSHIP REPORT ON HAITONG INTERNATIONAL HOLDINGS LIMITED EXECUTIVE SUMMARY Haitong International Holdings Limited is one of the major securities firm in China (Haitong, 2010g). It provides quality financial and investment services to broad client base in China and Hong Kong. Haitong securities deal in stocks and futures brokerage, investment banking, corporate finance, M&A, asset management, mutual fund, and private equity etc (Bloomberg Businessweek, 2012). During this summer, I was given an opportunity to join International Holdings Limited as internee. Opportunity was awarded in the marketing department as to assistant marketing manager. During internship, it provided an extensive practical learning exposure to the investment arena. It was also very beneficial from point of view of applying theoretical concepts studied mainly in course UD. This report is aimed at providing detailed review of learning experience as internee at Haitong International Holdings Limited. It will provide overview of firm, its products, portfolios and its analysis, practices to entertain customer in satisfying manner, individual projects assigned and overall evaluation of learning experience. In the end it will also provide concluding note regarding suggestions to firm for improvements. INTRODUCTION INTERNATIONAL HOLDINGS LIMITED 1- ESTABLISHEMENT Haitong International Securities Group Limited (“Haitong International” or “the Group”; Stock Code: 665.HK) is a subsidiary of Haitong International Holdings Limited (“Haitong International Holdings”). It is incorporated in Hong Kong and wholly owned by Haitong Securities Company Limited (“Haitong Securities”). It was established in 1973 and enlisted on Hong Kong Stock Exchange since August 1996 (Haitong, 2010a). 2- SCOPE Haitong International Securities Group Limited is renowned group with standing as leader in the Greater China region. The group provides total quality services in the domain of corporate finance, asset management and brokerage services. It has broad clientele encompassing global and local institutional and corporate clients as well as individual investors (Haitong, 2012b). Its network has more than 210 sales offices spreading across over 120 cities with 13 branches in Hong Kong and Macau. Mainly in China the Group has 2 representative offices in Beijing and Shanghai and 5 investment consultancy centers in major cities including Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou. Its broad network is serving over 4 million retail clientele services with over 12,000 institutional and high net worth clients (Haitong, 2010b). 3- SERVICES Haitong International Securities Group Limited is striving to become a leading global player in the international financial services industry. Its goal also includes standing a leadership position in the Greater China region. It is dedicated to provide total quality corporate finance, asset management and brokerage services to its clients (Haitong, 2010f). The operations of Haitong Group can be broadly categorized in following three areas (Haitong, 2010e): A- Corporate finance: under this title Haitong Securities provide wide range of services including IPO sponsorship, underwriting and placements, financial advisory, compliance advisory, institutional clients’ services and research. B- Assets management Haitong Securities provide services with respect to public funds, mandatory provident fund, private funds, alternative investment funds, Capital Investment Entrant Scheme and discretionary accounts services. C- Brokerage services Under brokerage umbrella its serves client with securities and derivative products, futures and options, bullion and foreign exchange, IPO subscription and financing services, online trading, margin financing, wealth management, agency and trustee services, stock borrowing, equity-linked note, structured product investment, bond investment and research.  1- 2- 3- 4- CERTIFICATIONS AND REWARDS Being renowned and well known financial services centre, Haitong Securities is accredited with pioneering position in many certifications and has been rewarded with respective titles (Haitong, 2012a). A- In 1999, attain ISO 9002 Quality Management System Certification, being first financial institution in Hong Kong and China to attain this certificate (Haitong, 2010d). B- In 2004, it obtained BS 7799 Information Security Management System Certification for its outstanding information security management system, becoming the first financial institution in Hong Kong and China to obtain this certification (Haitong, 2010d). C- These accreditations were later upgraded to ISO 9001:2008 Certification in 2009 and ISO 27001:2005 Certification in mid-2006, respectively (Haitong, 2010d). D- Haitong International Securities has been named the “Best Equity House in Hong Kong” by numerous international, Mainland China and Hong Kong institutions for 11 consecutive years since 2000, including FinanceAsia, Asiamoney, Euromoney, Capital Magazine, Sing Tao Daily and QQ.COM (Haitong, 2010d). 5- CONTACT The firm for incredible, expert and trusted financial services can any time be contacted on the given below contacts: (Haitong, 2010c) For international branches on the given link below, details of service centers worldwide can be attained: http://www.htisec.com/en/cs/branch.jsp (Haitong, 2010c) DISCRIPTION OF WORK ASSIGNED On the first day, welcome note from the entire staff was very warm and accommodating that entailed all support required to feel comfortable in the new environment. It was later informed to be very typical style from every person in the department to integrate the culture where customers are given ease to share all his/ her concerns and question regarding investment. On the initial day, I was suggested to review some literature about the company products. I was also given brief introduction and informed regarding details of training work assigned as an assistant to manager marketing. Given below is the brief review of the duration: A- ROUTINE JOBS Typical day at the marketing department of Haitong Securities begins reviewing newspapers and discussion regarding the implication of worldwide changes on financial market. As an intern I was also appreciated to share my reviews. Routine jobs assigned for day included tracing