(JOB) Thomson Investment Banking Solutions Group Partners with Clients on Proprietary Development, Integration Initiatives

Ø Thomson Financial → Thomson Corporation and leading provider of information and technology solutions → to the worldwide financial community
Ø Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results
Ø Leader provider of value-added information, software applications and tools to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate training and assessment, scientific research and healthcare
Ø Launched formal organization of the → Thomson Investment Banking Solutions (TIBS) group → partners with Thomson's investment banking clients → build and customize content-rich, scalable applications for accessing financial and business information
Ø Using a consultative approach, TIBS product and technology teams operate with a deep understanding of how content is managed and used in clients' businesses.
Ø TIBS group benefits from Thomson's historical experience managing the complexities of integrating disparate data sets into proprietary applications
Ø outsourcing of data management provides a significant operational cost savings, and speed to market for integrated applications
Ø TIBS, backed up by Thomson's content and data-integration tools
Ø suite includes components such as TKO
o TKO →
§ a universal searching system across all Thomson Financial content, the Press
§ a high speed caching architecture
§ vast library of pre-built but customizable investment banking-specific content components → that easily blend with third party or proprietary information
Ø The resulting application for enterprise-wide data distribution and integration is delivered via an internal enterprise network or intranet /extranet
Ø Thomson is the logical choice for any global investment bank seeking to derive efficiencies from partnering or outsourcing → TIBS already has been successful in implementing solutions for several top clients → Help streamline workflow, create competitive advantages around workflow and the use of information, and reduce costs associated with multiple system maintenance
Ø Technology had not evolved to the point where open, distributed systems were stable, scalable and secure enough
Ø Small players could not deliver integrated solutions on the scale required
Ø TIBS objectives → Given the consolidation in the information industry and improvement in technology, investment banks now have the opportunity to look to gain efficiencies through partnering with Thomson

Thomson Investment Banking Solutions Group Partners with Clients on Proprietary Development, Integration Initiatives (ARTICLES)

Abstract (Summary)
NEW YORK, Sept. 26 /PRNewswire-FirstCall/ -- Thomson Financial, an operating unit of The Thomson Corporation (NYSE: TOC; TSX: TOC), and leading provider of information and technology solutions to the worldwide financial community, today announced the formal organization of the Thomson Investment Banking Solutions (TIBS) group. Leveraging Thomson's 30 years of content management experience and established technology infrastructure, the TIBS group partners with Thomson's investment banking clients to build and customize content-rich, scalable applications for accessing financial and business information.
Using a consultative approach, TIBS product and technology teams operate with a deep understanding of how content is managed and used in clients' businesses. The TIBS group benefits from Thomson's historical experience managing the complexities of integrating disparate data sets into proprietary applications. Thomson offers a range of development levels -- from simply providing raw data through open system access to designing and building complete customized solutions that directly reflect the client's workflow and integrate into their existing technology environment. For many clients, the outsourcing of data management provides a significant operational cost savings, and speed to market for integrated applications.
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Copyright PR Newswire - NY Sep 26, 2002
Experienced Thomson Team Building and Deploying Technology and Information Solutions at Investment Banks; Using Consultative Approach in Developing
Content-rich Scalable Applications
NEW YORK, Sept. 26 /PRNewswire-FirstCall/ -- Thomson Financial, an operating unit of The Thomson Corporation (NYSE: TOC; TSX: TOC), and leading provider of information and technology solutions to the worldwide financial community, today announced the formal organization of the Thomson Investment Banking Solutions (TIBS) group. Leveraging Thomson's 30 years of content management experience and established technology infrastructure, the TIBS group partners with Thomson's investment banking clients to build and customize content-rich, scalable applications for accessing financial and business information.
Using a consultative approach, TIBS product and technology teams operate with a deep understanding of how content is managed and used in clients' businesses. The TIBS group benefits from Thomson's historical experience managing the complexities of integrating disparate data sets into proprietary applications. Thomson offers a range of development levels -- from simply providing raw data through open system access to designing and building complete customized solutions that directly reflect the client's workflow and integrate into their existing technology environment. For many clients, the outsourcing of data management provides a significant operational cost savings, and speed to market for integrated applications.
The team's investment banking domain expertise forms the core of TIBS, backed up by Thomson's content and data-integration tools. This technology suite includes components such as TKO, a universal searching system across all Thomson Financial content, the Press, a high speed caching architecture, and a vast library of pre-built but customizable investment banking-specific content components that easily blend with third party or proprietary information. Typically, the resulting application for enterprise-wide data distribution and integration is delivered via an internal enterprise network or intranet/extranet.
Authoritative content drawn from across Thomson Financial includes company filings, fundamentals and ratios, brokerage and market research reports, delayed and real-time security prices, corporate transaction data and ownership information, company earnings data and news. The ability to create new or customized applications allows bankers and information professionals to retrieve "current-awareness" information on companies as well as to perform in-depth research.
"Thomson is the logical choice for any global investment bank seeking to derive efficiencies from partnering or outsourcing, since we are already a leading provider of content and analysis used by banks in their advisory process," said Mark Lerch, president of the Thomson Financial Investment Banking Group. "TIBS already has been successful in implementing solutions for several top clients," he added. "Our banking clients want to create scalable applications that better fit their workflow, rather than adapt their workflow to vendor software. We help streamline workflow, create competitive advantages around workflow and the use of information, and reduce costs associated with multiple system maintenance," said Lerch.
"In the past, investment banks have had little choice other than to build integrated knowledge systems largely from scratch," said Kenneth Read, executive vice president, Thomson Financial Investment Banking Group and head of the TIBS group which includes top talent drawn from the investment banking arena. "Technology had not evolved to the point where open, distributed systems were stable, scalable and secure enough. Also, small players could not deliver integrated solutions on the scale required," said Read. "Given the consolidation in the information industry and improvement in technology, investment banks now have the opportunity to look to gain efficiencies through partnering with Thomson," he added.
About Thomson Financial
Thomson Financial is a US$1.6 billion provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a leading provider of value-added information, software applications and tools to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate training and assessment, scientific research and healthcare. The Corporation reported 2001 revenues of US$7.2 billion and its common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).

