The fundamentals for Asia’s banking sector improved for one more year of the credit cycle during 2006, with the region’s bumper economic growth driving earnings and asset accumulation. The grab for assets could harbour future problems, however, as relaxed lending practices could haunt banks in a downturn.
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ICICI has established itself as the most high-profile of India’s offshore borrowers, thanks to its frequent taps of the international loan and bond markets. This has prompted some bankers and analysts to warn that ICICI’s borrowings have been too frequent and that it risks lender fatigue.
Malaysia’s national mortgage corporation and prolific user of securitisation – Cagamas – completed several path-setting MBS this year despite nervousness over the US sub-prime crisis. It is expected to notch more milestones in coming years and could achieve its target of being the leading securitisation issuer in Asean.
PetroChina has long been a trailblazer for the Chinese oil majors in the global capital markets, ever since its April 2000 IPO raised US$2.86bn in London and New York when it beat CNOOC and Sinopec to a listing. Now it plans to bring its clout to the domestic markets.
Reliance Communications’ breathtaking growth over past years has seen it emerge from the ranks of mid-tier telecom to become India’s number two telecom player. The company, forged on the back of the now famous split of the Reliance empire after the death of the Reliance patriarch Dhirubhai Ambani, is the flagship of the Anil Ambani-controlled conglomerate. The firm’s inexorable rise has as much to do with shrewd banking and the Reliance name as it does with old-fashioned business building.
HDFC Bank, India’s third-largest bank and a repeat issuer, has displayed a keen appetite to raise funds this year, with a couple of ambitious transactions getting good responses from the market.
Over the past year or so, top Taiwanese conglomerate Formosa Group and its affiliates have successfully raised US$3.17bn-equivalent from the loan and bond markets, including Formosa Plastics Corp USA's latest US$200m five-year term loan, which was a blowout in Europe, US and Asia despite market volatility. The success of these deals demonstrates the group's strong credit profile and stable performance.
If there is any company that is the epitome of India Inc’s global ambitions then it has to be the Tata Group. So vigorous has been the group’s overseas M&A push that it has become a regular provider of opportunities for financiers in offshore capital markets.
A year has now passed since last September’s military coup transformed the Thai political landscape. One clear economic casualty of the political instability has been Thai Military Bank. It has been a horrible year for Thailand’s fifth-largest bank by assets, which has suffered massive losses over the past 12 months.
Fortescue Metals Group has survived the sceptics and the brickbats to build a business feeding China's seemingly insatiable demand for iron ore. Successful bond and equity issues will fund operations until production starts next year. Investors will now see whether their faith will be rewarded.