potential customers; conducting support activities to entertain and engage customers when the manager was busy; providing basic information about the rates for particular product etc. All these were, however, done under the supervision of other staff as it required understanding from about the software trading screen. Also some training regarding entering data in software used Haitong Securities and tracing entry errors etc. B- ASSIGNED TASKS Together with the typical routine activities, I was assigned to conduct financial statement analysis of certain companies. These companies included two of each type; one, companies those are highly traded and investors are more attracted towards it. And second, two companies those characterize less trading activity. To analyze companies, I used ratio such as liquidity, profitability, return and leverage ratios etc. Since ratios are relative measures, therefore, vertical analysis (analysis of performance within same financial year) as well horizontal analysis (analysis across years) was performed. The results were then compared with industry benchmarks. While, conducting analysis, I countered challenges such difference in the information presentation in different companies’ financial statements; lack of understanding of accounting techniques that are used to present positive results, indentifying factors not visible in financial statements and actually driving companies in particular direction etc. All these required broader understanding and team at Haitong Securities provided vision to look out of box. This assignment was also followed by simulation exercise of presentation to investor and addressing tough questions from investors’ perspectives. DISCRIPTION OF PORTFOFLIO Haitong Securities operate in four major areas of personal investment, corporate finance, asset management and wealth management. Given below is the review of all these four sections and how they enrich course learning: 1- PERSONAL INVESTMENT: This section deals with investment of individuals in various sectors such as security trading, future trading, forex trading and bullion trading. Security trading involved trading in money and capital markets. Forex entails investment in foreign currencies worldwide mainly in US dollars, Euro, Pound Sterling etc. Future trading involves trading of assets on future date wile bullion trading refers to investment in metals such as gold, silver, copper etc. All these are broad categories and investment within each category involves broad trade off spectrum across countries, sectors, industries and companies etc. Though marketing department does not take investment decision but they are required to be well informed of all factors on the basis of which trade-off among and between various options has undertaken. The challenging part of this section remains in addressing large clientele base satisfactorily and individually. It also requires explaining the scenario that is compatible to individual’s understanding and his/ her perspective. Extensive application of variation in risk appetite of individuals observed. 2- CORPORATE FINANCE: Corporate finance section conducts financial decision making services assistance to corporate clients. Haitong Securities provides tailored financial solution to the unique needs of corporate clients in attempts such as IPO (Initial Public Offering), Mergers and Acquisitions, spin-offs, re-organizations, pre-IPO private placements and other strategic initiatives to listed or private clients. It is carried by top professionals at Haitong Securities. To date firm has following achievements: a. 48 companies of which 34 are listed on the Main Board and 14 on GEM b. Underwritten or placed securities for over 500 cases for listed companies in Hong Kong for IPOs and secondary placements. c. Advised more than 400 mergers and acquisitions, assets exchange and debt restructuring transactions, with deal size up to HK$4.5 billion. 3- ASSET MANAGEMENT Asset management is also vast domain of services of Haitong Securities. Under this head it has Hai Tong Asset Management (HK) Limited, Haitong International Asset Management Limited and Haitong International Investment Managers Limited. Each of these is wide category and has varied investment options under their umbrella. All designed to meet the needs of varied prospects of investors and return. Alike all, this segment also has comprehensive investment management, risk management and performance evaluation systems.  4- WEALTH MANAGEMENT Wealth management accounts for providing services to client related to their wealth. It provides Personal Financial Planning Services, Priority Service, Retirement Planning, Education Planning, Immigration Consultation Service and Employee Benefit Schemes and MPF Advisory Services. Selection of the product for customer is based on analysis of the products from worldwide and suggestion the most suiting to customer. Moreover, to ensure transparency, account of customer is maintained directly with the institution where the investment is made and also investment amount is transferred directly without Haitong Securities being an intermediary which is very appreciable practice. INTERNSIP EVALUATION 1. PRATICAL VALUE Internship at Haitong Securities provided extensive learning opportunity. From the perspective of learning the practical working environment, I gained an opportunity to be aware of challenges in explaining the customer the features of financial product as it involved investment of considerable value. It provided to be informed of kind of queries posed to marketing personnel and the way they shall be explained to client that must satisfy them and convince them to invest through Haitong Securities. Current world scenario especially hit to financial institutions has shaken trust of client on financial service providers. Moreover, due to crises, investors are looking to investment avenues with least risk and sizeable return. This goes against the main investment principle of risk return trade-off. To me convincing investor for this obligatory rule of risk return trade-off and to undertake amount of risk that can be borne in case of any negative implications, provides evidence of the true test of marketing intelligence and quality of service. With no confusion, marketing manager of Haitong Securities has been well equipped with traits to provide quality service to investors. 