Marchent Bank A merchant bank is a financial institution which is primarily engaged in offering financial services and provides advice

to corporations and to wealthy individuals. The term can also be used to describe the private equity activities of banking. Merchant Banking Operations in Bangladesh: Although in the .!." merchant banks offer a wide range of activities" including portfolio management" credit syndication" acceptance credit" counsel on mergers and acquisitions" insurance" etc" in case of our country" these services may differ. #n Bangladesh" a merchant bank can perform multiple operations including underwriting" issue management" portfolio management" merger $ acquisition etc. The merchant banking activities were largely fostered by two distinct developments: Merger $ acquisition activities and increased demand for venture capital. %. nderwriting: nderwriting operation is one of the important functions of a merchant banker by which it can increases the supply of stock&shares and debentures in the market. #t is an arrangement whereby the underwriter undertakes to subscribe the unsubscribed portion of shares&debentures offered by any public limited company. This encourages the prospective issuers to offer shares&debentures to the public for subscription and they can raise funds from the public. One or more investment banking firms may underwrite public offerings. The underwriters have the responsibility of pricing new shares and selling them to investors. The company pays the underwriters a fee. nderwriter also provides advice to a company issuing securities or to an issue manager. 'Before granting authority to %( non)bank financial institutions in %**( to conduct merchant banking business in Bangladesh under the !ecurities and +,change -Merchant Bankers and .ortfolio Manager/ 0egulations %**1" speciali2ed financial institutions" and the nationali2ed commercial banks and insurance companies were the key underwriters in the country3s securities market.45

6. #ssue Management: Issue Management function of merchant Banking helps capital market to increase the supply of securities. Being a #ssue Manager these 7#s provide assistance to the .rivate 8imited 9ompanies intended to be converted into .ublic 8imited 9ompanies by way of obtaining necessary permission from the relevant authorities" preparing prospectus for public issue of shares and debentures" involving itself in the collection of application money" scrutiny of applications" arranging for lottery relating to allotment" if required" allotment of shares and debentures" refund of application money etc. :. .ortfolio #nvestment Management !ervices: '.ortfolio means a collection of investments owned by an investor" an institution or a mutual fund and portfolio manager means the entity responsible for investing a mutual fund3s assets" mapping out its investment strategy and managing day)to)day securities trading4.1 ' .ortfolio management is the process of building" managing and assessing an inventory of company products and pro;ects. 4< One of the most important functions of merchant banking is to provide .ortfolio Management service to the customer. Basically" .ortfolio Management !ervices program has four different wings to provide portfolio investment management services. The !+9 allowed banks to launch merchant banking operation through opening of separate wing mainly to deal in portfolio investment o n behalf of clients3 account in order to channel pool of investors3 fund into the stock market in an organi2ed manner. 5.Merger and Acquisitions:

'The phrase mergers and acquisitions -abbreviated M$A/ refers to the aspect of corporate strategy" corporate finance and management dealing with the buying" selling and combining of different companies that can aid" finance" or help a growing company in a given industry grow rapidly without having to create another business entity.4( Merchant banking helps to negotiate companies in this case. The 0ole of Merchant Banking in Bangladesh: #f 7 #s get the licence" apart from merchant banking" these will be able to ensure a huge liquidity supply to the stock market. The capital market has been in a liquidity crisis since the introduction of direct listing rules in 6==<" as five state)owned enterprises and two privately)run companies raised thousands of crores of taka from the market" according to e,perts. 'To face such a crisis" more merchant bankers should be allowed to operate in the market"4 said an e,pert. The necessity of issuing merchant banking licence by the !ecurities and +,change 9ommission -!+9/ is also seen by some e,perts as an option to lessen the alleged dominance of the e,isting merchant banks in the stock market. This will also be very helpful for the investors and firms. 9onclusion: 9apital market differs from other markets in many aspects and" hence" the investment process in capital market is also unique and comple,. Therefore" professional portfolio management services as well as other merchant banking services are required for ensuring optimum performance of an investor>s investment portfolio.