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Introduction

An investment house, by definition, is an enterprise engaged in guaranteed underwriting of securities of another person or enterprise, including securities of government and its instrumentalities. Through the years, the Philippines has been witness to a vastly changing financial sector where which have demanded the services of investment houses. In particular, a trend of companies continually choosing to expand its operations is evident as the years have gone by and this expansion of companies brings with it an increasing need for corporations to avail of external financing be it from issuing new debt and/or equity.

AB Capital Securities, Inc., a subsidiary of AB Capital and Investment Corporation, is an example of an investment house which offers security underwriting services, online stock trading services and market research resources. Customers range from small and individual investors to large corporations. It differs from an investment corporation in that an investment company is considered an entity primarily engaged in investing, reinventing or trading in securities.

For the purposes of this paper, the content would focus mainly on the functions and operations of AB Capital Securities Inc. as the services it provides epitomize what an investment house should do for its clients.

Company History

AB Capital and Investment Corporation traces its roots back to the year 1980 with the establishment of Anscor Finance, Inc. by the A. Soriano Corporation. Anscor Finance, Inc. started first as a financing and leasing company but with the first quasi-banking authority given to a Philippine institution in years and with a newly granted investment house license in 1981, the company changed its name to AB Capital & Investment Corporation which now focuses on the capital markets. During the same year, the original financing and leasing operations of the company were transferred to a separate entity, namely Anscor Finance Corporation.

In its early beginnings, AB Capital wanted to become an institution which offers a variety of financial services focused on the capital markets. As an offshoot to this, AB Capital acquired 80% of one of Manila's leading stock brokerage firms and renamed it to Anscor Hagedorn Securities, Inc. In 1983, Anscor Capital acquired a stock transfer firm, Stock Transfer Services, Inc., which used to be a subsidiary of Anscor, the parent company. A year later, in 1984, the Group acquired majority interest in what was then Asian Savings Bank. Driven by the expertise and reputation of its key people and the solid backing of its stockholders, the Group readily established its leadership in the field of investment banking during the first decade of its operation. In 1990, the Group expanded its role in the financial sector by upgrading the savings bank license of Asian Savings Bank to a commercial banking license. The bank was then renamed AsianBank Corporation. AsianBank proceeded to become a universal bank in 1996 and emerged as one of the significant players in the Philippine banking industry, ranking 18th among 54 commercial banks in 1999. However, despite the Bank's noteworthy performance, during that year the Group divested its holdings in AsianBank as part of the ongoing consolidation in the banking industry.

AB Capital Securities Inc., previously Anscor Hagedorn Securities, Inc., has consistently grown since it was established in the 1980's and is now handling major underwriting activities in the Philippines. The largest of these underwriting activities to date is a 28.75 billion peso IPO for SM Investment Corporation. AB Capital has had dealings with both commercial and government institutions, making it one of the leading investment houses in the Philippines. Currently, it boasts that it leads the industry in terms of total equity and debt securities underwriting.

Currently, AB Capital is located at the 8th floor of Phinma Plaza, 39 Plaza Drive, Rockwell Center, Makati City. AB Capital and Investment Corporation also have 70 highly qualified employees in its payroll as of the end of 2007. Its strong performance in the market has earned the company multiply awards. In 1995, AB capital was recognized by Euromoney as the top local financial institution in the Philippines in terms of overall financial service. In 1997, the company was presented the Lead Underwriter Leadership Award by the Credit Information Bureau, Inc. (CIBI) in 1997 for being the lead underwriter for the most number of companies and for the highest amount of commercial paper issuances. Also in the same year, AB Capital was cited among the top five financial institutions in the Philippines preferred by corporate treasurers and corporate finance officials.

Vision and Mission Statement

Currently, AB Capital is lacking a concrete mission and vision statement and management has yet to take into serious consideration the need to make such statements. Taking into consideration the importance of having a common vision and goal for all the employees in the company, the group has formulated a vision and mission statement that AB capital can adapt to its operations. In placing these statements, the employees of the company can understand what exactly they are working for and the different positions AB Capital has in terms of employment practices and company principles.

Vision Statement

AB Capital and Securities Incorporated aims to be the best Philippine Investment House anchored on providing best value and unmatched quality of service to its clients.

Mission Statement

To contribute not only to the development of the financial sector but also to the social and economic sectors in the Philippines.

To be a well-led company, uplifting best corporate practices and high ethical standards.

To recruit and develop the best and most competitive finance managers, investment bankers and other finance specialists, providing them with proper training and opportunities for growth and self-development within the company.

To keep employees happy and satisfied by providing them with proper compensation and benefits, opportunities for promotion, and utmost safety and security.

To continue building strong and lasting relationships with its clients, particularly with the government and other highly influential companies in the business sector of the country.

To establish financial stability and potency through maintaining high efficiency in its operations.

Organizational Structure