How CORRUPT is WALL STREET?

Ø Scandals in wall street → Junk-bond schemes in 1980s, the prudential Securities limited-partnership debacle in early 90s, and price fixing by Nasdaq
Ø Wall Street operates → Shady IPO allocation practices → Enron Corp’s Collapse
Ø The damage goes way beyond the tattered reputation of the firms and their beleaguered analysis
Ø The entire economy depends on the financial system → to raise and allocate capital
Ø If investors lose confidence in information → investors hesitate to put money into stocks → could deepen and prolong the bear market
Ø This condition can put a damper of economy → if company less willing or less able → to raise capital on Wall Street
Ø Wall Street → struggled with conflicts of interest
Ø Companies want high price for their stocks at IPO and low interest rates on bond → investors want Low prices and high rates
Ø Between last quarter of 1998 and first quarter of 2000 → Wall Street flooded of money during the Tech Bubble → Wall Street earned $10 Billion in fees → by raising nearly $245 Billion for 1,300 companies → many of them profitless company that later blew up
Ø Both Spitzer and SEC are seeking information → analysts’ recommendation → that can make the conflict of interest
Ø Zamansky → seen the contract → investment banks promising 3-7% of all investment banking revenues → that they help to generate → clear proof that analyst were being paid to help the firms’ banking clients, often at the expense of investors who expected objective advice
Ø Merrill Lynch facing potential fraud claims by every retail investors who purchased any stock that Blodget & Co. may have insincerely recommended
Ø Over long run → risk bigger than legal penalties → could be new restrictions that Spitzer or other place on the way investment banks do business
Ø On May the SEC → scheduled to approve a new rules forcing analysts to limit and disclose contact with investment banker collegues
Ø It was never a secret → Analysts who work at invesatment banks often work against investors
Ø Analyst spend too much time lobbying the investors → rather than crunching number → analyst get focused on saying on what they think the client want to hear to win the vote
Ø The biggest factors now contaminating the system is compensation
Ø Small Rewards → “IT WAS THE FROSTING ON THE CAKE , NOW IT IS THE CAKE!” → for fatten their wallets
Ø Behind the Scandal → These days bankers are far more focused on short-term profits than on their long-term reputation
Ø But no matter how Wall Street Shrinks → its credibility must grow again
Ø Firms have already taken some steps → such as eliminating direct reporting by analyst to investment bankers → but Wall Street and SEC still have to make enforceable code of conduct

