As a Specialist Assistant Intern, at first I was responsible of translating quarterly company reports, since the reports were first written in Turkish, but needed to be translated into English before being sent to the firm's subsidiaries in New York and Dubai. Translation work is a great way for an intern to learn about the unique jargon used at this line of work. There is an urban legend saying that people in finance talk in coded words or abbreviations to make it impossible for other people to understand what they are saying, and make what they are doing look like impossible. It is kind of true, there is a huge terminology pool with a lot of abbreviations in the quarterly reports, but I got used to it pretty quickly, and was able to come up with good translations. At some point, my peer reviewers would not even find any mistakes in my report translations.
After becoming more used to the companies' numbers at the market, I was given tasks, partially creating valuation models of some firms in the AtaInvest coverage universe, and in the end helped me to combine the different excel sheets to see the big picture and complete the company valuation. Now, I am fully capable of starting up a valuation model for any Turkish company, maybe international too, and write an accurate report.
Now, I want to talk about the structure of the firm that I worked at. First of all, it is a subsidiary of Ata Holding, the parent company of AtaInvest, which operates more than 25 medium to large scale firms both domestically and internationally, like TAB Gida which operates Burger King in more than seven countries including China. AtaInvest itself can be divided into four: 1) Equity Research 2) ICM 3) Portfolio Management 4) Brokerage & Traders. ER, where I worked, is basically where each company in the coverage universe of Ata is scrutinized and modeled financially, resulting in a quarterly report that has the Target Price that is reached by the valuation, and the reasoning of what lead to that number. The other three divisions could not do their jobs without my division's valuations and analysis of the market.
ICM's job is basically deal with international clients who invest higher amounts of money to the Turkish market. They in constant contact with clients and since they trade in huge volume, every little percentage increase at the stock price equates to a huge amount of profit. Portfolio Management takes care of managing portfolios, which people can invest in by buying shares from. Each portfolio is designed to carry a certain amount of risk, with diversified financial instruments like futures and options, stocks or foreign currencies. The stocks that are put in the portfolio must be in the coverage universe of AtaInvest.
I wanted to talk about the Brokerage division separately, because it is also related to the "transaction cost" topic. First, brokerage division is responsible from calling their clients individually and give updates about their current investment standing, new comments on stocks from ER department, and give them advices about how to invest further, and eventually enter the customers' trade into the system manually. In return, they are paid a "transaction cost" that is also called commission. The regular/average commission of a broker from each trade is 1/1000, or in other words 0.01%. Therefore, when investing, the customers also need to take that figure into consideration when buying and selling.
All in all, it was a very beneficial and interesting experience for me, and I received a job offer for when I graduate after I left AtaInvest.
I am glad you are trying to catch up. However, I am unclear as to which prompt you are writing to here and what your plans are for doing the rest of the posts that you missed. Please send me an email about the plans and in future posts have a sentence or two about the prompt you are writing about.
ReplyDeleteAbout this specific post - you mentioned running Burger King in other countries, for example China. That seemed like an entirely unrelated business to what you talked about. If you are going to mention something like that in your post, you need to say why. Ata Holding has diverse businesses, apparently. What does that accomplish?
The transaction cost you mention for completing trades is not the same concept as the transaction cost in our course. In brokerage houses the charge to customers per trade is a source of revenue for them. It is literally a service charge for making trades. Some brokerage houses and banks also charge maintenance fees, even when there is no trade. This is literally a way for the financial companies to get payment from their clients.
In our course transaction costs exist when one side of the transaction wouldn't faithfully complete their obligation or when there a multiple parties to the transaction and there has to be coordination between them.