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The World Is Not Enough

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A progression is usually a move in a forward or upward direction. In most spheres of life, this connotes a regression. The development of an economy is not an exception to this reasoning. Economic development is not achievable without an improved rate of capital formation. One important way of capital formation for developing economies is through improving their investment banking industries.

Investment banking is the process of raising capital for businesses through public floatation and private placement of securities. Investment banks work with companies, governments, institutional investors and wealthy individuals to raise capital and provide investment advice. Originally, investment banking meant the underwriting and distribution of securities. Today investment bankers also invest a lot of effort into helping companies design deals and the securities to finance them, and then use their brokerage arms to sell the securities to the investing public, both retail and institutional.

The investment banking industry is central to the market-based economy. By bringing together entities in search of new capital and investors, usually institutional investors, the investment banking industry play an important intermediation function in all market economies. Just like most developing countries, investment banking in Ghana is a relatively new phenomenon. However, if the experience of other counties is indicative of what is likely to happen, then it is likely that in the future, companies will increasingly migrate from bank finance to capital market financing for their long term capital needs.

The Ghana Stock Exchange (GSE) for instance started with 3 Licensed Dealing Members (LDMs) in 1990. Currently, it has 14 LDMs. By any standard, this has been a growing industry. Unfortunately, the growth has been uneven. Only a handful of firms have had a significant impact on

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