Foreign Ownership and Investment: Evidence from Korea

I. Introduction
Ø Korean equity market was opened to foreign investors ion January 1992 → allow foreigner to invest up to 10% of a firm stock
Ø End 1992 → reach 7% → end 2002 → reach 36% of the total market capitalization
Ø Firm’s investment depends on → the availability of internal funds
Ø The importance of financial factors in investment → higher cost of external finance → arising from → information asymmetry and agency cost → in an imperfect capital market.
Ø If financial intermediaries consider that → foreigners favor firms with → low information asymmetry → then → firms with high foreign ownership are able to raise external funds at low costs
Ø If foreign investors have better skills than domestics’, → foreign firms have less agency problems.
Ø →The cash flow sensitivity of investment → is lower in firms with high foreign ownership → than in firms with low foreign ownership
Ø Main empirical findings:
§ First, Cash-flow sensitivity of investment → significantly decreases as foreign ownerships → increases
§ Second, the effect of foreign ownership on financial constrains became stronger after he complete opening of the Korean equity market to foreigners in 1998
Ø These findings imply → open financial markets help relax financial constrains faced by firms

II. Relevant Literature and Hypothesis Formulation
Ø Firm’s investments depend solely → on the profit opportunity
Ø Firm’s investment decisions are depend on financial factors → such as the availability of internal funds
Ø Why investment is sensitive to internal funds in imperfect financial market?
§ First → focused on a lemon premium that firms must pay on external finance → the cost of external funds are higher → than that of internal funds → due to the asymmetry of information → between borrowers and lenders
§ Second → studies attribute the importance of internal funds to managerial agency problems → managers tend to spend all available funds on investment projects at their own discretion.
Ø Imperfections in financial markets influence a firm’s investments
Ø The dividend-payout ratio → as a measure of the financial constrains → faced by firms that → investment of more financially constrained firms → respond more sensitively to changes in cash flow
Ø Ownership structure → affects investment → Canadian Firms → Concentrated ownership leads to less liquidity-constraint
Ø As managers’ ownership stakes in their firms increase → investment-cash flow sensitivities also rise → however → cash flow sensitivities decrease slowly after a certain level of insider holding
Ø As financial market begin to open → developing countries have recently experienced an increase in the equity share of foreigners
Ø FDI → increase the credit constrains by bringing in capital → also reduces firm-level financing constrains
Ø Foreign investors prefer → equity shares in firms with low information asymmetry → than those with higher information asymmetry
Ø Foreigners prefer large firms with good performance, low risk, low leverage, paying low dividends, and firms with large cash positions → it is expected → this kind of firms can raise funds at low cost → because high foreign ownership → is a sign that → these firms are in good financial condition → under imperfect information.
Ø Foreign investors have a tendency → demand better corporate governance → in order to protect their investment
Ø Foreign investors → seek safe and profitability firms → where they can exert influence on corporate governance
Ø We can say → cash-flow sensitivity of investment → lower in financial owned firms → than in domestically owned firms

III. Model and Method
Ø Method
Ø Ordinary Least Square (OLS) → likely to result in biased estimated because of endogeneity and heterogeneity problems
Ø Potential differences across firms in their investment behavior may also result in a heterogeneity problem
Ø Generalized methods of Moment (GMM) → estimation is widely used for dynamic panel models → the success of this model depends → mainly on the adoption of elimination of unobserved firm effect
Ø If there are NO strong unobserved individual effects → firm can apply the GMM technique to the investment equation in levels
Ø Data and Definition of Variables
Ø Firm-level panel data → constructed from Korea Investors Service-Financial Analysis System (KIS-FAS) database → consist of 5084 observation of the 371 firms
Ø High foreign ownership based on two criteria
§ First → more than 5.88% foreign ownership
§ Second → more than upper quartile foreign ownership

IV. Empirical Results
Ø Avalability of internal funds does affects investment levels
Ø Persistence also found in a firm’s investment → from significant estimates in the lagged investment-to-capital ratio
Ø Sales play role of increasing the investment-capital ratio
Ø Financial constrains faced by firms decrease → as foreign ownership increases
Ø Since foreigners’ shareholding plays a role in diminishing information asymmetry in financial markets → firms with high foreign ownership seem to → capable of raising external funds → at lower cost.
Ø Firms with high foreign ownership → les likely to use cash flow at their discretion due to improving corporate governance system
Ø Opening of the stock market → one of the factors in the mitigation of financial constrains
Ø Liquidity constrains are reduced → in firms with low foreign ownership

V. Concluding Remarks
Ø Foreigners tend to favor with firms with low information asymmetry → conclude → higher the foreign ownerships → lower the asymmetry information
Ø Cash flow sensitivity decreases as → foreign ownership increases
Ø Foreign ownership play role → reducing the financial constrains → and improves accessibility of external financing for investment