2. ACADEMIC VALUE Academically this opportunity also remained very beneficial. Broadly it provided learning prospects in following areas: A- CONCEPT APPLICATION As discussed earlier, tasks assigned was related to financial report analysis. Financial report analysis was conducted specific to industry needs. Moreover, individual ratios are of little value and give more valuable insight in comparison with competitors as well as industry benchmarks. Specific to financial service industry, rate of returns on investments are important measure. Moreover, financial statement analysis of portfolio components was also worth learning. Daily report prepared at Haitong Securities reflecting daily investments and their respective returns allowed gathering information how theories are applied in practice. Variations that result in sector specific investment decision from professionals and also from investors were of immense interest. It also highlighted how psychological factors play dominant role in investor making investment related choice. It explained ways to design the balanced portfolio and factors that measure the cyclical and non-cyclical impact of industries and hence, are combined in basket that ensure secure returns. B- AREAS OF CONFLICT IN THEORY AND PRACTICAL Learning during internship also referred to some of the deviations that exist in theory and practice. These deviations exist for the reason that theory is experimented principal generalized and there always remain margin of error. This margin of error was quite evident in variation in responses of client on same investment options / products. For instance, on evaluation if any company shows sound financial status, it is then recommended for investment. Alongside if another company on evaluation provides more attractive results but still not accept as in investment option mainly due to impact of other factors having negative implications on the overall performance of company. This concept remains aligned with top down approach for investment; but contrast with company specific suitability for investment based on evaluation from various techniques application such as ratios. Manager at Haitong Securities explained how such instances are informed to investors, hence, saving their investments in apparently attractive options. This benefits Haitong Securities with profound trust from customer. 3. AREAS OF IMPOVEMENT Overall setup at Haitong Securities has been very impressive that ensure day to day growth for its professionals’ knowledge and investors’ money. However, there always remains room for improvement such as: due to economic slowdown investors are less prone to investment in financial products hence; introducing products with more variations will gear the momentum. Haitong Securities being sound in the business can leverage this benefit to itself, investor as well as overall industry. Furthermore, clients are more considerate about the fees charged and many do not turn up with positive notion once service fees are declared. Here again Haitong Securities can play key role. On the basis of its sound standing it can also offer economic product in order the increase sales. Once the economy rebounds with higher positive growth then it will be more feasible to charge more. As an intern, I also found many areas where improvements could have provided me more extensive learning. Due to very academic knowledge, I could not get any opportunity to deal with customer and even at initial level of explaining products to customer. Therefore, I realized being importance of shoulder to shoulder details of what is going on in economy inland and abroad is very important. Hence, further, if I get an opportunity to be part of Haitong Securities I shall prepare myself with more knowledge. I shall also be able to develop some test portfolios and gain insight from professional there. CONCLUSION Summer internship at Haitong Securities proved to be great learning experience. It provided an opening to learn about the level and the qualities of services financial organizations provide to their clients. Since these services, does not provide anything tangible in return immediately, however, on return given; trust and value an institution is accredited is of great value. The internship session endowed learning opportunity to understand with better clarity the practical application of theoretical models and perspectives studied in course. Meeting challenges coming in way while performing assigned tasks with support of staff highlighted areas where I need to enhance more my learning and capability. Most interesting learning experience remained explaining or marketing the financial product. It alongside highlighted the importance of internship as well which allows one to stay abreast of professional markets before finally landing on the competitive domains. Bibliography Bloomberg Businessweek. (2012). Company overview of Haitong International Holdings Limited. Retrieved October 26, 2012, from http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=81594138 Haitong. (2010a). Corporate Profile. Retrieved October 26, 2012, from http://www.htisec.com/en/aboutus/group_info.jsp Haitong. (2010b). Company Profile. Retrieved October 25, 2012, from http://www.htsec.com.hk/english/aboutHT/about.aspx?sysClassId=b5d070ae-3365-45da-a54f-e44bd2ac81d6 Haitong. (2010c). Haitong International Branches. Retrieved October 25, 2012, from http://www.htisec.com/en/cs/branch.jsp Haitong. (2010d). Milestones. Retrieved October 26, 2012, from http://www.htisec.com/en/aboutus/milestones.jsp Haitong. (2010e). Corporate Structure. Retrieved October 26, 2012, from http://www.htisec.com/en/aboutus/structure.jsp Haitong. (2010f). Management Team. Retrieved October 26, 2012, from http://www.htisec.com/en/aboutus/management_team.jsp Haitong. (2010g). Vision and Mission. Retrieved October 26, 2012, from www.htisec.com/en/aboutus/vision.jsp Haitong. (2012a). Awards and Achievements. Retrieved October 26, 2012, from http://www.htisec.com/en/aboutus/awards.jsp Haitong. (2012b). Shareholders’ Rights. Retrieved October 26, 2012, from http://www.htisec.com/en/aboutus/shareholders_right.jsp Read More